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But it will mean additional funding for local government that currently is not in the local government settlement. This goes back to the point that when we have policy development—whether in the child poverty space or the sport space—a lot of the funding will find its way to local government once agreements are made on delivery and what will be delivered. That is a good example of why local government funding can be more complex.

We want to get to a sensible arrangement without too much red tape around it. We want to keep things as straightforward as possible. A lot of delivery will be done through school provision. The outcome is the important thing, and that is making sure that kids learn to swim.

We have tried to learn about what worked from last year. The process has to be on the power of the proposition. There is no point in scattering £30 million across the place and letting a thousand flowers bloom; it has to be about those who have a proposition and can show how it could be done.

12:45

We have been having discussions with, and giving encouragement, to local authorities that we think could benefit. With, for example, the Falkirk, Clackmannanshire and Stirling scenario, we have been in discussion with the councils for quite some time and have been encouraging them to think about such an approach. After all, one of those local authorities is one of the smallest in Scotland, and it has a fragility, because of its size and capacity.

There are, for sure, some really good people within that local authority, but the issue is the scale, and there has to be collaboration with neighbours. That council is up for it, but it needs the others to be willing dance partners in order to get on with it.

There is a lot of scope here. The invest to save money is only to oil the wheels—the momentum has to lie with the local authorities themselves.

We put that table in for that very reason—so that we could point to it and say, “Here is the position.” I have been really clear about the employer national insurance contribution and the pay issues. Between them, we are talking about more than £250 million. However, if we compare the budget to the ABR, those two elements—a quarter of a billion pounds, in-year—which came after the budget was published, will shift the comparison. Further, we do not know what additional funding may end up coming through in 2026-27. We have to have a fixed point in order to compare like with like.

With other budgets, it is more straightforward. Although there might be a little bit of in-year movement, it is not of the magnitude that we have with local government. It is around the edges, and that is fine. However, for local government, in-year movements are material, which is why we have tried to set that out.

It is the highest except for last year.

For the past two years, we have given local government a pretty significant increase in the general revenue grant. That is where local government says that it wants the money, because it is flexible. I would hope that, given that funding, local authorities would make responsible decisions and minimise any proposed increases in council tax.

I know that local authorities will be in differing positions. We have been giving particular support to some of the smaller local authorities, which we think need to get very much into the shared services space, as they are trying to support services with a very small council tax base. There are particular challenges for the smaller authorities, and we are engaging with them directly. I would hope that we see reasonable positions on council tax, given the funding that is being made available.

I can bring in Ellen Leaver. It might be helpful if she gives a little bit more detail.

I understand that point. A consultation is on-going, which is important in relation to that wider point. It is important to reassure people on that; a lot of joint work has been done with COSLA.

The fundamental point is that we would want to link any future wider revaluation to wider reform of the council tax and the consultation on that closes at the end of this month, that is, at the end of this week. It is aimed at building political consensus around what local taxation should look like, not just among politicians—we are trying to take the public with us, too. Council tax can be pretty contentious—it has a contentious history—and we want to build consensus around what the future looks like for local taxation.

That will clearly be an issue for the next parliamentary session rather than this one, given the timeframes. However, I hope that the consultation’s findings can be provided to the next Parliament as a starting point for fresh discussions—which I hope will be on a cross-party basis—about what the art of the possible is. There have been incremental reforms in relation to second homes and empty homes, the mansion tax and so on. However, there is a more fundamental question that can be addressed only by building enough consensus. That will be for the next Parliament to do.

I have had a lot of engagement directly with hospitality, as have ministerial colleagues. We absolutely want to hear what they have got to say. I also remind folk that this is an independent process. The Parliament agreed to and welcomed the move to three-yearly revaluations that would be independent of the Scottish Government and local government. It is also important to remember that the average increase is 12.23 per cent.

There is an issue about the methodology, which is why the review of hospitality methodology—I am not sure that that is its correct title—is under way, chaired by Brian Gill KC. That work will get to the heart of a reasonable concern that hospitality businesses have in relation to what is and is not fair, particularly in comparison to other sectors. We have listened to that concern and accepted it; the review is an attempt to make a more fundamental change.

The transitional relief of £184 million is a big investment in supporting hospitality businesses and others to not have those big costs up front. Around 89,000 properties—which is 96 per cent of all retail, hospitality and leisure properties—could benefit from having zero or reduced rates. The budget guarantees that support for three years of the revaluation. It is not a one off—it is for three years.

We will continue to discuss the issue with the hospitality sector. If any further funding comes from the UK Government in recognition of the issues with its revaluation, I will commit to further supporting hospitality with that funding. I am pushing the Treasury for an answer. Clearly, something is being discussed and it is not being forthcoming with the detail of what it is, but we will pursue the matter to find out whether it will result in further funding that can help the hospitality sector.

I know that I will get the name of it wrong, but we have a regular round-table meeting with the hospitality sector that Ivan McKee, Richard Lochhead and I regularly engage with. Quite often, material from the sector is highlighted, which we then analyse. We welcome the flow of information. I give the assurance that we will continue to carefully look at and reflect on any information.