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The issue is not about funding having a neutral impact. If a management team is reduced, it will have a difficulty in delivering those services. It might be that some local authorities must retain similar-sized management teams. You would end up with diseconomies of scale. If you transfer some services but, ultimately, you need to leave much the same team behind, you must fund additional staff for the new services. You would surely end up with a more costly and, some might think, more cumbersome delivery.

I am aware of that, and I have also noticed that you are being very careful with your language, in saying that you will “take account” of inflation and look at its prevailing rate. I understand that you are not in charge of the budget, but huge sums of money will be dedicated to setting up the structure of the service, and those who will be in receipt of that money will be looking to see whether it will be hobbled from the start.

Given that this is a flagship policy for the Government, one would have thought that ensuring that it delivered, even against the financial odds that we are currently facing, would be an absolute priority. It alarms me somewhat that, even at this stage, there seems to be no guarantee that that will be the case.

I would appreciate that, minister, but I know that other members, including me and Daniel Johnson, want to ask about co-design. We will be exploring the issue further as the meeting progresses.

The last question is the $64,000 question from some of the people who have given evidence to us, and it refers directly to the financial memorandum. SOLACE said that a lot of the Scottish Government’s response to its concerns has been

“to say either, ‘We’ll cross that bridge when we come to it,’ or, ‘That’s a decision that can be taken locally.’”

It went on to say that

“the proposal is well intentioned, but it does not give us any certainty that we are going to get to something that will deliver consistent care services across Scotland.”—[Official Report, Finance and Public Administration Committee, 25 October 2022; c 42.]

COSLA said that, in its view, the financial memorandum delivers

“an unacceptable lack of clarity.”

When I asked COSLA, CIPFA and SOLACE whether they thought that the financial memorandum should be revisited, each of them said yes. What is your response to that?

Thank you for that opening statement. As is traditional, I will start with some open questions before we move to questions from colleagues.

You began by saying that the bill’s stated purpose is to improve the quality and consistency of social services in Scotland, and it has been the view of everyone throughout the evidence sessions that that is what we want to see. However, why is this particular structure the best way of delivering that? If certain issues are affecting consistency and quality of care in some local authorities, why is that is not being addressed?

The committee has tried to tease out that issue in its questions, but we have not had all the answers that we would have liked. As I asked when Ms Bennett and Ms Bell previously gave evidence, why not name and shame the local authorities that are not stepping up to the mark to deliver the services that they should be delivering instead of creating this new all-encompassing structure?

Obviously, though, if the VAT situation is not resolved, we will have the same situation as with the police and fire services, whereby millions of pounds have been contributed to the Treasury in VAT when it could be much better spent on local services.

One issue that came out in the evidence from your officials was that not all staff may transfer. We are talking about a national service, but some staff may stay with the local authorities and some may move. Is that correct?

One of the difficulties is that, according to COSLA, SOLACE, the Chartered Institute of Public Finance and Accountability and so on, the consultation came out without any prior discussion and, as a result, they were caught on the hop. Moreover, it came out over the summer when they were trying to prioritise recovery from Covid, and they also felt that the consultation period was only the standard one when, with something of such magnitude, they should have been given a lot more time to develop and discuss issues with the Scottish Government and to present more detailed responses.

Only 3 per cent inflation is built into the financial memorandum but, as we know, the rate of inflation is already 10 per cent, and you indicated to the committee this morning that the Scottish Government intends to fully fund the bill and those changes. Will it be fully funded at the prevailing rate of inflation, and what do you think the impact will be on other local government services?

There seems to be a contradiction with the resource spending review that we had in May, because there is going to be a flat financial cash settlement but, with inflation at 10 per cent, that means significant reductions in service delivery and staff numbers, yet we are going to have this service that is apparently going to deliver more effectively for more people. There may be some savings, but initially there will be significant costs in setting up this apparatus. Is the Scottish Government committed to inflation proofing the bill?

Yes, but the current rate of inflation is 10 per cent. The point of my question was whether the bill will be inflation proofed. There is not much point in saying that we will deliver the funding for the bill if, at the end of the day, the reality of inflation is not reflected in that. Inflation was at 6.2 or 6.3 per cent, and it is now 10 per cent. We are already building that in and, as I have mentioned, the Deputy First Minister had to make a difficult decision with regard to the funding of the bill only last week. How can we be sure that we end up with a service that is delivered in the way that the Scottish Government and service users want?

It has been a long session, minister. In time-honoured fashion, though, I will finish up with a couple more questions. I have many—