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Will Alexander Stewart give way on that point?

As a Government, we are proud that the 2025-26 Scottish budget delivers around £64 billion of funding to deliver on our programme for government, and that it supports our top priorities, which are to eradicate child poverty, grow the economy, tackle the climate emergency and provide high-quality and sustainable public services.

Just yesterday, I saw a key example of how society will benefit from the budget when I visited the excellent national treatment centre in Kirkcaldy. I was able to see how it is providing thousands of additional appointments and diagnostic tests, and I thank those working at the centre who took time out to talk to me.

As a Parliament, it is important that we recognise that the budget is set against continued and unprecedented challenges to public finances. The block grant position for 2025-26 represents only a 1 per cent increase in real terms for resource following the very welcome reset of budgets in 2024-25, which started to address the austerity of the past 14 years. Although the United Kingdom autumn budget was a step in the right direction, this Government is clear that the extent of the challenges that we face in our public services will not be addressed in a single year.

That further underlines the need for clarity from the UK Government on its longer-term investment plans and commitments. I will be pressing for that clarity in my engagement with His Majesty’s Treasury and in the work towards the UK spending review over the coming months

The great unknown, of course, is the net impact of the UK Government’s hikes in employer national insurance costs, which we estimate could add more than £530 million in directly employed public sector staff costs. If we include the costs of staff delivering wider public services, such as general practitioners, dentists and social care staff, the figure would increase to more than £700 million.

It is essential that the UK Treasury fully funds the actual costs for Scotland’s public sector, but it has indicated that we will instead receive a much lower-value Barnett share of spending in England. That is unacceptable, and Scottish ministers are pressing the UK Government to fund those additional public sector costs in full. Scotland and its public services should not be punished because we have chosen to invest more in public services and in the pay of those delivering our public services. We need an urgent decision on that to give public sector employers—including the national health service, the police and local authorities—clarity to inform their spending decisions.

I want to provide as much clarity today as I can, particularly for local government. I recognise that councils are in the process of finalising their budgets. Although we do not yet have figures from the Treasury, I want to support local government in managing its planning assumptions. I can therefore confirm that, as things stand, I am aiming to provide funding that covers 60 per cent of the reported costs for all portfolios. That means that I will commit to providing local government with an additional £144 million to support the cost of the hikes that have been inflicted on the public sector by the UK Government.

By providing councils with the equivalent of a 5 per cent national increase in council tax, the certainty that I offer today should reduce the pressure on council tax decisions locally and help councils avoid inflation-busting increases. I will follow up with further detail on the issue once I receive further clarity from the Treasury, which I continue to press for.

The measure will impact 92 per cent of hospitality premises, which is the vast majority. The local pub and the local restaurant are the priorities that the SNP Government is focusing on.

More widely, as part of the Government’s commitment to net zero and tackling the climate emergency, the budget will commit £4.9 billion of investment with a positive benefit for the climate. That will support our commitment to scaling up renewable energy, restoring Scotland’s natural environment, expanding our public transport and active travel networks, and supporting a step change in how we heat our homes by investing more than £300 million in energy efficiency and clean heat measures.

Our public services are an integral part of our daily lives, and we remain committed to protecting those valued services through the budget, building on many years of investment by the Scottish Government. I am proud that the 2025-26 budget takes significant steps in continuing the Government’s investment in our front-line staff and public services, including record investment of £21.7 billion for health and social care and more than £15 billion for local government.

At the start of this year, the First Minister said

“There is nothing wrong in Scotland that can’t be fixed by what is right in Scotland.”

The budget is all about putting the resources in place to do just that.

I end with a reminder to the Parliament of the important measures that the Government is putting in place for the people of Scotland: record NHS investment, including money to reduce waiting lists and make it easier for people to see their GP; tax choices that put money in the pockets of low-income and middle-income earners and that help hard-pressed local pubs and restaurants; winter heating payments for older Scots; more affordable homes; investment in childcare and nursery education through more jobs and business growth; more breakfast clubs in our schools; £4.9 billion for positive climate action; a record increase in funding for local services; transformational increases in culture spending; and action to mitigate the two-child cap, which will lift 15,000 children out of poverty.

I am proud of the budget and all that it delivers for the people of Scotland, and I urge the Parliament to support it.

I move,

That the Parliament agrees to the general principles of the Budget (Scotland) (No. 4) Bill.

I am pleased to lead today’s stage 1 debate on the 2025-26 Scottish budget bill. Since I introduced the budget to Parliament in December, the Government has engaged widely across the Parliament to build consensus on a spending programme that will deliver for all of Scotland. Parliament can see that the offer to Scotland has been enhanced by the separate agreements that were reached with the Scottish Liberal Democrats and the Scottish Greens, and by the further action on and investment in free school meals, nature restoration and neonates who are affected by drugs, along with the introduction of a bus fare cap pilot and targeted support for hospices and colleges.

That collaborative approach between parties demonstrates how the Scottish Parliament was designed to work: effectively engaging and negotiating to agree solutions for the benefit of Scotland. We will now move ahead with delivery, providing improvements to services in Scotland, which is what the people of Scotland want.

As a Government, we are proud that the 2025-26 Scottish budget delivers around £64 billion of funding—[Inaudible.]

Will the member give way?

As committees will be aware, the Government has called on the UK Treasury to fully fund those additional costs. On 24 January, the Treasury advised that Scotland will receive only a Barnett share of the available funding, which is deeply concerning because it will create a shortfall of £300 million.

