Seòmar agus comataidhean

Some of your recent analysis highlighted the fact that there are issues in relation to tax revenues from the north-east and the fact that some parts of the labour market there may change as a result of the just transition and changes in the structure of the economy.

Is it within your ability to set out where you think the greatest impact of the changes to tax revenues might be in the future, or is that something that you would let the Government do? I see tax revenues as absolutely critical. You have said in several consecutive reports that tax revenue is absolutely critical to how well the Scottish economy can perform. I would like to know how easy it is for a Government to set policy on the basis of your interpretation of that.

I absolutely understand that, but if we are to set effective policies it is helpful to know not only where the negative concerns are but where the potential for growth is. For several years now, your reports have highlighted tax revenue as being absolutely critical.

You have highlighted this morning, as well as within your report, that there are different factors to inflation. One is the cost push angle. Global prices, particularly in the energy market and in supply chains, are clearly causing very significant cost push. There is also the demand pull side. We are obviously hoping that demand within the economy and an eventual increase in earnings will drive that up. Are there different timescales in which the inflation effect will start to diminish? Is it different for the cost push and the demand pull? What is the likely scenario for when we will start to see inflation tailing off? Will that be largely because of cost push or demand pull?

We might hold you to that.

You mentioned Covid spending in answer to Mr Mason. Can you or one of your officials confirm that Covid spend from the UK Government was £8.6 billion for 2020-21 and £7.1 billion for 2021-22?

That would be very helpful. Thank you.

Let me put it another way. What statistics have you used to make the projections and policy choices that you have set out to the committee?

However, you have to make choices in relation to where you think the Scottish economy can improve. You have to think about the receipts that you will get from tax revenues and from other areas of expenditure, and about where cutbacks have to be made. You have spelled out some of the cutbacks. What information can you give to the universities sector that proves that it deserves what will probably be an 8 per cent real-terms cut over the period that is covered by the financial strategy?

Okay. I will make the same point from a slightly different angle. When you set out the national strategy for economic transformation, universities were said to be

“integral to the realisation of the national economic transformation strategy”,

because they play such a vital role when it comes to developing research and development, and innovation. Why are you cutting universities’ budgets in real terms, given that they have a considerable influence on economic growth and ensuring that we are developing research and development?

If that is true, does that imply that, when it comes to accountability and measuring achievement of the outcomes, the Scottish Government has to allow the measurement and the ambitions to be developed much more from a local perspective? Some people have used the word “prescriptive” to describe the 11 outcomes that are on the diagram.

People feel that their local communities can do things in their own way with considerable effectiveness, without having to worry too much about what the national performance framework says. I have some sympathy for that, because I have certainly seen examples of good practice that has been informed not by the national performance framework but by what works for a local community.

Last week, we debated community wealth in Parliament, and we have had the levelling-up agenda. In principle, both of them are good things, even if we might debate aspects of how they are run. What I am getting at with this dilemma is that many local communities across Scotland feel that they have an awful lot of ambition, talent and resources that they can best use if they are the decision makers, rather than having to apply themselves always to a national performance framework. That is the issue.

I will cite comments from the Wise Group, which has done fantastic work. Its point was that, although the national performance framework’s principles are extremely important, if the organisation is doing its job properly, it does not need the national performance framework to tell it what to do. It feels that it has enough examples of really good practice—of collaborative work with the third sector, local government and the private sector, I may say—that is helping to achieve national performance outcomes, but it does not need the NPF to get those outcomes in the first place because, if it is doing its job properly, the outcomes will be there. Given that observation, do we need to be slightly less prescriptive about the national performance framework so that people buy into its principles but we do not have to set too many parameters about how it is delivered?

You said something interesting when you said that, if you felt that people were not performing as well as they should be, the accountability level might be raised slightly, so that there were sticks rather than carrots to get them to perform better. Is the Scottish Government seriously considering that?