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All Official Reports of meetings in the Debating Chamber of the Scottish Parliament.
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Displaying 1661 contributions
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
I suppose that you would not necessarily know how much that transfer was going to be, which would come down to policy decisions. You are right that, on the surface, it looks unnecessarily complex, but the way it works is that the policy area makes the decisions on how much the spend will be—it is responsible for doing that.
You cited the example of education and training. The decision on how to take that forward would have been made in the health and social care portfolio, which has responsibility for that budget line. It is education that would deliver those services, so the funding would be transferred to education to enable it to fund that delivery. If you look through the budget, that is typically the reason for such a scenario. However, we are very transparent about what those transfers are as part of this process.
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
I understand that. As I said, that underspend is about 2 per cent of the total budget. You would run those big capital projects with various issues, be it inflation or timeline slippage. Many factors are involved in large capital projects that can make that margin of difference at the edges, and that is what we are seeing here.
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
Exactly. Are you saying that we should have cut public services to that extent previously?
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
Do you mean in relation to private sector investment?
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
What you have done mid-year is create another £1 billion of spending cuts. You recognise—
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
It is not £1 billion.
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
In the notes that were provided with the review, there is—I hope—some clarification on what those moneys are. For example, paragraph 21 states:
“Within the Net Zero and Energy portfolio £19.6 million of savings outlined in the fiscal statement have been included, the largest of which is the £16 million of additional income in respect of Scottish Water Interest on Voted Loan. The additional £3.6 million relates to reduced forecast on the Zero Waste programme, £1 million of savings from Nature Restoration and £0.1 million relating to Air Quality.”
That provides more granular detail on what is happening with those portfolio adjustments.
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
I think that all portfolios could rightly make the case that they could spend more money very usefully but, of course, we live in constrained fiscal times and there is a budget process that is on-going.
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
You are absolutely right that we want to have more certainty, but the uncertainty around the fiscal settlement from the UK Government has made that problematic. I will take a step back and look at what we want to do with the ScotWind money. The Cabinet Secretary for Finance and Local Government will say more on this, but the intention is to use that funding, wherever possible, to support net zero capital projects, because that is where we see our getting value for that money.
You are right to say that, depending on how we do that, there is scope to leverage in additional private sector investment, which remains our objective. However, because of the uncertainty around consequentials and the pressures on pay, inflation, health spending and the other areas that we have identified, we have had to use that money over the earlier part of this year, to some extent, to help to balance the budget, which, as you know, we need to do.
As we move through the rest of this year and the budget picture becomes clearer—for example, we are not yet sure about the position with national insurance contributions for employers, including those in the public sector, and there are other such examples—our intention is for the ScotWind money to be substantially available for capital investment.
Finance and Public Administration Committee
Meeting date: 12 November 2024
Ivan McKee
I would not make that connection. We can think through the logic of why those transfers happen. As we have explained, it is about policy decisions being made in one portfolio, with a different portfolio doing the delivery. If the funding is put into the delivery portfolio, where the policy decisions have not been made, it probably makes it harder to have control, because the portfolio making the policy decisions is working in a vacuum, to an extent, as the funding is, at that point, somebody else’s money, which the other portfolio is, in effect, spending. If the budget owner—the portfolio that has the budget—is making the decision on what it should be spent on and is considering how it balances its budget and gets maximum effect from that, that is the way to have better control and, therefore, better sustainability. The transfer is simply to execute the delivery of the policy decision, once the extent of the spending has been determined.