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Thank you very much. That has concluded questions from the committee. Are there any points you wish to make? Is there anything that you feel we should know that we do not already?

Thank you very much for that—and for your attendance today, which we really appreciate.

We will have a short break to allow for a changeover of witnesses.

I understand that the devolved Administrations were not advised of the change of date, let alone consulted. You have excellent relationships with other devolved Administrations, such as the Welsh Government. What advantages might that provide to the Scottish Fiscal Commission in the work that you will do if you are appointed?

Of course, we are all assuming that productivity is not going to somehow leap forward in the next few years but, if it did, that would certainly make a big difference.

One of the things that you have talked about in your update is the need for clear budget information to aid scrutiny. The Scottish Government is taking some steps towards that, no doubt because of the relentless nagging by you and the committee. Can you talk us through what you feel has been done that has been positive in terms of transparency, and what more the Government needs to do to further increase transparency?

Yes, it is reductions to disability payments and so on that have been reversed.

I have one final point on social security, although it is not all about that. On page 10 of the fiscal sustainability delivery plan, you say:

“Social Security Scotland will continue to pursue initiatives which increase its ability to tackle fraud and error where it does occur, including the recovery of overpayments. Fraud is often carried out by sophisticated and dynamic criminal actors.”

However, a number of members of the committee were concerned by a piece that appeared in The Scotsman a few weeks ago, in which the Cabinet Secretary for Social Justice said that the Government would not pursue overpayments and indeed money that was fraudulently claimed. The figure of £36 million was mentioned. Alarm bells rang for many of us, I think. Can you clarify the Scottish Government’s position? If it is accurate, that statement seems to contradict what is being said in the fiscal sustainability delivery plan.

If I may stop you there, that work is having good results, but those organisations are also struggling to get additional funding from the Government. For example, on page 62 of the MTFS, it says that employability support has been provided for almost 72,000 people between April 2022 and September 2024. I am a big supporter of employability measures, because, frankly, having a job is the best way out of poverty. The more economically inactive people we can get into work, the better, and we need to understand that more than 100,000 economically inactive people actually want to work.

However, there is no information on the success rate of those measures—whether it is 5, 10 or 30 per cent—which projects work, what does not work, and how we can replicate successful projects and discontinue spend on unsuccessful projects. With regard to fiscal sustainability, you can sometimes get the best of all worlds if you invest efficiently and effectively in projects that have been proven to deliver. There are remarkably successful projects in my area, which Tom Arthur visited just a few months ago, when he was the Minister for Employment and Investment. However, there are issues with regard to whether the local authority, which is the primary funder of those projects, is able to sustain that funding.

It is about outcomes and whether there is an increase in dependency culture. Social security assistance is increasing from £6.8 billion to £8.8 billion, so that is £2 billion that is not being spent on other programmes. My understanding is that local authorities are having to reduce non-statutory expenditure, which includes a lot of the things that would work to help reduce poverty. For example, in education, school assistants, community workers, youth workers and campus cops are all having to fall by the wayside. I believe that all members got an email saying that 61 per cent of 240 organisations said that they would have to either close or reduce their workforce. One very prominent third sector organisation in my area that helps people through debt advice, support for rent and advice on alcohol and gambling is having to reduce its workforce by 40 per cent.

Although money is going into poverty reduction, that can look two-dimensional compared with the big picture. If the money went to other organisations, that might help people get into employment, for example, or it might help them educationally or with debt and other difficulties. Is there not an issue with focusing on benefits? Of course, we are well aware that people need benefits, but the additional funding that has gone into that is in effect not available for other areas.

If areas are being prioritised, there must be areas that are not being prioritised. Are there specific areas in any particular portfolio that are no longer being prioritised? Will you give an example?

Thank you for that helpful opening statement. One of the things that you said was that spending choices are being made where they have the greatest impact. On page 59 of the medium-term financial strategy, you say:

“Considerable work has been undertaken since the 2023 MTFS to ensure public finances are focused on delivering the Scottish Government’s priorities, underpinned by public sector reform. Actions across the 2024-25 and 2025-26 Programmes for Governments and associated Scottish Budgets have streamlined commitments and prioritised spending, while ensuring a balanced budget each year.”

Given the emphasis on choice and prioritisation, what areas have been deprioritised?

Thank you very much. Let us switch to the capital spending outlook. It is of great concern to me and, I am sure, to others that, since the pandemic, we have had 27 per cent inflation in construction materials, which is quite shocking, coupled with a 4.3 per cent real-terms reduction in the UK capital block grant over the period 2022-23 to 2024-25. Clearly, that dramatically reduces the Scottish Government’s ability to invest in infrastructure, whether it is new infrastructure, maintenance or on-going projects, and it is leading to a backlog in maintenance across the public sector. I understand that there will be a 1.8 per cent real-terms reduction to 2030 as we move on.

We have been waiting with bated breath for a while now, but we are going to get the capital pipeline in December. What are the implications for the Scottish budget and capital investment as we go forward?