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The additional spend does not come from one specific revenue stream, so it would not be correct to draw a line between a particular policy on income tax and how that policy is responsible for funding a commitment. Rather, the entirety of the funding position—what we receive from the UK Government through the block grant and what we choose to raise in taxes—supports ministerial decisions on Government policy priorities.

Some of the changes that have led to the £1 billion of additional spend relate to aspects that impact on the whole of the UK and may therefore be dealt with through block grant adjustments, but not all of them.

I draw the committee’s attention to one aspect that I mentioned in my introductory remarks, which is that the Scottish Government intends to spend £1 billion more than we receive from the UK Government in social security block grant adjustments. That is because the Scottish Government has taken decisions that are unique to Scotland. A lot of that is to do with new benefits—for example, the Scottish child payment—but we also have other social security payments, such as the Scottish welfare fund, discretionary housing payments and the spend above block grant adjustments for social security in areas where there are benefits within the UK. One of the most obvious examples of that is our higher spending on the adult disability payment compared to what is spent on the personal independence payment. I believe that the Scottish Fiscal Commission gave evidence on that and the reasons why it may be the case, but much of it is down to the decisions that the Scottish Government has taken on eligibility and our encouraging people to apply for benefits.

The programme business case covers only resource and capital budgets, and it was published in February 2023. The Scottish Government’s draft budget for 2024-25 includes other costs that are not in the programme business case, one example of which is depreciation. That is why a like-for-like comparison is not straightforward. The programme business case sets out forecasts for resource and capital spending of £99 million, although the budget allocation is actually £162.6 million. The difference in those costs is caused by, for example, Scottish Government pay awards, which have increased staffing costs, and the fact that we now have dedicated funding for transition costs, which were not part of the programme business case.

I can ask Stephen Kerr to go into further detail on that, should the member wish.

It is important that we continue to recognise the pressure on household budgets, which is why, since 2022-23, we have continued to allocate around £3 billion a year to policies that tackle poverty and protect people as much as possible.

Spending in 2022-23 reflected a number of aspects that are no longer included in the budget for this year, because of changing circumstances. For example, in 2022-23, we invested in cost of living payments that were worth £150, which the committee will remember.

However, there has been increased spending on other policies, which has meant that the Scottish Government has continued to invest £3 billion a year. This year, in addition to continuing investment, we are setting aside £144 million in the Scottish budget to reach agreement across local government to deliver the council tax freeze

I will give some examples from the £3 billion spending that is forecast for 2024-25. The largest contributors to that include our continuing commitment on concessionary travel; the council tax reduction scheme; free eye examinations and optical vouchers, which are funded by the national health service; the Scottish child payment; and funding for early learning and childcare. There are many more items. We endeavour to provide as much support as we can, given the relatively fixed budget that the Scottish Government has.

I am certainly happy to provide in writing some more information for the committee on what the budget has been for 2023-24 and what is forecast for 2024-25. In my original answer, I gave Mr Dornan information on some of the larger items in that forecast spending for 2024-25, but we can provide the committee with more detail on, for example, free period products, the baby box, the best start foods scheme—which was mentioned earlier, when the committee considered secondary legislation—and other items. We can provide that in writing, rather than having me go through every row just now, convener.

We have had to make very difficult choices to balance the budget this year. Although the fuel insecurity fund is not committed for 2024-25, the further support that we are providing includes maintained investment in national fuel poverty schemes, warmer homes Scotland and area-based schemes, as well as funding in social security benefits.

Over the course of this parliamentary session, we are allocating at least £1.8 billion to heat and energy efficiency measures in support of people who are least able to pay, and we will continue to provide that. However, many of the powers to make a difference at source remain with the United Kingdom Government. It is not the only one, but one of the most obvious calls that we have made to the UK Government is in relation to the importance of a social tariff, which, unfortunately, the UK Government has chosen not to move forward on.

The modelling estimates that, as a result of Scottish Government policies, 90,000 fewer children will be living in relative or absolute poverty this year. Of that number, 50,000 are connected directly to the Scottish child payment, so we can see the difference that the benefit is making.

In the interests of brevity and of preserving my voice, I point to what I said earlier about the Joseph Rowntree Foundation. If universal credit was done right, and if it was fit for purpose and included an essentials guarantee, we would not have to spend that money on the Scottish child payment, or elsewhere.

Our modelling suggests that the payment is making a difference. I am happy to provide more detail in writing about where we are in relation to our targets, but we can certainly prove that the Scottish child payment and our other anti-poverty measures are making a difference.

However, there is no room for complacency, because child poverty rates in Scotland remain too high. That is something that the Scottish Government, and the UK Government, must be cognisant of, as we make policy decisions.

As I said in my opening remarks, the decisions about the affordable housing supply programme have been some of the most difficult that we have had to undertake. We continue working with partners to mitigate the impacts that have led to the construction supply issues, workforce challenges and increased mortgage costs that are having an impact on the deliverability of affordable housing.

We are still investing £556 million from within the budget in affordable housing next year and are undertaking a great deal of work with partners to increase the delivery of affordable homes, the vast majority of which will still be for social rent. That includes supporting the acquisition of existing properties.

On homelessness, I point to the fact that the level 4 figures for homelessness have remained similar to those of the past financial year, so we have protected that investment. However, although we have a good record in delivering affordable homes, the issues with the affordable housing supply programme continue to be among the most challenging areas of the budget.

We still have that target, but, as the Deputy First Minister said when she appeared before the committee, it is at risk. We have arranged a review to ensure that that is looked at. The review is not a review of the target, but of how we can deliver it. It goes much wider than capital budget challenges—although we have those challenges—and considers the impacts on workforce, construction inflation and increased mortgage costs. The review will look at deliverability.

A great deal of work is going on to ensure that we are looking at more innovative finance measures and at boosting investment from the private sector, for example. We want to do everything that we can to bring in further investment not just from the Scottish Government but from elsewhere. There is a continued focus on deliverability to ensure that we are doing everything that we can with the budgets that we are given.

With the greatest respect, Mr Balfour, if the UK Government is slashing the level of financial transactions that we have—which has been one of the key ways in which we have been able to deliver affordable housing—and we are also seeing a real-terms capital budget decrease of 10 per cent over five years, where will that money come from?

If the member is disappointed by the figures for housing, I suggest that there is a genuine challenge when the capital expenditure budget from the UK Government is falling off a cliff. Difficult decisions have had to be made, and the Deputy First Minister has said that affordable housing will be prioritised in the budget should further capital money be found or made available to the Scottish Government. However, with a decreasing budget, increasing construction inflation and the workforce challenges caused by Brexit, there will inevitably be implications for the number of capital programmes that the Scottish Government can undertake.

As we have gone through the budget, we have looked at a number of aspects in terms of their impact on different groups. For example, in its entirety, the cutting of the financial transactions of the Scottish Government by 58 per cent just for next year inevitably has an impact on how much we can do. We look at the topic in the round. It is not about just equality impact assessments; it is about our wider budget and the decisions that are made across different portfolios.

I appreciate that the JRF and others have given their critiques, but our budget decisions are based on fiscal sustainability, legal requirements, contractual obligations and previous commitments, as well as a range of social, economic, political and environmental issues. Those factors sit alongside aspects that involve equality impact assessments. I am happy to provide the committee with information on the analysis that we do to ensure that we deliver the budget in the best possible way.