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I would be very concerned about that, which is why I made the point that getting full funding of the public sector’s NI increase in Scotland is very important. Local government makes the same argument. Just because the local government position in Scotland is beyond what the Barnett share for local government would be, there should not be a punishment for local government—or the health service or any other service—because over the years we have invested in our public services beyond what the rest of the UK has invested in its public services. The UK Government made a decision on employer national insurance contributions out of the blue, without any warning, and the onus is on the UK Government to fully recognise the impact on Scotland’s public services, including on local government.

When it comes to the final number that we get from the UK, what do we do with it? Whatever that number is, I have said that I want to be fair to local government. However, being fair to local government does not mean that I can cover 100 per cent of the costs of employer national insurance contributions, because I would have literally nothing left for the rest of the public sector, including the health service, the police and the fire service.

I want to be fair, and I recognise that timing is an issue for local government, given that budget setting will begin soon, so we need to resolve the matter. All that I can say to you and the committee is that we are chasing the Treasury on a daily basis to get an answer.

I would say that we have recognised the position of and the importance of capital to local government. The 2025-26 budget sets out more than £7 billion—sorry, I am just looking at the capital grant figures. [Interruption.] I will come to the affordable housing position in a moment.

In my earlier answer, I referred to the general capital grant. We have allocated an additional £108 million of general capital grant, which is a real-terms increase of 14.2 per cent, and we have reinstated the £31 million that was used for the 2024-25 pay deal, giving a total capital increase of £139 million.

I would perhaps push back slightly on some aspects of what COSLA has said. For example, £40 million was allocated from ScotWind for capital funding for local government, which is essentially completely discretionary as long as it is spent in the net zero space. It is new money, but COSLA has perhaps not recognised it as such in the way that I would have liked or expected it to do. There will be very few restrictions on how that £40 million is spent, but it is not regarded as new money in the way that I think that it should have been.

Ellen Leaver has pointed me to the fact that, beyond that, we also have the £768 million for the affordable housing supply programme. That was one of the big asks from COSLA for the housing budget. We also have other investments from which local government will benefit, such as the energy efficiency and clean heat measures.

I know that COSLA has asked for additional capital, but I think that the capital position is fair.

In principle, I am very keen to look at making sure that local government has the maximum number of levers available to it, although that would have to be within the context of financial sustainability and affordability. That does not necessarily mean that local authorities would all use those powers. The visitor levy is a good example of where local government has the option; it does not have to use the levy, but can choose whether to do so.

We are consulting on the potential for a cruise ship levy, and our “Programme for Government 2024-25: Serving Scotland” document makes it clear that we are going to

“Intensify work on designing a cruise ship levy”.

Again, that will not be for every local authority—it will be of interest to some more than it is to others.

Our “Scotland’s Tax Strategy: Building on our Tax Principles” document commits us to establishing

“criteria that should be considered when determining the level of government at which a tax could be delivered”.

That will allow us to consider proposals for taxation in a consistent way.

The joint working group on sources of local government funding and council tax reform is continuing to meet—in fact, we will meet next week. We are looking at proposals for the future of local taxation, because I think that there is a desire for a fairer system in that regard, but trying to build political consensus around that is important. It will not get past first base in a new session of Parliament if it does not have a degree of parliamentary consensus.

I mentioned earlier that we will consult on the general power of competence. Again, that has to be delivered in a way that has substance and meaning for local government, rather than simply being something theoretical that might not be used.

Local government has been keen to pursue a number of areas, including a levy on second homes, for example, which we have delivered within the confines of what we are able to do through secondary legislation. Going further than we have already done on that would require primary legislation.

Fundamentally, COSLA and local government are the employers and lead any discussions around pay. We have become involved to support the resolution of some of the pay disputes, because industrial action is also costly. We have therefore tried to support resolution in order to avoid that.

One of the things that COSLA argued for very strongly was for money not to be ring fenced. In this year’s settlement, we have therefore minimised ring fencing. Since the Verity house agreement, I think that £1.5 billion of funding has been de-ring fenced, including £500 million for 2025-26.

What we have not done in relation to the £1 billion increase is say, “That is for pay, that is for this” and so on. In essence, it is for local government to decide how it will manage its funding. Within that is, of course, the discretionary funding—the £289 million—and real-terms protection for the revenue grant. Each local authority then has to make a decision about the level of council tax.

I guess that that also brings me back to the point that I made earlier. The pay costs of the public sector are substantial, which requires us collectively, including local government, to look at how we support that going forward. That will mean looking at the size and shape of the public sector and doing things differently. Shared services, for example, are perhaps not as extensive in local government as they could be.

I hasten to add that that is a matter for local government. However, when we are looking at public service reform across other parts of the public sector, such as considering how we can do things differently and how back office functions can be shared, I would hope that local governments are also in the space of looking at some of that, which I think that they are.

Local government is getting a fair settlement of £1 billion of extra funding—which is exactly the same figure that Alexander Burnett and his party would cut from the budget. If we listened to the Tories in this place, local government would not be getting any extra money, because there would be £1 billion less because of unfunded, unaffordable tax cuts.

I say to Alexander Burnett, and to any other Tory members, that they cannot come and ask for more money in this place when they want to cut the budget; let alone that they will not support this budget, which will provide £1 billion of extra support for local government.

That is all right.

Yes. We very much recognise that good-quality affordable housing is essential to retaining and attracting people to Scotland’s rural communities. Since March 2016, we have delivered more than 12,000 affordable homes in rural communities. We know that even a small number of additional homes in rural and island communities can have a significant and generational impact.

Our commitment to deliver 110,000 affordable homes, of which at least 70 per cent will be for social rent and 10 per cent will be in our rural and island communities, is supported by our rural and islands housing action plan.

I will start on a point of agreement with Meghan Gallacher, which is that confidence in the market in the longer term is important. That is why, post the United Kingdom Government’s spending review in June, should our capital allocations show a sustained upward trajectory, which we understand will be the case, I want to give longer-term certainty to the housing sector to boost confidence and have a line of sight of investment.

However, the £768 million for the affordable housing supply programme would not be available if we had listened to Meghan Gallacher’s colleagues, who want to cut the budget by £1 billion. Tax cuts worth £1 billion would eradicate not only the £768 million for affordable housing, but funding for many other good things. [Interruption.] Meghan Gallacher should not come here asking for more money when her party wants to cut £1 billion from the budget.

I agree very much with Paul Sweeney on that point. Lar Housing Trust has shown an innovative way of delivering affordable housing. I have visited a number of its innovative sites, where it utilises buildings that have been derelict for some time and are unpurposed, as well as having new-build sites. I am keen to support that model and am happy to work with Paul Sweeney and others in doing so.

If Parliament works together to pass the 2025-26 budget, councils will receive their formula share of the more than £1 billion of additional funding for local government—the largest increase in recent times. That would deliver an increase of £22.9 million for East Dunbartonshire Council and an increase of £14.3 million for West Dunbartonshire Council, compared with 2024-25. It is then for locally elected councillors to make decisions on how best to utilise the additional funding available and to deliver services to their communities based on local needs and priorities.