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I will certainly make sure that the committee gets that documentation. It lays out a significant amount of detail. The backdrop of capital declining by 0.3 per cent over the spending review period is challenging. As I have said, with the infrastructure investment pipeline, we have tried to be clear about those projects that are moving forward. We are also trying to be innovative in other funding streams to grow that envelope because relying on the capital departmental expenditure limit alone is restrictive, given the fall-off of capital.

That is why we are looking at revenue finance—in the primary care space and the college estate, for example—to try to grow that pot, because of the very point that you are making about the importance of infrastructure. CDEL is going to decline over the course of the spending review and that is reflected in what can be done by when.

I have sympathy for you on that point. We know that construction inflation is running higher than GDP. In October 2025, annual construction inflation was at 4.4 per cent, and that builds on all the other increases over the years, especially the post-Covid years.

That impacts on bangs for bucks. Every £1 million that is invested in infrastructure buys significantly less now than it did 10 years ago. Every Government is facing that reality, which is why we are trying to grow the pot by looking at revenue finance.

08:45

I will come on to those points, because there was a lot of detail in there but, first, I point out that all commentators have acknowledged that there is a real-terms increase. There is a difference of opinion on what the real-terms increase is, and I am very happy to set out why we say that it is 2 per cent.

I draw your attention to what the Scottish Parliament information centre has said. As in the past, it has said that, if you compare budget to budget, as we should, because of the in-year transfers, you find a cash and real-terms increase to the overall revenue allocation to local government. All that is set out in table 4.15, which shows that the overall settlement increases by £650.9 million. That is a cash increase of 4.3 per cent, or 2 per cent in real terms.

The reason why it is difficult to compare to the ABR is because of in-year transfers. In 2025-26, we had in-year transfers of £144 million for employer national insurance contributions and £109 million for pay. If you compare the budget to the ABR, the ABR will of course be inflated because of those in-year transfers of resources.

There might well be in-year transfers of resources for 2026-27, but we do not know that yet. That is why we contend that, for local government, because of that flow of funding in-year, some of which can be predicted and some of which cannot—no one predicted the employer national insurance contribution issue—we should compare budget to budget, as SPICe has said should be done. It is important to recognise those two elements of in-year funding on ENICs and pay in 2025-26. SPICe has recognised that.

That is why my contention is that there is a 2 per cent increase in real terms, when we compare this budget to the 2025-26 draft budget.

The spending review is a separate issue from that of the budget-to-budget comparator. The spending review is flat cash, and the reason for that is to do with the constraints of the spending review itself. However, if, as a comparator, we look back to the previous spending review in 2022, when local government also had a flat cash outlook, we find that the actual funding that was delivered to local government bore no relation to that outlook.

The spending review is for planning purposes, but, in the course of history, the figures in a spending review have never remained at the same level. Given that the UK is heading towards an election in 2029, there is no way that the figures in the UK Government spending review will hold as they are at the moment. I think that local government received about £3 billion more than was in the previous spending review outlook, in which it had flat cash. The reality for local government was much, much higher.

I gave those assurances to COSLA when I wrote to it. I set out that the spending review is for planning purposes, but the local government budget is set budget to budget. It has always been above the spending review outlook, and it is most likely to be again.

We have accepted, as I said in the debate last week, that the way that the figures have been set out is perhaps not the most helpful. Jenny Gilruth is writing to the Education, Children and Young People Committee this week to set out the figures in a way that is absolutely clear.

However, let me be absolutely clear that there is £70 million of new money for colleges—£62 million of resource and £8 million of capital. One of the problems has been that the capital has not been disaggregated in relation to infrastructure projects, such as the Dunfermline campus. That is new money, and Colleges Scotland has welcomed it. It has all been confirmed.

On top of that, there is £8 million—through the child poverty moneys—to deliver employability programmes through colleges. Therefore, £78 million of new resource will go to colleges in 2026-27. Through the spending review period, that uplift has continued. We have been clear with colleges, and work is going on now with them. Some of that is about stability funding, but some of it is about transformation. Colleges will be setting out their plans around what that transformation looks like. The funding will allow a period of stability and it will also allow colleges to get on with transformation, which they are keen to do. I am pleased that that has been welcomed.

Good morning. I welcome the opportunity to discuss the 2026-27 budget and its associated publications with the committee. I thank the committee and its clerks for the important pre-budget scrutiny that was carried out, and I welcome the opportunity to discuss the draft budget in more detail.

This year, the Government published an unprecedented volume of fiscal information, including not just the draft budget but the Scottish spending review, the infrastructure delivery pipeline and the draft infrastructure strategy, alongside more than 20 additional detailed supporting publications.

