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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 5 May 2021
  6. Current session: 12 May 2021 to 15 July 2025
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Displaying 930 contributions

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Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

We could always move faster, particularly on fair work. I am very conscious of not just the moral imperatives, but the economic imperatives. To have a healthy, thriving economy with an ample supply of skills requires fair work to be embedded in everything that we do. If somebody who is in work is still in poverty, we have a problem, because we are therefore not tackling child poverty, or meeting our objectives on it, and skills interventions are not quite meeting the mark. We could always move faster.

On the fair work side, we are making significant progress on conditionality and ensuring that it is embedded in everything that we do. Public sector grants are an example, with the requirement to pay at least the real living wage. As you will know, we have real limits when it comes to employability law, so we are using things such as conditionality instead.

However, there is another side to this. You said that it is not enough for people to just get into the labour market. The other side is how we help people to get into the labour market, and there is a particular budget point here. I need to say this carefully, but it is very budget intensive to help to prepare people for the labour market who have not participated in it for years, or in some cases decades. As you will know, there is significant investment in our no one left behind scheme for the long-term unemployed, but £20 million probably helps with 2,000 fair work opportunities, and there are more than 2,000 people who need those opportunities. That scheme is financially intensive, for good reasons.

There is a question for all of us about how we prioritise substantial sums of money to try to tackle economic inactivity while recognising that we cannot just leave people once they have participated in a scheme for a year.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

The overall responsibility falls within my budget, but the primary ministers who are responsible are Jamie Hepburn, who is responsible for skills, and Richard Lochhead, who is looking at fair work elements. They work together quite closely.

On budget lines, that is a really good point. I could go through the list, mentioning the national transition training fund, the no one left behind scheme and so on, and tell you about all the different things that the public sector is doing and where I am spending money, but you are asking where employers are spending money—

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

It is really important to understand that, within the budget that we receive, we do not get, for example, a ring-fenced fund for national insurance contributions from the UK Government. We get our overall budget, which has been well scrutinised. The Scottish Fiscal Commission has talked about it being 5.2 per cent down, in real terms, on this year’s budget. We get an overall pot and we allocate the funding within that pot. We have done that—we have identified funding for local authorities and for other parts of the public sector. There has not been specific ring-fenced funding for any part of the public sector.

People cite to me that the national health service is getting additional money for national insurance contributions in Scotland, but that is not true. I provide the health budget. When it comes to responsibility for how that funding is divvied up, it is entirely up to the relevant cabinet secretary, the chief executive and so on to identify how they do that. They have identified funding within that overall pot for national insurance contributions. Any other part of the public sector could do that. Some of the public bodies that we have discussed, such as HIE and VisitScotland, face the same challenge. They, too, will need to manage national insurance contributions, which is essentially an inflationary impact.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

I am suggesting that I cannot tell you how much money has or has not been given for national insurance contributions within the overall budget that we receive from the UK Government, as that does not have a specific line that identifies national insurance contributions. I can only tell you what the overall pot is. I cannot tell you where there has been movement. This is a technical tangent, but that is because this is a spending review year. In normal years, we would get all the identified lines showing where there were rises and falls in budgets. This year, because it is a spending review budget, we just get the overall pot; things are not divvied up.

As part of that, I have sought to protect the local government budget in cash terms—the core budget. Obviously, that is significantly supplemented by funding for social care and education, to name just two areas of pressure that local government has cited.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

That is a hugely important question. There are two parts to that question of measurement: what the agencies do now and what I would like them to do. What they do now is develop performance management frameworks, which are published with the annual business plans and approved by ministers. We monitor the delivery through the agencies’ boards and through regular discussions with me and Ivan McKee. The agencies formally report on progress in the annual report and accounts. That is the sum of their internal and external reporting on performance.

