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I was quite struck by the session that you had with the Scottish Fiscal Commission, which laid out in relation to the use of ScotWind funding the severe limitations on us and the lack of levers, which mean that we are not able to smooth out the peaks and troughs of funding. As things stand, we are reliant on the peaks and troughs of the UK spending review; 2027-28 is a trough and it will be challenging. We do not have the levers to smooth that out, other than by being able to deploy ScotWind. Without that, we would be looking at resource reductions to allow us to plan.

On your point about negative reconciliations, yes, we can borrow to cover those, as long as they are within a certain limit. The modifications that were made around the edges of those powers in the previous fiscal framework review are not unwelcome, but it was so limited in nature. Like the other devolved Administrations—the Welsh are saying exactly the same—we need more flexibility and additional levers to be able to borrow to smooth out. We are limited in that at the moment, which is why I have been trying to get the Chief Secretary to the Treasury on to a page where we agree a more ambitious review and work out its terms.

The time is right. After many years of limitations, we now know what the issues are. The time is absolutely right for a more ambitious review.

Social Security Scotland has been doing some analysis on that. Initially, a lot of existing cases were transferred, and we might now be getting into a different phase of ADP applications. Social Security Scotland has been looking at the reasons for the change, and the report by the chief social work adviser that has just been published or is just about to be published attempts to shed some light on that.

Overall, if we compare what was set out in the MTFS with the current predictions for social security spending up until 2029-30, we see that the figures are quite significantly down. One of the reasons for that relates to UK Government changes to benefits and its decision on the two-child cap. The reduction helps with fiscal sustainability, which we discussed earlier. The removal of a few hundred million pounds makes the path a bit easier, which is to be welcomed.

We have debated that issue numerous times. We are clear that our investment in social security is good for our country, for our people and for the economy, because people tend to spend their money locally, as we have talked about previously.

I am just making the point that the position has narrowed compared with what was set out in the MTFS. Some of that narrowing is primarily down to UK Government decisions, but some interesting information on applications is emerging. I am sure that Social Security Scotland will look in some detail at why there has been a fall in the number of successful applications. As I said, I think that the initial cases that were transferred involved very few changes to entitlement, but the new cases that are being dealt with might well be different. I am sure that Social Security Scotland could provide additional information on that.

Yes, potentially. That is interesting, and, again, we could provide information on this to the committee. The devolved Administrations undertook some analysis on the assumptions that the Treasury makes about the risk of exposure when borrowing, for example. Treasury assumptions are always for the maximum level of risk and volatility, yet we would never make such decisions. However, due to those assumptions, the Treasury’s approach is that we cannot have additional flexibilities and powers because that would affect UK Government borrowing and, in essence, distort or put additional risk into its plans and planning.

However, we have had a very interesting debate with the Treasury about its assumptions being at the worst-case end, when no Government would do something at that level of risk. The Treasury has been assuming a high level of risk, but the devolved Administrations said that, actually, we would take decisions at a lower level of risk. There is much less risk involved than the Treasury has been assuming. We thought that that might be a way in to those additional flexibilities, particularly at the end of the financial year, but, so far, we have not managed to persuade the Treasury. Jennie Barugh has been closer to the detail, so perhaps she can add to that.

Richard, do you want to come in on this?

I accept that, because all the things that we have talked about previously—pressures, demographics and pay—require all our public services to transform the way in which they do things to meet those challenges. Local government is no exception to that.

One of the reasons why I have protected the general revenue grant and the £253 million is that local government will say that, in order to transform and do things differently, it needs maximum flexibility rather than ring-fenced funds. We have baselined a lot of funding to remove ring fencing, and we have put that money into general revenue to give maximum flexibility.

We have to have conversations about shared services, and some parts of local government are already having those conversations. We are looking at corporate services, sharing services and the removal of boundaries across the public sector. We talked earlier about public bodies and how there will be fewer of them and they will look different.

Local government also needs to look at how it delivers its services. The three Ayrshire councils are in advanced discussions about how they can share more services, particularly some back-office functions. I am hopeful that other local authorities will likewise look at how they can work beyond the boundaries of their constituent parts.

We also need to look at digital roll-out in local government. Again, some local authorities are quite far down the road on automation and the way in which the public access services, but others are not so much.

I am well aware of the issues that you are referring to. First, as you have alluded to, all roads lead to the Home Office on that issue in relation to the policy—

From analysis of the tackling child poverty delivery plans, we know that the policy that has resulted in the biggest move towards meeting our statutory targets on child poverty is the Scottish child payment—it has resulted in the biggest shift by a country mile.

The reason why Scotland is the only part of the UK where child poverty rates are falling is, primarily, the Scottish child payment. That is why we are increasing the payment by inflation, and we are focusing on the under-ones because we know that there are additional costs for them.

The chief economist did an analysis of benefit spend in local communities, which I am sure I have referred to previously. There is an economic impact on local shops and services in communities, because people tend to spend locally.

A lot of rigorous work has been done to find out which of the employability programmes work. It can take a while for someone who is particularly far from the labour market to get into work, and there is sometimes a higher drop-out rate because of the challenges.

We are focusing on wraparound support or what the First Minister calls whole-family support. That includes support for employability not just in relation to skills and training but in relation to childcare and transport. What are the barriers that prevent someone from successfully getting a job and then maintaining that job, particularly in the first few months? We are trying to provide more bespoke support.

The programme that the colleges will run will be a really good addition. Colleges Scotland provided a very impressive and persuasive proposal for supporting people back into work. Some people will find a college a less intimidating environment in which to take steps back into work. Over and above the £70 million of funding, £8 million is being provided to colleges to deliver that programme, which will be analysed and evaluated.

A lot of work is being done in this space, and it is important to keep it all under review so that we know what is working best and what is perhaps not working so well.

We do. One reason why I referred to the average figure of £480 for those in the bottom half of the income spread is that that figure includes social security support as well as the benefit of lower income tax.

However, you are right to point to people in Scotland having lower water and council tax bills. Earlier, we talked about the position on council tax, but council tax for an average band D property in Scotland is still markedly lower than it would be south of the border. Therefore, we have to look at things in the round.

In addition, if you have kids at university, you know the difference—my goodness. South of the border, people are now paying more than £10,000 in tuition fees.

Oh, I slightly exaggerated—families have to pay almost £10,000 for each child. That is not the case in Scotland. That is part of the social contract.

We need to consider things in the round. I see parties proposing that we embark on billions of pounds of tax cuts without having any plan for where the money will come from. The money has to come from somewhere, and it has to come from somewhere from 1 April. It cannot be something that might happen further down the line; parties need to set out in black and white where the money will come from. Such proposals have been short in coming.