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The envelopes will, in essence, set out the spending priorities and spending plans of the Government. The Scottish Fiscal Commission also said that it would encourage the Opposition to do likewise. The SFC seems to be saying clearly, for example, that if, given that we are heading towards an election, there are views that those spending plans are not correct and that some of that money should be shifted, that would be an opportunity for others to set out different spending plans. That is absolutely right.

I do not think that we got a good deal out of the comprehensive spending review, either on resource, with the 0.8 per cent increase, or on capital, with the 0.3 per cent increase—even compared to other devolved nations. There is an opportunity cost in the £1.1 billion of resource that we could otherwise have had. Those small margins of difference matter to the budget. That brings us back to the point about some of the difficult decisions, because having that resource would mean that there would be £1.1 billion less that we would have to find in the sustainability plan, which would make the spending review a lot easier.

This is about the fiscal framework. FPAC, which includes you, has produced a report that puts some questions about the limitations and the constraints of the fiscal framework. That is probably an area that we could all agree on.

If there is a requirement for an increase in funding to do more in that space, that will, of course, be a key priority for the Government, but it is all about what is being done and ensuring that the money is spent on effective interventions. All that I am saying is that those effective interventions are in a better place than perhaps they were a few years ago in having an evidence base.

If you have suggestions, Michael, of things that we are not doing at the moment and which you say would work, I would be very happy to hear them, and I am sure that the Cabinet Secretary for Health and Social Care would be willing to hear them, too. However, I think that we know where the effective interventions are, and we need to ensure that they are happening everywhere, that people can get assistance when they ask for it, and that we tackle the wider poverty issues that we know drive addiction not just to drugs but to alcohol.

I am all for having that discussion. If you want to follow up with some suggestions and discuss the matter in a very constructive space, I am all for that.

First of all, congratulations.

No, of course not.

The 0.8 per cent a year is lower. I think that average growth is 1.5 per cent for UK departments; had the funding for that day-to-day spend grown in line with the UK Government’s overall spending, we would have had, I think, £1.1 billion more to spend on our priorities over the next three years.

The situation is without a doubt challenging, which is why we have set out what we have set out in the fiscal sustainability delivery plan—that is, the need for us to reform and to drive efficiencies, particularly in relation to corporate costs. Incidentally, the UK Government is doing exactly the same on workforce and corporate costs, but we are very constrained.

I know that, in its report, the committee made a very timely point about the constraints of the fiscal framework—I could not agree more with that. As of yesterday, we have a new Chief Secretary to the Treasury; I have had a meeting with my Northern Irish and Welsh counterparts, and we are keen to engage quickly, because there are a number of issues in train. One is a more fundamental review of the fiscal framework, which we have asked for and want to pursue. However, there are other short-term changes that could really help. For example, being able to borrow more than would just cover the cost of reconciliations would help to smooth out particular peaks and troughs.

There are a number of real constraints in the fiscal framework, and it is time that we addressed them. We do not want to wait until 2028, which is the next formal review period—we are keen to pursue the issue as early as possible.

In practice, and leaving aside the formality of it, the fiscal framework underpinned much of the discussion with local government in the lead up to the 2025-26 budget. There was early engagement, with no surprises and with an open-book approach. That was how we conducted discussions and negotiations for the 2025-26 budget, which may be why that budget received a more positive response from local government than budgets had in some other years. The Accounts Commission has confirmed that there has been a real-terms increase in local government funding for two years in a row.

There have been issues with formal adoption and with the desire from local government to have a rules-based framework, but that has been only one aspect of our discussions, and we have agreed on 95 per cent of everything. I wrote to local government, asking councils to agree on the 95 per cent so that we can codify elements of the framework and can follow the same principles with the 2026-27 budget.

I do not want to put words into local government’s mouth, but I think that formal adoption has been held back by the issue of rules-based funding. We have spoken about that here before: we do not believe that we can agree to that because there are so many unknown quantities with a rules-based approach. For example, it would already have been blown out of the water because of the change to employer national insurance contributions, which that approach could not have encompassed. Would a rules-based formula apply only when it suited and not when it did not? Local government was given a lot of money following the decision to fund a portion of those contributions. That is one example, and there are many others, of ideas that sound good but that unravel very quickly in practice when there are issues such as ENICs.

We are asking local government to codify the good stuff, including the open book, early engagement and the way that the budget has been handled, because that has led to a good result. I think that we should be able to bank that and to move on.

I assure you that it was not written on the back of a fag packet. Anyone who knows Ivan McKee would know that it would be far from that. He is very methodical and detailed, which is not always welcomed but is the right approach to take, and—

We have taken an approach that is very much focused on delivery. The priority areas that the First Minister set out when he came into office gave a greater focus to areas that are to be prioritised for the funding that is available to us. Within those themes, we have gone through all areas of spend in each portfolio area and pivoted to those priorities. A lot of that has required difficult decisions to be made about things that we cannot take forward and things that we might have to return to in the future should finances allow us, so that we can focus on the priorities and ensure that we can fund them.

It is fair to say that there is the opportunity in the fiscal sustainability delivery plan, through efficiency and doing things differently, to ensure that the money goes further, even with those priorities. That is what we have set out, to ensure that every pound that is invested is invested in the most productive way. That work continues—Ivan McKee is leading on that. I know that he is keen to come back to the committee and discuss those plans in more detail. I just wanted to assure the committee that that work has gone on in detail across all portfolio areas.

Let me give you one example, which was quite contentious. It was about how far we could go with free school meals. We have agreed to prioritise those children who are most in need, linking the further roll-out to those who are in receipt of the Scottish child payment. We will not be able to roll out the universal offer as far as we had perhaps initially wanted to, and we feel that, with our limited resources, we have to prioritise those children who are most in need. Rolling out free school meals to Scottish child payment recipients is a good way of doing that, and we know that it will help to continue to reduce child poverty levels.

That is one example. There are many others, but that is an example where the decision was a difficult one to take. We were criticised for it but, in a climate of constrained funding, we made that decision.