After the economic strategy is published, I would like us to be crystal clear. I will not pre-announce the national strategy, but there are five aims and objectives in it, all of which relate to areas where the Scottish economy has big opportunities or needs to deal with some of the structural challenges. I have already referenced productivity. There is also a big opportunity in some of the new markets—there are new growth and economic opportunities, particularly in energy transition. There are also areas where we have skills challenges, and we need to ensure that we have a skilled population for the jobs that are available. We also have to deal with some of the structural inequalities.

That is a quick overview. The enterprise agencies and other public bodies that have an interest in Scottish economic growth should all be held responsible, as I will be held responsible, for delivering against those objectives. The national strategy will also include a real hard look at the delivery mechanisms. Basically, there will be a ruthless focus on delivering a step change against those five objectives. I have told you how the agencies publish and monitor progress at present.

Ultimately, to go back to what Colin Smyth said—I agree with him in part—the enterprise agencies need to deliver, as I need to deliver and as other public bodies need to deliver when it comes to economic activity and economic prosperity. That is where the accountability should be.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

There is a lot in those questions. I noted the committee’s recommendation that covered some of the points that the member has raised.

The Scottish Government absolutely wants more disaggregated data to be published. We cannot deliver change unless we understand what the problems are, and the problems can be understood only if we have the data. We absolutely need to understand the data.

Some good work has been done. The Scottish Government has paid for or invested in studies and the provision of information on gender disaggregation, but we need to do more. We are planning for how we can capture and publish more information, particularly on gender, for future published analysis of businesses and their employees. I would like to come back to the committee and perhaps take your views on how we can do that as effectively as possible.

We are also working on how we can capture data on women-owned businesses and their participation in public procurement. That is an example of a specific issue.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

I will focus on the young persons guarantee, and Helena Gray, who is attending the meeting, will probably be able to provide a bit more information.

We have allocated funding to the young persons guarantee and I think that it is progressing very well. We are working well with partners and with private and public sector employers to ensure that there are opportunities for young people. In the early parts of the pandemic, we were concerned that there would be a significant impact on young people’s employability. Substantial funding has been made available and the ambitions have not changed. I will not overspeak on that, because I think that Helena Gray can flesh that out.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

I will give the figures again. The investment of £370.5 million for next year is an increase of almost 7 per cent for the enterprise agencies from this year. What I find startling about this conversation is that, in a budget with lots of difficult choices, the enterprise agencies have been protected. I understand the focused scrutiny on the enterprise agencies, but we have already talked about some of the difficult choices that we have had to make. Those difficult choices are largely as a result of where I have prioritised funding. I have prioritised funding for the enterprise agencies and for the Scottish National Investment Bank to deal with and tackle some of the economic challenges. I understand the scrutiny, but the enterprise agencies have received what they need.

My bottom line is that, if the member thinks that the enterprise agencies should receive more than has been allocated, he should tell me where in the portfolio to take it from. There are other areas that are probably facing greater challenges than the enterprise agencies’ budgets are.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

At the moment, the straightforward answer is that we are embedding the programme for government commitment, which is that by the summer of 2022 we will have introduced, for public sector grants, a requirement that companies pay at least the real living wage. The focus right now is very much on fair work.

I am sure that many people would like to see us expand conditionality, but there is a tension, in that having too many requirements and conditions attached would mean quite a lot of hoops for businesses to jump through at a time when we want them to access support to grow and develop.

The situation is less clear cut in relation to net zero—which is not in any way to underplay it. We have had discussions about that with businesses that need support, but at the moment the requirement is about the real living wage.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

I am not conscious of an interim target. I can pause to see whether officials want to correct me. We can get back to you on that.

On mainstreaming, I might have responded to the committee’s recommendation, so forgive me if I repeat myself. We promote use of the co-operative model; it is not just about supporting those who proactively seek support. How do we promote the model, provide advice and information to those who are considering it and provide training in co-operative business skills? If the committee has ideas about alternative models for mainstreaming the activity further, I am open to that. There is probably more that we can do to ensure that we meet the target.

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