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Finally, with regard to non-domestic rates, the budget includes £685 million of reliefs. I certainly appreciate that, as do island hospitality businesses in relation to the extremely helpful reliefs for those businesses, with 100 per cent relief up to the amount of £110,000.

Given our earlier discussions, has the Scottish Government done any work on looking at the positive economic impact of reliefs relative to the sector, for example? Obviously, we have had a lot of people lobbying us on that particular issue. I would like to know, not necessarily right now, whether the Scottish Government is looking into how effective those reliefs are in terms of the sustainability and growth of businesses and the overall economic impact.

Thank you very much. I realise how exhausting it must be to have to answer questions for two and a half hours.

Okay, but if you look at page 88, you see that the budget for enterprise—Highlands and Islands Enterprise, innovation, industries, trade and investment, South of Scotland Enterprise and so on—is £348.7 million, which is about 0.6 per cent of the entire Scottish budget. The reason why I am quite confused about the prioritisation that has been involved is that, looking at some of the other figures that the Scottish Government has in its budget, we see that the amount for student support has increased from £925.1 million to £1,484.6 million, which is a 60.4 per cent increase in a single year. That cannae be right, surely, yet that is the amount sitting in the level 3 figures on page 72. The increase in student support alone is almost twice the entire enterprise budget, which is there to help grow the economy.

As you know, one of the things that we discussed with Tom Arthur when he came to discuss the autumn revisions was the budget moving in year. We talked about reductions in the Forestry and Land Scotland budget, and also about Creative Scotland having reductions in its budget in year. Of course, it turned out that, in fact, Creative Scotland was not getting reductions in its spending power in year, because it had £17 million in reserves. I am not sure how much Forestry and Land Scotland had, but it was able to find £6 million in its reserves. I asked Mr Arthur at the time whether the Scottish Government would look across the piece to see how much money all those bodies have in reserve. That is about £131 million in reserves for just two bodies, so there must be hundreds of millions of pounds stashed in all those organisations. Has that work begun? Is there any likelihood that additional resources will be found?

Local authorities and the Scottish Government do not have huge amounts of cash reserves—one or two local authorities might, but most of them are down to their bare bones. Is it appropriate for all those bodies to have the equivalent of up to three months’ revenue held in reserve while, at the same time, front-line services are being squeezed?

One issue that has come to the fore in evidence and in submissions is the impact of the income tax changes. I have in front of me the Scottish Retail Consortium’s submission, which says that the tax changes, which have a marginal rate of some 69.5 per cent—Professor Bell said last week that that is the highest marginal rate in Europe—for people who will be paying the new tax rate at £75,000—make

“it potentially more expensive and challenging for employers in Scotland to attract and retain the specialist and senior talent they need.”

The Scottish Fiscal Commission has said that, on paper, it expects about £144 million to be collected from that £75,000 to £125,140 tax band. However, of that £144 million, it expects about £70 million—nearly half—to be lost to behavioural change. However, in the rate above £125,140, it says that, in reality, only £8 million will be collected out of the £56 million because of behavioural change.

Is there more focus on raising tax from the best-paid people in our society than on broadening the tax base? What message does that send to people outside Scotland about coming to Scotland and about Scotland being a place in which to live, work and invest?

The Scottish tax system is clearly progressive, but it is layered on top of the UK system, with all the anomalies that you have touched on. For example, national insurance is to go down by 2 percentage points to 10 per cent, we have the impact of child benefit withdrawals and the tax-free element of the first £14,800 that is earned is being taken away from some people.

It almost seems as though the Scottish Government is saying, “This is a progressive system and we’re not going to take the UK system into account at all.” It seems as though the Scottish system is just added on top. The Scottish Government does not say, “People in Scotland who earn £X should pay Y per cent in tax.” Are there going to be any attempts to smooth that out? For example, at the moment, people in Scotland who earn £44,000 a year will pay a marginal tax rate of 52 per cent, with the higher rate of national insurance, but if they earn £54,000, they will have a marginal rate of 44 per cent.

That is because you keep increasing the number of staff. If every other cost is fixed and you increase the staff budget—as the Scottish Public Sector Ombudsman has done by £700,000—that will increase the percentage of the budget that goes on staffing.

I suppose that that is fair enough.

Your letter talks about considering whether you

“need to adapt any services/contracts at Holyrood in light of changes to footfall and usage post pandemic to ensure”

operating efficiency.

Why is that process taking so long? I would have thought that such changes would have been implemented long before now.

I notice that property costs have gone up by 13 per cent to just over £9.8 million. What is the reason for that?

Good morning, and welcome to the second meeting in 2024 of the Finance and Public Administration Committee.

The first item on today’s agenda is evidence taking from two panels of witnesses on the Scottish budget 2024-25. First, we will hear from the Scottish Parliamentary Corporate Body on its own budget bid, before taking evidence from the Deputy First Minister and Cabinet Secretary for Finance.

On our first panel of witnesses, Jackson Carlaw, MSP and member of the Scottish Parliamentary Corporate Body, is joined by the following Scottish Parliament officials: David McGill, clerk and chief executive, and Sara Glass, group head of financial governance. I welcome you all to this morning’s meeting, and I intend to allow an hour for this evidence session.

I invite Mr Carlaw to make a short opening statement.