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Yes. It seems to me that the autumn and spring reviews will become increasingly important if the current situation continues.

Ross Greer pointed out that one of the issues with pay policy is the fact that it is considered a floor for negotiation. Is that not because, in effect, the Government decides to make it a floor? What happens every year is that we have this dance whereby the Government ministers stand up in the chamber and say that there is not a single penny left and it is a matter for the employers, whether it is the Convention of Scottish Local Authorities or colleges or whatever. Then, lo and behold, it ends up deciding to hand over a bigger settlement than it might initially have hoped to. The people on the other side of the table are well aware that that is going to happen year in, year out, and we end up with this cycle every year. Is that not the situation that we are in?

But if the Government set a pay policy in the budget and then stuck to its guns for once and did not suddenly find additional funds from somewhere, other than perhaps through consequentials, would it not be in a much better position in terms of the sustainability of the budget?

Good morning, and welcome to the 24th meeting in 2024 of the Finance and Public Administration Committee. I hope that everyone had a good summer recess. Our colleague Ross Greer will be slightly late today—he is held up by public transport.

Before we start, I put on record our thanks to those who attended and participated so actively in our pre-budget scrutiny event in Dundee last week. In particular, I thank participants from the Scottish Youth Parliament, Young Enterprise Scotland, Dundee University Students Association and the Hot Chocolate Trust, all of whom shared their views eloquently with us. I know that members had lively and interesting discussions about young people’s priorities and what would help Scotland to attract them to and retain them in the workforce. We will draw on those discussions as we continue our pre-budget scrutiny, and we will publish a summary note of the discussion at the engagement event in due course.

I also thank Professor Graeme Roy for coming along and participating in our business planning event.

Our first agenda item is an evidence session with the Scottish Fiscal Commission on its “Fiscal Update”, “Forecast Evaluation Report” and “Statement of Data Needs”, which were all published on 27 August, giving everyone on the committee a really exciting weekend wading through those reports.

I welcome to the meeting Professor Graeme Roy, who is the SFC’s chair; Professor Francis Breedon, who is an SFC commissioner; and Claire Murdoch, who is the head of fiscal sustainability and public funding. I intend to allow around 75 minutes for the session. Before we open up to questions from the committee, I invite Professor Roy to make a short statement.

Given the volume of reports, we will try to ca cannie in terms of the questions that we ask.

One of the issues that you emphasised was that of pay. You talked about how, in the public sector, workers in Scotland earn around £2,400 a year more than workers in England, on average, which is £1,500 after taxes. Given that there are 548,000 workers in the public sector in Scotland, that amounts to an additional sum of about £1.3 billion, does it not?

I was going to come on to exactly that issue. I understand that one of the reasons for the differential is the fact that the Scottish Government is trying to boost pay for people at the lowest level. Has any work been done to look at comparative levels across the different jobs that people do in the public sector? I am not convinced that people in Scotland who have higher-paid jobs are paid the same as people in equivalent roles in England are paid—they are probably paid a lot more, I would suggest. I am talking about chief executives of local authorities, health boards and so on.

Do not worry—I will come on to data needs in a wee minute.

I am interested in the sustainability of the growth in the public sector. In Scotland, since the second quarter of 2018, the public sector workforce has grown from 504,300 to 548,200. That is growth of about 44,000, or 8.7 per cent; 25,000 of those people are in the national health service, and I think that we understand the pressures there. In England, there has been even more growth: that workforce has gone from 4.269 million to 4.792 million. That is 523,000 people, or growth of 11.2 per cent.

How sustainable is the continued growth in the public sector workforce, given the level of productivity in the economy at the moment?

I saw a few months back that, since the pandemic, productivity in the NHS has fallen by 25 per cent, which is astonishing. That is an English figure, but I imagine that Scotland will not be significantly different. Is that figure reflected in Scotland?

As John Mason might recall, in session 4, we decided to look at the Barnett formula in some detail. In our naivety, we thought that it would be pretty straightforward, only to find out that how it functions in reality is quite byzantine. Therefore, any transparency that we can get on that is important.

I will touch on your forecast document. You have outlined the issues in great detail in the report, but I would like you to talk about the one area in which there was a significant difference from the original forecast, which is that of income tax receipts, which were some £1,498 million—about 11 per cent—higher than the forecast.

Thank you. I will now open up the session to colleagues, starting with the deputy convener, Michael Marra.

Finally, on the winter fuel payment, if the Government decided that it would pay the winter fuel payment, not only would it have to pay the £140 million to £160 million back next year, if it continued to make the payment, it would have to find £140 million to £160 million next year on top of that, and every other year. We could end up with a situation whereby, over five years, the Government could have to find £700 million to £800 million, and possibly more, from an ageing population.