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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 4 May 2021
  6. Current session: 13 May 2021 to 11 September 2025
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Displaying 1237 contributions

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Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Liz Smith

Let me return to the issue of forecasting by the OBR and the SFC. What you have set out for us is extremely important not only for determining some of the issues within fiscal frameworks but in relation to setting budgets. We have had the OBR and the SFC in front of this committee—they were extremely professional in both cases, I have to say. Is there statistical evidence, within recent trends of the forecasting of the OBR and the SFC, or particular data that shows a greater issue of error or volatility, or is it just the overall predictions that provide some problems for us?

Finance and Public Administration Committee

Scottish Fiscal Framework: Value Added Tax Assignment

Meeting date: 14 November 2023

Liz Smith

Is it not the case, convener, that previous finance committees have come to exactly the same conclusion that we have, which is that there are strong reasons for this being so complex and difficult and that the practicalities are just too great?

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Liz Smith

When you say that it has got a lot worse, is it that the trends of that forecasting have got worse, or is there just extra volatility in the earnings that is very difficult to predict? I am asking whether there is a problem with the statistics that we are using and, therefore, a difficulty for the OBR and the SFC in interpreting that data or whether something else is causing a problem.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Liz Smith

Thank you. That is very helpful.

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Liz Smith

That is very helpful. I think that the committee would agree with the statement that forecasting is an inexact science. Obviously, we have to accept that. However, is there anything that we can do through budget analysis and fiscal framework analysis to ensure that the forecasting error is minimal?

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Liz Smith

The Financial Times contained an interesting article about this a couple of weeks ago. The presentation of the data is making life very hard for the OBR and the SFC. That matters to us big time because the data is absolutely crucial not only for informing us what the current economic picture is but for informing the Government when it sets policy. Can we do anything else to help to reduce the forecasting error, which obviously has created difficulties between the OBR and the SFC, certainly over the past few years?

Finance and Public Administration Committee

Scottish Fiscal Framework: Independent Report and Review

Meeting date: 14 November 2023

Liz Smith

That hits the nail on the head. In Scotland, forecasting is a difficult job because the SFC is having to deal with two forecasts rather than just one.

If we accept that there will be a degree of forecast error, we have to play that into the system. Do you know whether, when the OBR and the SFC are looking back at the predictions that they made and how things turned out in practice, there is a lot of co-operation between the two in order to assess where some of the forecast error came in? In your opinion, is that well documented?

10:45  

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 7 November 2023

Liz Smith

Yes.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 7 November 2023

Liz Smith

Minister, you rightly mentioned in your opening statement how the uplift in the teachers’ pay settlement is a very important and understandable commitment in the financial landscape that you have to deal with. For clarification, do the figures in the table in section A.2.1 in the guide to the autumn budget revision—the section entitled “Gross Funding Changes”—relate to the 2022-23 budget commitments?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 7 November 2023

Liz Smith

Yes, indeed. Overall, we welcome that commitment, but you are right that it has led to some very difficult decisions, with the potential for more difficult decisions coming down the line on commitments in future budgets. Obviously, this is a very large part of the budgetary negotiations. Do you feel that that pressure will be there for the foreseeable future?