On 19 January, we published the strategic integrated impact assessment, which brings all the individual assessments together in a single coherent document. That allows us to offer a clearer view on the strategic and cumulative impacts of the decisions that have been taken in the budget. My hope is that that integrated approach will strengthen the transparency of our actions and, in turn, support more effective parliamentary scrutiny.

The approach marks a clear shift in how we set out future spending plans. It is the first time since 2011 that multiyear resource and capital spending plans have been presented together alongside the budget. The aim is to give the Parliament, stakeholders and the public a clearer and more stable view of the outlook for public spending. This year, we have also focused on producing a coherent set of fiscal publications with clearer alignment between the budget, the spending review and long-term infrastructure planning. I hope that that more integrated approach has assisted the committee in its scrutiny.

The budget is intended to support people and families across Scotland through funding for our social contract, including continuing to provide free prescriptions for all, maintaining the abolition of peak rail fares and ensuring that Scottish students pay no tuition fees; the introduction of additional measures that are designed to mitigate on-going cost of living pressures; and support for actions that encourage children’s participation in sport.

In relation to the other publications, the spending review sets out the Government’s medium-term financial plans, which cover resource spending up to 2029 and capital spending up to 2030. That provides organisations with greater certainty to plan ahead. The infrastructure delivery pipeline summarises major planned infrastructure projects and highlights priority investment that is intended to support long-term resilience and growth, including in areas such as housing. The draft infrastructure strategy sets out long-term priorities for infrastructure investment and describes how that investment supports wider economic, environmental and societal objectives, thereby aligning capital planning with the Government’s broader strategic aims.

Those additional publications provide a better platform for the committee to carry out scrutiny, and they are anchored in the Government’s four central priorities. First, on eradicating child poverty, the budget includes a £49 million increase to the tackling child poverty fund and uprates the Scottish child payment to £28.20. Secondly, the budget will grow the economy through changes to non-domestic rates, including changes to the basic, intermediate and higher property rates and a 15 per cent relief over the next three years. We are also investing more than £45 million to drive innovation, enterprise and entrepreneurship. Thirdly, we are tackling the climate emergency by providing more than £5 billion of climate-positive investment in 2026-27. Finally, we are improving our public services by investing record funding of almost £22.5 billion in health and social care and providing a real-terms increase in local government funding compared with the budget for 2025-26.

Underpinning all four priorities is the need for transformation. The Government has been clear that maintaining high-quality public services will require change in how services are delivered, with a focus on prevention, improved outcomes and long-term financial sustainability. With the publishing of portfolio efficiency and transformation plans as part of the spending review, there is further information on how each area contributes to the overall sustainability of the public finances, and we expect the plans to yield savings of £1.5 billion a year by 2028-29 for reinvesting in front-line services.

Convener, thank you again for the opportunity to attend today, and I look forward to discussing the budget and associated fiscal publications in more detail and to supporting the committee in its scrutiny.

There is a link, which leads you to a table—which I can share with the committee if it would be helpful. It lays out a significant level of detail.

The pipeline is split into two main areas. In one, the final business case for the projects has been approved and the funding is in place. The other is for those where the business case is still in development and therefore that funding will be allocated in future budgets. There is also a third tranche of projects that are not at that stage yet.

We have provided a significant uplift in the culture budget—

It is for the Cabinet Secretary for Constitution, External Affairs and Culture and Creative Scotland to work out the details of who gets what. A lot of funding has gone directly to smaller arts and culture organisations that were struggling, which has brought stability to those organisations in constituencies across Scotland. We need to balance funding for the national performing companies with funding for local arts and culture projects whose viability was under question. Such judgments always need to be made.

Angus Robertson has been engaging with the national performing companies on their concerns. However, if you speak to some of the organisations that are now getting funding across the spending review period, they will tell you that the right decision was made on where funding should go. There is never enough funding to keep everybody happy, so a balance must be struck, and that balance has focused on local arts and culture projects.

Well, no. With regard to local government, if you look at table A.09, you will see that it actually lists all of the areas that are subject to in-year transfers, for the very reason that we want to be transparent. That has been the same in the last few budgets, so that information is there.

Sometimes these things happen for portfolio and policy reasons. The fact is that, once the money is baselined, ministers have no control over it if they want to change policy. The active travel line for local government is a good example of that. As I understand it, the Cabinet Secretary for Transport has changed the policy with regard to how active travel funding is to be given. We can provide more detail on that, but if that money had been baselined, she would not have been able to do that; she would have lost any control over being able to make changes in policy.

There is a balance to be struck here. Do you just put all the money out the door and then, if there is a change of policy, do you have to bring the money back? These are judgments that have to be made. We have baselined a lot of money, and we have done so each year. The direction of travel has certainly been towards baselining more and more funding.

Ellen, can you remind me what the additional baselining is? Is it £2.2 billion?