Seòmar agus comataidhean

Yes. It is not my area of specialist knowledge, but all of the issues are considered as part of the energy requirements of our country going forward and the energy use that will be required in the modern world.

Data is just one part of that future, but it is a critical part. We could be at the forefront of much of the technology. We have some fantastic data centres and data capability—here in Edinburgh in particular, where we have innovation and partnering with universities that are at the forefront of using the knowledge for public good. I also point out that the work is not out on its own; it is about using the knowledge and capability for improving public services for the public good.

I am happy to write to you, convener, if you would like a little more assurance on the data centre issue in particular.

Yes. We want to try to be helpful.

The pot that we announced is just shy of £30 million, and bids have come in from across the public sector. As I said, the criteria would give priority to reform in areas such as digital, shared services, upstream prevention and so on.

I would welcome bids that take a place-based approach and involve, for example, corporate functions being shared with other public sector bodies. Issues with some governance arrangements would have to be overcome but, if back-office functions can be shared across more than one public body, I am all for that.

On estates, we must recognise that working patterns have changed—you mentioned earlier the effect of Covid—and people are unlikely to go back to the working practices of the past. That means that the estate can look different because people are working differently, and there are huge possibilities around the sharing of space, with people coming together to provide services all under one roof.

We should not think about this just in sectoral terms. If people present us with good, fully worked-through ideas and can show that they will make savings and can be delivered, we are all ears.

I recognise that those issues are not just for local government, as the national health service, for example, faces some of the same challenges.

The report that the Accounts Commission published in the summer was helpful. It called on councils to align workforce plans and strategic priorities, so that they can ensure that their workforces are the right size and shape and that their staff have the right skills. It is about having the right people in the right places.

We know that there are some critical workforce shortages in this area, and it is no surprise that they are mainly in social work and social care. Not every part of the workforce will be on a downward trajectory. If you look at social care and the investment that is required into the future, you can see that we will need more people to come and work in health and social care, so we need to ensure that the funds will be there to prioritise those frontline services, which will mean doing things differently elsewhere.

As we have touched on already, planning and environmental health are ripe for a shared-service approach. At the moment, councils try to hold on to those specialist staff but find that, often, they go to another local authority, perhaps because it is bigger and has a better rate of pay. Could we do something regionally in that space? Could some services be nationally provided? We absolutely need to be willing to have those discussions about whether every one of 32 local authorities needs every one of those departments. There is already some sharing of staff, which I welcome, but that needs to be the default across the board. Perhaps some larger local authorities could provide those services to smaller neighbouring local authorities. We need to get our heads into that space because, otherwise, councils will continue to fish for people in the same small pond rather than thinking about how they can deliver the services differently but more sustainably. That would be beneficial, as dealing with the costs of recruitment and backfilling gaps in the workforce with agency staff is an expensive way to deliver services.

The social care space also has some good examples of local authorities being able to recruit and retain staff more ably than others. People should look at how those local authorities have been able to hold on to staff and reduce agency costs. The same thing applies in the health service, although some health boards have managed that better than others. Again, where there is good practice and something has been shown to work, I would need some convincing about why that is not being adopted elsewhere, if I can be so blunt.

This is not some complex magic answer. A lot of the answers are already there, but they need to be scaled up and that approach needs to become the default for how services are provided.

I recognise the point that Meghan Gallacher is making about council tax payers and fairness. I point out for context that the provision in the budget for local government did see a further real-terms increase in funding in 2025-26, after increases in revenue funding in both of the past two financial years. It is not just us who are saying that; that has been independently verified by the Accounts Commission. As a longer-term context, the total local government finance settlement has increased by almost 50 per cent between 2013-14 and 2025-26. That is the background context.

I should say that I fully recognise that costs have increased for every part of the public sector. The role of inflation means that everything costs more, and of course pay has increased because of inflationary pressures. I absolutely accept all of that.