I begin by recognising the importance of the role of Parliament’s committees in scrutinising the Scottish budget. I thank the Finance and Public Administration Committee for its budget report, which was published yesterday. I will respond to it in detail formally ahead of stage 2.

In my statement to Parliament on 4 December 2024, I spoke of how we can deliver progress for the people of Scotland only if there is a willingness to work together across the chamber. That is how Parliament is designed to work: as a Parliament of minorities improving the budget, as the people of Scotland would expect. The agreements that were reached with the Scottish Liberal Democrats and the Scottish Green Party demonstrate what can be achieved in that collaborative space, and I welcome that constructive engagement.

The Government recognises the importance of longer-term financial planning and fiscal sustainability. In looking ahead to the new financial year, and given the clear view of the Finance and Public Administration Committee, I have instructed officials to begin planning for a Scottish spending review that will identify opportunities to optimise the use of Scottish Government funding over the longer term. I will engage with the committee and the Scottish Fiscal Commission on those plans.

On the infrastructure investment plan pipeline refresh, multiyear certainty on capital budgets is essential to determine what projects and programmes can be delivered over the medium term. For that reason, the UK spending review is essential to support that process.

We have already set out a number of priority projects in the budget. A number of capital projects were identified and named, giving a clear sense of priority to those projects. However, I will set out the longer pipeline as soon as I can after the UK spending review is concluded.

I thank the committee for its recognition that the Scottish Government has taken steps to improve the transparency of the new budget, and I appreciate the point that the committee has raised on the new approach on budget comparators and in-year budget revisions. There are complexities in the Scottish budget, where policy responsibility can sit in one area with delivery elsewhere. However, I will reflect on that to consider whether we can do more to simplify the presentation of the next budget beyond what we have already done.

I appreciate the committee’s support for the Government’s tax strategy, including our commitment to further develop evidence and evaluate tax policy. We will continue to closely monitor the impact of our tax policy decisions using a range of evidence, and we will publish further research on the impacts of that later this year.

On council tax reform, the joint working group met yesterday and agreed to begin a process of engagement and consultation this year. As part of that process, the Scottish Government and the Convention of Scottish Local Authorities will jointly seek to build consensus across local government and the Scottish Parliament on potential areas of reform. Together, we will engage with Opposition spokespeople and council leaders. I also welcome the Local Government, Housing and Planning Committee’s inquiry into council tax reform.

The Minister for Public Finance will speak more about public service reform during the debate, but I can confirm to the committee that the Government will continue to report progress to the Parliament at six-monthly intervals.

We take any issues that are raised by the committee seriously, and we will seek to respond to them in as positive a way as we can. However, I am aware that the Minister for Public Finance has had quite deep engagement with the committee on his work on public service reform, and I know that he is keen to continue that engagement on the detail of that work.

On the PSR invest to save fund, I am pleased to confirm that we have written to public bodies to provide guidance and an application form to invite funding bids. I am happy to write separately to the committee to share that information.

I want to move on to recognise some key points that were raised by the other committees in their budget scrutiny. Eradicating child poverty, which is the Government’s top priority, has been of interest to a number of committees. The Joseph Rowntree Foundation’s report “UK Poverty 2025” is clear that only Scotland is expected to see child poverty rates fall by 2029, with rates forecast to rise in England, Wales and Northern Ireland. That is recognition that the action that is being taken in Scotland is reducing child poverty, but more work has to be done.

The budget invests significantly to reduce the pressure on household budgets by allocating more than £3 billion a year to policies that tackle poverty and the cost of living. The Government is going further to prioritise action to develop the systems to mitigate the two-child limit, which could lift 15,000 children out of poverty. More widely, the new budget will invest £768 million in the affordable housing supply programme next year, an investment that was welcomed by the Economy and Fair Work Committee, which highlighted the lack of affordable housing supply.

It is a sad fact that poverty leads to lower achievement at school and beyond. That is why the Government will invest more than £1 billion in high-quality funded early learning and childcare as part of the budget. The new budget also includes £186.5 million for local authorities to maintain teacher numbers and £29 million for additional support needs to support the recruitment and retention of the ASN workforce, the latter of which is of particular interest to the Education, Children and Young People Committee.

Growing the economy and delivering on our net zero ambition are strategic priorities for the Government and are of interest to multiple committees. We are almost tripling our investment in offshore wind to £150 million, which will support the economy and help to deliver on our net zero ambitions.

To deliver our programme of support for Scotland’s businesses, the 2025-26 budget provides £321 million for our enterprise agencies, which is an increase of £14 million from 2024-25.

More broadly, in 2025-26, the budget commits £4.9 billion of investment with a positive benefit for climate. Our strong focus on sustainable transport means that nearly £2.9 billion will be invested in public transport infrastructure and green initiatives.

Delivering and supporting high-quality sustainable public services is a priority for all of us across the chamber, which is why the budget provides a record £21.7 billion for health and social care. That investment will increase capacity as well as focusing on driving productivity and optimising existing resources.

The budget recognises the importance of local government and will provide local authorities with a funding package of more than £15 billion in 2025-26. The Local Government, Housing and Planning Committee has called for a reduction in ring-fenced funding, and I am pleased to say that the 2025-26 budget baselines a further £524.9 million of local government funding.

I appreciate that all budgets in the public sector are under pressure. I intend to give guidance on employer national insurance contributions to all public sector organisations, including local government, as soon as possible.

I am sorry, but I do not have time.