Seòmar agus comataidhean

Good morning and welcome to the 31st meeting of the Finance and Public Administration Committee in 2024.

The first item on our agenda is an evidence session with the Minister for Public Finance on the draft Budget (Scotland) Act 2024 Amendment Regulations 2024. I intend to allow around 75 minutes for the session.

The minister is joined by two Scottish Government officials: Craig Maidment, senior finance manager, and Claire Hughes, head of corporate reporting. I welcome them to the meeting.

I also welcome to our deliberations members of a delegation from the Tobago House of Assembly, who are in the public gallery. I got married on the island of Tobago, which has very fond memories for me.

I invite the minister to make a short opening statement.

In time-honoured fashion, I will open with some questions before colleagues around the table come in.

My first comment is that the Scottish Government has pointed out that the UK Government’s autumn budget provided £1.433 billion in resource Barnett consequentials. I think committee members will be surprised that that amount is broadly in line with our internal planning assumptions and was already factored into our spending plans. Committee members were not party to any internal planning assumptions. How did the Scottish Government come to the conclusion that that was the amount of money that the UK Government was likely to allocate in Barnett consequentials?

Slightly less than 5 per cent of the health and social care budget is transferring out, but it is only 0.5 per cent for the rest of the budget. It looks out of kilter that such a huge chunk of money is being transferred from health and social care. It looks as if those are political decisions rather than delivery decisions. It seems that the revisions are being skewed each year.

Where are we with capital? We have seen, for example, £89 million from resource being put into capital, and we have seen that money being taken back out. Will you talk us through that a wee bit?

The volume of transfers in the autumn revision is about 2 per cent of the overall budget, which is now more than £60 billion a year. There are very significant changes in some portfolios within that budget; the one that I think is most significant is the transfer of some health and social care to local government. For example, we have seen investment of £257.2 million to support the integration of health and social care and the transfer of £230 million from health and social care to local government for staff providing direct adult social care. There are half a dozen more examples, amounting to some £909 million.

It seems that, every year in the autumn revision, we have a situation in which parts of the health and social care budget are transferred out. For example, we have £57.8 million going from health and social care to education and skills to pay for teaching grants for nursery and midwifery students. There seems to be a difference between where the policy is and where the delivery is. Every year, we ask whether there are any proposals to change that. Given that there is a transfer from health and social care to education every single year, surely it would be more sensible for that money to appear in the education portfolio at the start of the financial year.

I appreciate that, but the committee is a wee bit blind on that. At the time of the previous budget, we were promised a pipeline of capital projects in March of this year. That is now being put back to next year. We cannot really see where the Scottish Government is going and how it is managing to deliver on its objectives around capital, because we are not really able to see what those delivery objectives are. Are you able to enlighten us at all on any aspect of that?

I thank colleagues for their questions.

Agenda item 2 is formal consideration of the motion on the instrument. I invite the minister to move motion S6M-14800.

Motion moved,

That the Finance and Public Administration Committee recommends that the Budget (Scotland) Act 2024 Amendment Regulations 2024 [draft] be approved.—[Ivan McKee]

Motion agreed to.

Because time is against us, and you have another meeting to go to, I will not revisit capital or talk about public sector reform or digitalisation, all of which I had hoped to cover.

However, Jamie Halcro Johnston has provoked me to ask a final question on another issue: the mitigation of UK Westminster welfare cuts. For example, the Scottish Government is currently paying £133.7 million to mitigate welfare cuts, with the imposition of the bedroom tax being the most obvious example in that respect. However, it has decided that it will not continue down the road of funding the winter fuel payment, because that £160 million would have to be found from the national health service, local government, justice and other budgets. Has the Scottish Government taken a decision that it will no longer mitigate any reductions in Westminster spend, or will it continue to look at that on a case-by-case basis? Obviously, that £133.7 million that we are using to mitigate things is also £133.7 million that is not going into devolved areas of spend.

I am not saying that it should be about new things. I think that people are saying that they are concerned that the Scottish Government is paying lip service to the national performance framework, that it is not embedded in what the Government does and that it is not clear, for example, how Government spending or, indeed, priorities align with it.

The fact that the consultation was not all singing and all dancing, as many of the witnesses said that it should have been, and that it was fairly limited in scope made witnesses think that the Scottish Government is not serious about it—it is almost a tick-box exercise. That is a major criticism of where we are at this time.

There was an expression of disappointment among many people who are committed to the national performance framework that they feel that the Government is not as committed as perhaps some of our stakeholders are.

You talked about the importance of the national performance framework with regard to finance, but it is not seen as explicitly or transparently driving financial decisions by Government, nor is it seen as holding organisations to account for spending funding effectively.