We said to local government that, because it was a reasonable settlement, we hoped that council tax increases would be kept to a minimum. There was a real difference in council tax rises across the country, as I am sure Meghan Gallacher will be aware. We will set out our position on this at the budget, but you have heard this morning from local government, which of course will argue strongly against any freezes or caps and will set out why it is against such moves. We have funded freezes and caps in the past, but we are also keen to give local government the flexibility that it requires.

We are also addressing some issues with particular local authorities—Meghan Gallacher mentioned one in particular. Some of our smaller local authorities have a fragility, and that is why we are keen to work with them in the reform space and to look at things such as shared services, where costs can be better managed by two or three local authorities coming together. We think that that is a good example of reform. The invest to save fund, which I am sure we will come on to, is there to help oil the wheels of such changes.

We will come to our conclusions on this, but we understand the impact on council tax payers, and that is why we gave that real-terms uplift to local government over the past few years.

We needed to start somewhere. We wanted to see what the interest and level of ambition and ideas would be for an invest to save fund of that magnitude.

We are very thoughtful about, first, the need to keep the fund going beyond one year, and secondly, the level of the fund. For example, we will give some thought to what ideas were not able to be funded through the pot and whether we could crank up some of the momentum, as I am personally very keen to keep it going.

I very much appreciate the points that you have made. I will of course reflect on everything that is said today about the timing of the budget and other matters.

I go back to the point that the timing is intrinsically linked to the SFC’s final deadline for receiving detailed information on borrowing, funding, expenditure and public sector pay proposals. The protocol with the SFC requires that we confirm that information four working days before the budget. For a 15 January date, that would be 9 January. However, if the date for the budget were 7 January, which you suggested, that deadline would be 29 December. The issue would be all the public holidays during that period and the requirement for us to get all that information. It would be better to have that first working week in January in which to work with the SFC to finalise the information.

There are also the unknowns at the moment. For example, we do not know what new tax propositions might emerge on 26 November or whether they will impact on the Scottish budget and devolved taxes. The SFC will need time to work through that complicating factor.

I am willing to reflect on committee members’ views on the date, but I am trying to set out some of the challenges that would come with that.

I do not know whether Alasdair Black wants to say anything.

The reduction will happen over a five-year period and it is being delivered through a number of mechanisms that Ivan McKee has set out in the framework.

We expect all parts of the public sector to produce plans on how they will reduce their corporate costs. Some of that will be in the shared services space, so it is about sharing some of the corporate functions, such as human resources or payroll. Our Oracle system is on offer to the public sector, and a number of public sector organisations have approached the Scottish Government about coming on to the Oracle system. Organisations will have to look at how those functions are shared, rather than, for example, every single health board having all of the functions, which cannot be the way forward.

All areas, public bodies and parts of the public sector—even some of our small public bodies—are expected to set out detailed plans on how they will get there and make efficiencies. Ivan McKee is regularly monitoring that as it comes in. The invest to save funding was also important to oil the wheels of some of that work. Some of the efficiencies might be in the voluntary redundancy space, but others will come from automation and being able to do things differently. A lot of interesting bids for that money have been agreed to.

Richard, do you want to say a little more about that?

Yes. However, I will come back to you with the actual numbers. The target is significant, but it is more than achievable on the bigger scale, as you have said. However, it must be done in the right way: it is not about randomly taking an axe to services but, in the main, about natural attrition and voluntary severance. We have talked previously about the need to be clear about the no compulsory redundancy policy: in extremis, if all other routes have been explored, that will remain a possibility.

We have a Cabinet sub-committee that is specifically aimed at tackling and eradicating child poverty. At its most recent meeting—again, without giving away any trade secrets—we got into that space. For example, we talked about whether the mental health offer through the health service is reaching those children and families who need it most.

The same applies to our childcare offer. Is it flexible enough to meet the needs of families who are either not in work or are in low-paid or part-time work? It is about employability. More flexible childcare could assist those families out of poverty.

I assure you that, whether it is colleges, childcare or health, we are looking at what more we can do with the tens of billions that we spend on our public services to point them more in the direction of lifting families out of poverty.