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Thank you for that.

The Scottish Government and COSLA are operating a partnership approach to provide legal accountability—accountability is one of the issues that you touched on in your opening remarks, Donna. In an update, the minister stated that that was to

“improve the experience of people accessing services by introducing a new structure of national oversight to drive consistency of outcomes while maximising the benefits of reformed local service delivery”,

which would

“provide Scottish Ministers, local authorities and NHS boards with overarching shared accountability for the care system.”

Is that not a recipe for confusion? How will the partnership with local authorities, national health service boards and Scottish ministers relate to the new national board, the exact format of which is still to be decided?

Do you see the national board as being a fairly small but perfectly formed board, such as that of Community Justice Scotland, with perhaps 45 staff members, or as a much more encompassing organisation? We need to have more clarity on costs and staff numbers. Can you share any information on that?

I will let others ask further questions on that.

Table 2 of the new financial memorandum shows costs to the Scottish Administration of between £128 million and £193 million, but it is unclear whether those costs are associated with the establishment of the board.

The new financial memorandum is only nine pages long, whereas the previous one was 28 pages long. It feels as though a wee bit more detail could have been provided.

I appreciate that there is no point in talking about the transfer of local authority workers if that is not going to happen. However, we are keen to get a bit further under the skin of the financial memorandum, because of the bill’s importance from a financial perspective.

I open up the session to committee members, the first of whom to ask questions will be John Mason.

Thank you. I should have said that it is Michelle next, not Michael; so, it is Michelle Thomson to be followed by Michael Marra.

My final question is about timescale. We have seen a one-year delay in the stage 1 process; however, we also see that there is a three-year delay in full implementation of the bill, to 2028-29. That is more than four years away. We will have a stage 1 debate in a few weeks, and then we are gonnae have more than four years before the bill is fully implemented.

It is hard to see why that is the case, given that there has, in fact, been a reduction in what the bill is trying to achieve. We will not see the transfer of 75,000 staff, assets and so on, and we are not going to have 31—or potentially 32—care boards: we will have one national care board.

It almost seems as if there is a lack of a sense of urgency in all this. Is it because there is a lack of resources for delivery? Can you advise us as to why we are seeing such a huge delay in the actual delivery of the bill?

Thank you for that opening statement. I will kick off with a few questions, and then I will let colleagues in from around the table.

One of the key issues with the whole levelling up agenda is the actual volume of cash that has been allocated. When I refer to that agenda, I am also talking about the other funding streams that you mentioned. Colleagues will go into some of those in a bit more depth, but how does the money that has been not only allocated to, but actually spent in, Scotland in the past three years compare to what it would have been had Scotland remained in the European Union?

You talked about an increase in investment, but I did not hear any actual figures for what has been spent in the past three years.

The Institute for Fiscal Studies says that UK departmental budgets in the forthcoming financial year will be less than they were in 2010. That surely does not help that levelling up agenda.

It has to be said that there seems to be quite a plethora of funds. It is about trying to get a grip on where they all are and how much is actually being spent on the ground, as opposed to being allocated.

One area in which there is no dispute is the significant reduction in the amount of capital that will be available to the Scottish Government for the next five years. According to the Scottish Fiscal Commission, it will reduce by up to 20 per cent. The Deputy First Minister has said that, in real terms, it is more likely to reduce by 11 per cent. Whichever of those figures you accept, capital budgets declining surely works against what you are trying to do with levelling up. In Scotland, we are talking about much more of a reduction in capital than money that is being spent on levelling up.

You are right that the resource budget has gone up by above inflation, if we accept the gross domestic product deflator at 1.7 per cent. However, even with that, capital allocation from the UK Government is declining significantly. That is beyond dispute.

You talked initially about inflationary pressures, which is an important issue. As you know, in October 2021, in my area, we were delighted to be awarded £23.7 million for the upgrade of the B714 in North Ayrshire. That will make a significant difference to the North Ayrshire economy and it was welcomed across the board. I and the local MP both supported it, as did all parties in the local authority.

Since then, inflationary pressures have hit that project hard, and the cost has now increased by more than £5 million. When you came to the committee two years ago and I raised the issue of inflation, you said that the matter would be considered in relation to those projects.

My understanding is that the local authority has been advised that it will not get an increase in funding. Only about 10 per cent has been spent so far, because of all the work that has to be done before such projects are started. In effect, the project has seen a £5 million shortfall. If the UK Government wants—as I am sure that it does—such projects to succeed in cases in which the recipients of levelling up funding have no control over costings because of the construction inflation that we are all well aware of, it should surely step up to the plate and provide the additional funding to ensure that those projects are delivered as originally intended.