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I think that we should have fair pay, and I think that in Scotland, through reaching deals with our workforces, we have avoided some of the costly industrial action that there has been in the health service down south, for example, where the costs to the system and the impact on patients have been very disruptive indeed. We wanted to avoid that.

Where possible, though, we want to link pay to reform. A lot of our discussions have been about getting to a place of willingness to look at roles and responsibilities. The agenda for change negotiations have been very complex, but they have given us the option to look at reform. Some of that has been linked to contracts, the working week and so on.

I am not setting out with an ambition to have higher rates of pay in Scotland for the next decade on a point of principle. However, I think that the investment that we have made in public sector pay has managed to avoid a lot of costly industrial action. That investment has to be affordable, though, and there is a trade-off between pay and head count, without a doubt. There is a need for us to manage the size of the public sector to a place where it is affordable in the long run, and the need for us to make changes there is why we have set out the plans that we have set out.

We have set out in the fiscal sustainability delivery plan a five-year horizon for closing the £2.6 billion gap. As I alluded to earlier, that figure predated the welfare changes—the very welcome U-turns by the UK Government on welfare—which will bring the gap down by a significant amount, but we cannot confirm that amount until autumn. I will probably update the committee in due course about what we are looking at in that respect.

The five-year fiscal sustainability delivery plan sets out how that will be. The spending review will have to have synergy with that in order to be able to set out the spending envelopes that will be in tandem with that plan. Of course, within the spending envelopes, there will be changes—for example, changes to the prioritisation of front-line services and reductions in administration costs—but all of that will take place within the spending envelopes. The spending envelopes will not reduce, but what is done within that spend will change to put them on a sustainable footing, if that makes sense.

Essentially, you will see where the priorities are in terms of the envelopes and growth of funding. We will clearly set out our priorities within that. We will do that for resource, and we will also set out our capital plans in the infrastructure investment pipeline. All of that will be set out.

We are keen to give as much certainty to stakeholders as we can by using that multiyear horizon. As I have said in the committee before, certainty of funding is sometimes as important as the quantum, so we will set out as much detail as we can. We are considering the level of detail that will be provided; we want to provide an appropriate level.

The only other thing that I would add is that we also need to say what might emerge in the autumn budget. We can set out what we are able to at that point, but external events can have a very disruptive impact. I do not think that there has ever been a set of UK spending review spending plans that was delivered, so I give the caveat that what we set out will be based on the information that we have at the time.

A lot of the defence expenditure was in capital spending, not resource spending. I am talking about day-to-day resource spending, which is where the figure of 0.8 per cent compared with 1.5 per cent for UK departments comes from. I am talking about resource spending, not capital spending. It is the day-to-day spending that matters here. We have come off very poorly because of where the reserved and devolved areas are.

We should keep things under review, and we should challenge ourselves and be challenged on areas of spend.

As we have discussed on several occasions, the small business bonus scheme serves a number of purposes. It keeps alive businesses that might not otherwise continue to be so, many of which are located on our high streets and in our town centres, where there are challenges. However, that does not mean that we should not look at how effective the scheme is and at whether, if changes were made to it, it could be more effective.

I am a supporter of supporting small businesses, which are the bedrock of our economy. They are still going through a tough time, given the environment in which they are operating.

I am always open minded and I am open to looking at how we can make improvements to any of the schemes and systems that we have in place. We also need to ensure that we do not create dependency—earlier, we talked about creating dependency in the sphere of welfare. Whatever programmes we have, businesses need to be viable. We want to support viable businesses that provide much-needed services and have a much-needed presence in many communities.

We keep things under review and, if we could support businesses in a more effective way, we should be open to doing that. However, in the current climate, in which businesses are struggling, it would be difficult to tell them that we intended to take away the support that we provide through rates relief. That would not be the right thing to do in the current economic climate, which is very difficult, especially for small businesses.

We will continue to discuss the matter, but those discussions should be about improvements to the system. We very much support the principle of supporting small businesses, and if people have ideas about how we can make the current scheme better, I am happy to discuss those further.

We have recognised the issue of wealth inequalities for as long as I can remember and have been very clear on the principle that those who have the broadest shoulders should contribute more. The difficulty has related to our powers to address that. If this exchange is heading in the direction of wealth taxes, for example, I note that I am in favour of them, but they are very difficult to deliver. Looking around Europe, many have tried to implement them, but not many have succeeded and, recently, the Norwegians have had to rein them back. In principle, I am in favour of wealth taxes, but the question is how they are delivered. I believe that the contribution that people with large assets make should be recognised, but finding mechanisms to do so is the hard bit. As you will be aware, the Scottish Land Commission is in the early days of its work on land valuation and all of that.

It is not that we are not interested and are not looking at those areas, but there are a lot of process issues. You know that the ability to move forward with any additional taxation would require huge negotiations with the UK Government and there would be a whole process to go through, on the presumption that the UK Government agreed in principle—although, I am not sure that it would agree in a lot of this space. Something might appear in the autumn budget that could surprise us—who knows? There is a difference between principle and practice and being able to do something that would work and would bring in resources any time soon. I am pragmatic; you could spend a lot of money pursuing something in that area, but it would produce no funding any time soon. I am quite thoughtful about that.

I was involved in meetings on a daily basis with Ivan McKee and colleagues in the run-up to the publication of the MTFS and the fiscal sustainability delivery plan. Those discussions had already taken place and had gone into great detail, and they are on-going in relation to the collective responsibility to deliver savings, which is not just my job or Ivan’s job, but everybody’s job.

Those discussions happened and went into great detail in advance of the publication of the plan. In the end, however, it is the Government’s plan, and it is everybody’s responsibility to deliver it. That is what will happen.

There is risk with everything. There is a risk in getting up in the morning. However, if we do not make change and are not ambitious, we will not be able to deliver what needs to be delivered.

We have already made progress, which gives me confidence that that level of ambition will be delivered. For example, the programmes that have already been working have saved just over £320 million over the two-year period to the end of 2024-25, with projected savings of nearly £300 million over the following two years. We are focused on the single Scottish estate, the national collaborative for procurement and digital programmes, and on securing commercial value for money, cost avoidance and cash-releasing savings. We have a track record. We are not starting from scratch. A lot of that has been driven by the work that Ivan McKee and his predecessors have undertaken.

As I said, the reduction in costs is not optional or simply something that will be nice to do if we can get round to it. It is a requirement, and each part of the public sector, whether it is the civil service or a public body, will have to set out how it is going to contribute.

I reassure members that Ivan McKee is monitoring progress weekly and that returns are scrutinised. I am sure that he would be happy to come to the committee and set out some of the detail to provide assurance on those processes—he is keen to talk to the committee about that. Nevertheless, the process has to happen, because the outcomes will mean that we can sustain investment in our public services on the front line.

Yes—it gets harder.