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It would just save me having to submit a freedom of information request, to be honest.

My final question concerns an issue that arose when we spoke to the Audit Scotland team, and it will lead into the final set of questions, which concern the balance of investments. That is an area that is of interest to me because of my discussions with a number of stakeholders who have engaged with the bank.

The Auditor General’s report states that 92 per cent of investees are small and medium-sized enterprises. On the face of it, that sounds quite positive, but that is not the same as 92 per cent of investments. Can you give me the figures on that latter point? How much money do you invest in small and medium-sized businesses in Scotland?

I raise the issue because, when the Audit Scotland team presented evidence to us on the report, we heard that it had arisen in their feedback sessions with industry. One of the witnesses said:

“I will highlight some feedback from the financial services sector that said that the bank could sometimes take more risks to support scalable businesses, particularly in the tech sector, to improve Scotland’s productivity.”—[Official Report, Public Audit Committee, 28 May 2025; c 12.]

Is that something that you would consider doing?

I can work only with what I have in front of me, and the summary does not go into much detail.

You are right that the approved budget in the “Other” line was £578,000, while the actual spend was £121,000. As you have said, that could be because you have, in year, been able to distribute some of that money elsewhere, but it is quite hard to follow that.

On the obverse, the approved depreciation budget was £430,000, but according to the table, the spend turned out to be nearly £1 million, or 126 per cent over. Again, is that just a case of money being shifted around?

Richard Leonard is welcome to come back in on that point if he wishes.

This is an interesting area. I was under the impression that you have fixed fee rates for external organisations that, if I recall correctly, are subject to reasonably lengthy contracts. The sheer level of the rise in external fees surprised me, though: it is nearly £1.7 million above what was budgeted. Are you saying that that rise has been driven not by understaffing issues in your organisation but by the clients that you manage?

As a side question to that, in our earlier session we talked particularly about some of the costs involved, but I know that it has been a bit of a tough slog for many public organisations to try to bring people back together and get people back into the office. Is there a direction of travel on that for your organisation? Has it stabilised? Are you still trying to encourage people, particularly your auditors, to work face to face more? Has there been any resistance to that?

Good morning. Continuing with this conversation, I note that the panel has talked once or twice about very “robust” budget-setting processes. I might take a slightly different line, based on the table that I have in front of me.

Among the things that concern me most is the high degree of variance between what you have budgeted for and what you have spent in quite a wide range of lines in the budget table that I am looking at. We are not talking about a small margin, either; I appreciate that there is a realm of acceptability when it comes to budget variance, but the numbers vary quite wildly. I will get into a few of them in a moment, but in many, the variance is over the 50 per cent mark. Please do not take this the wrong way, but in what way does that represent a good budgeting process?

That was useful.

Another thing that jumps out at me is that, when you look at the year-on-year variance in what you have spent across two budget years, the margins of variance are a lot lower. You have said that you think historical spend—or historical track record—is a good baseline for working out how much you want to come and ask for in future years. Indeed, if you did that, you would probably come out with a better outcome, because what you spent in 2023-24 was, in many lines, not wildly dissimilar to what you spent in 2024-25, while, in 2024-25, there is a wild variance between what you budgeted for and what you spent. Perhaps you could reflect on that. After all, you will be coming to us with future budget proposals, and there will come a point at which the commission will have to take a view on the amount of faith and trust that we can put in them, having seen the huge variance in what we have in front of us. Of course, that is more of a comment than a question.

In the interests of time, I will look quickly at some of the other big variants that jump out. The first is the “Other” line—that wonderful catch-all that is always at the bottom of a budget table. The variance in that line is 80 per cent, with a £457,000 underspend. What did you budget for in the “Other” line and then not spend?

Thank you very much for that explanation.

I turn to Vicki Bibby with a question about the IT budget, which the report flags up as having produced another quite big variance between what you asked for and what was spent. It says that the approved budget for IT was about £500,000, but at the end of the year the spend was sitting at more than £800,000, which was a 47 per cent jump. How did that variance come about?

That suggests to me that you are looking at the overall number as the centrifugal point of your budget processes. In other words, you seem to be saying, “Let’s make sure the overall number is there, or thereabouts, so the commission doesn’t come back to us and say ‘There’s been a wild underspend or overspend.’” That is fine, but it relies on some budgets naturally coming way under so that you can go way over on others. Indeed, the numbers reflect that.

On the one hand, your total operating expenditure is considerably higher than was budgeted for, while on the other you have had an underspend in people. Perhaps that is just a matter of luck, rather than something planned. If you had spent what you said that you were going to spend on people, you would have been wildly over on opex.

Is it good enough simply to rest on the top-level number? It is important that we do drill into some of these lines.