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Thank you. There is a huge area of potential questions, some of which I will probably leave for the Cabinet Secretary for Finance and Local Government, who will be here after you.

You spoke about achieving a reduction in workforce, which your fiscal update report notes would require

“a significant departure from recent trends.”

I understand that, since 2019, the public sector workforce in Scotland has increased by 47,100, of which around 20,000 are health and social care workers. How can that reduction be achieved? The Scottish Government is talking about a reduction of 0.5 per cent a year. That does not sound like much, but it amounts to about 12,000 people.

Thank you for that. I should say that in section 4.22 of the fiscal update, on adult disability payment applications, you

“forecast the caseload to rise from 529,000 in 2025-26 to 703,000 in 2030-31”.

In a mere five years, the case load will increase by 174,000—that is about 30-odd per cent. The financial implication is that spending will rise from £3.6 billion in 2025-26 to £5.4 billion in 2030-31. That is a 50 per cent increase over five years, which the committee and the Government will have to take cognisance of.

The last thing that I will ask about before we move to colleagues around the table is capital allocation. Interestingly, the forecast shortfall in resource and capital is not that different—for capital funding, it is about £1 billion-odd over the next financial year or so, which will rise over the next five years to about £2.1 billion, compared to a shortfall of about £2.56 billion for resource spending.

What has the inflationary impact been on the capital budget relative to the allocation over the past five years? My understanding is that the allocation over the past five years has declined while inflation has been about 27 per cent, and that that is the root of the gap.

In paragraphs 5.9 and 5.11 you talk about that issue in relation to social care. That is helpful, as it aligns with the committee’s view.

The issue of national insurance contributions is of significant interest to us. You have said that the UK Government provided £339 million to ameliorate the impact of national insurance contribution increases in the current financial year, and that the gap in terms of what the Scottish Government will have to pay to meet those increases amounts to between £200 million and £400 million—I do not know whether you have any further detail on what the actual sum is. I take it that the £339 million that the UK Government has put in is Barnettised, so that it will be part of the budget as we go forward. Is that correct?

The resource budget is set to grow by about 0.8 per cent a year over the next few years, which Scottish ministers say is somewhat less than the figure of 1.2 per cent across the UK. However, given that the welfare budget is set to increase such that it will be 6 per cent higher as a share of the Scottish budget, would I be right in saying that, as things stand, that means that there will be less for every other department?

Yes, I think that we are aware of that. The issue is around the seven additional social security payments that are available in Scotland and so on.

I know that 58 per cent of people on universal credit work, so your point about low-paid workers is well made. Obviously, when we have to mitigate the impact of UK decisions, whether it is the bedroom tax or the two-child cap, that money is in effect lost to devolved services, because we cannot spend it twice. Has any work been done to look at whether the unilateral abolition of the two-child cap in Scotland will have an impact on, for example, housing benefit for recipients or council tax relief? My understanding is that the Convention of Scottish Local Authorities is saying that there will be an impact.

You will always be criticised, but to govern is to choose. One area in which the Government has chosen to spend a higher proportion of its budget is in welfare. You say on page 45 of the MTFS report that

“Social Security is an investment in the people of Scotland.”

A number of ministers have been saying that for a number of months. What is the return on that investment and what is the opportunity cost of it? In other words, what areas cannot be funded because of decisions that have been taken to introduce additional benefits, for example? The abolition of the two-child cap in Scotland, which is understandable, will cost £194 million by 2029-30.

Because you mentioned the fiscal framework between the Scottish Government and local government, I will ask you a wee bit about that. I was not going to do that, because there are millions of other things to ask about, and I only have another five or six minutes before I have to let the rest of the gang in.

My understanding, from speaking to COSLA earlier this year, is that local government had hoped that that framework would be signed off in February or March of this year, but we have not really heard anything. Where are we with the fiscal framework?

One of the issues with the national performance framework is that, when the programme for government comes out, it does not seem to connect directly to it. That is one issue.

Another issue is that many organisations and the wider population do not really have much understanding of what the national performance framework is. It seems to bubble around in the background, but it is not as prominent as perhaps it was intended to be. Is that a fair comment?

We have all seen ministers stand up in the chamber and say that they will bring out a certain plan, strategy, document, refresh or whatever it happens to be—you name it—in the spring. We then find ourselves in the summer and it has not happened. Such documents never seem to come out, say, a week early; indeed, they are very rarely on time.

From experience, I expect there to be more battening down of the hatches. Ministers are ultimately held to account, but there appears to be a sense of drift across the whole Parliament when that does not happen, which does not help anybody. I just wonder whether there will be a bit more emphasis on ensuring that, when a deadline is set, it is met. After all, it would inspire a lot more confidence not only in the Government but in the Parliament and its institutions.

We will be speaking to the Cabinet Secretary for Finance specifically about the report once we get her response to it, so I am pleased that you have already taken a lot of that on board.

We will now move to questions from colleagues around the table.