Seòmar agus comataidhean

You touched earlier on improving efficiency in portfolios. You said that you are looking to reduce administration costs by some 20 per cent across the public sector in a managed way. Over what period will that be delivered and, specifically, how will it be delivered?

I appreciate that you need to keep experience.

Thirty years ago, a member on Glasgow City Council suggested that it reduce the number of directors from 21 to 12. The administration scoffed and said that it could not run a city with only 12 directors but, a year later, it reduced them to seven. So, it depends what people actually do.

I have another couple of wee things to touch on. First, there still seems to be an issue between the Scottish Government and the UK Government about the impact of proceeds of crime, in relation to which the block grant has been held back by £4.3 million. Will that issue be resolved soon or will it keep dragging on—because, obviously, that is £4.3 million lost to our budget?

I am tempted to say something, but I will not go on any further. Ross Greer is next.

Scandalous.

Interestingly, the Finance Committee that ran from 2011 to 2016 took evidence from organisations such as Equity, the BBC, Channel 4 and Creative Scotland. However, such organisations do not really respond to calls for evidence from this committee. I think that they just give evidence to the Constitution, Europe, External Affairs and Culture Committee, which then makes recommendations through its own report. However, there is no reason why we cannot speak to them. We are not all philistines.

Incidentally, in Vilnius, Lithuania, there are, within a few hundred yards of each other, an opera house, a concert hall and a third hall, which is being built as we speak. They clearly see that the arts are an opportunity to boost revenue.

In terms of sharing services, a lot of councils already share payroll, council tax collection and roads management. There is an issue with regard to trading standards. There are 250 fewer trading standards officers than there were a few years ago. One of the issues that local government will continually raise with you is that non-statutory services have been hit really hard in recent years and that the room to manoeuvre is limited.

To finish off, I have a question on taxation, which we have not touched on. Professor David Heald, who has often given evidence to the committee in the past, although not recently, has always railed against the chronic state of the UK tax system, which is anything but progressive. He has often shown us a graph. One thinks of income and taxation as a steady line, but in actual fact it is a bit like the skyline in New York, going up and down. We have to work within that framework. However, we still have anomalies in Scotland whereby—I have mentioned this in previous years—the marginal rate of taxation for someone earning £44,000 a year is higher than for someone earning £51,000 because of the interplay between income tax and national insurance.

The medium-term financial strategy mentions two key measures to ensure a strategic approach to tax: The first is

“to improve the operation and performance of the existing tax system”,

and the second is

“Future tax reform to deliver sustainable and growing tax revenues”.

What improvements to the operation and performance of the existing tax system do you have in mind? What future tax reform will deliver those sustainable and growing tax revenues?

There are 55 million people south of the border, and there has been a net influx to Scotland from the rest of the UK. It is important that those people are of working age. However, some areas, such as aerospace, say that the highest rate of tax in Scotland is a deterrent when it comes to attracting the engineers they would like to attract. Incidentally, in Lithuania, where we were last week, the top rate of tax is 32 per cent, as compared with 48 per cent in Scotland. Not every country in Europe has very high rates of personal taxation.

I think that we have given this morning’s discussion a really good go. Your responses have been very helpful to the committee, and I thank you and your officials for coming along.

Are there any final points that you would like to make to the committee before we wind things up?

I understand exactly what you are saying, and I certainly would not argue against that. However, you are talking about prioritisation in portfolios, but there are issues across portfolios. For example, you will be well aware of the issues that are facing the college sector, which have been pointed out to us directly. We know that there is a chronic skills shortage in Scotland and colleges are intrinsic to ensuring that we have the skills that we require. Colleges have suffered a 17 per cent reduction in real terms over the past five years, they have cut staff numbers by 8.7 per cent and they have cut student numbers by 12 per cent. Is reversing some of that not considered to be a priority? If we are genuinely trying to lift people out of poverty, we will not be able to do that simply by increasing their benefits; surely, we have to give them the skills that they need so that they can earn for themselves and their families. Colleges are part of that.

Although I take on board all that you have said about efficiencies in portfolios, will there be any light at the end of the tunnel for the portfolios that have already been squeezed over the past few years? Could they get a settlement that is at least in line with inflation? I would hope that the college sector would get an above-inflation increase if it is to try to deliver on the Scottish Government’s poverty and skills agendas.

A 20 per cent reduction to improve efficiency might reduce the workforce by 20 per cent over five years, which would be 4 per cent a year.

Okay.

Lastly from me, when we met Lithuanian colleagues—parliamentarians and officials—we talked about Lithuania 2050, which is the vision that they are looking to produce. They have a committee of the future, and the questions that they are looking at are: “Where do we want to be our country to be in 2050?”, “How do we ensure that the vision is accepted across the board?”—which, to a large extent, it has been—and “How do we deliver that vision?” Incidentally, Finland has a Committee for the Future, too; in fact, it is the leading European country when it comes to long-term strategic planning and thinking.

I know that, partly because of the way in which the UK budget works et cetera, the Scottish Government tends to have to find its way year on year, but would it look to have a long-term strategic vision for the future? It is certainly important. The way in which they have structured it in Lithuania ensures that civic society, the Government and everyone else are all pulling towards a long-term goal and vision for the country.

We are, of course, a substate, and they are not.