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In every conversation that I have had with the SFC, there has certainly been a willingness and I am not concerned about its being reluctant to take action in this area on the basis of ministerial direction. It is just that it has never taken action on it before, so there is a question about what that will look like. I take your point that the ink is not yet dry on the legislation that this is all tied to but, as things develop between now and the start of the financial year, it would be useful if you could share with the committee any further detail on how the SFC will play its role in ensuring that the policy is implemented, given that it is new ground for everyone.

On the process around path to balance, is it the case that, in essence, you are told how much you have to save, or is there a Cabinet-wide discussion about the total deficit and how that can be shared between you? I am trying to understand the extent to which—

12:45

I still feel that I have a patchy understanding of where colleges want to go in terms of that transformation. I agree with you that it is clearly not just Government telling colleges about transformation; every time that I visit a college, the principal, senior management, students and lecturers are all bursting to talk about the new and different ways that they want to do things. I am conscious that when the transformation fund was allocated—there was a gap between the fund being part of the budget and its transfer across to teacher pay—quite a lot of institutions had started developing and, in some cases had completed, plans on how they were going to spend it. I think that it was a pot of money they could bid into, so they were putting together proposals for that.

Have you had any discussions with colleges that you can perhaps share with us now? Obviously, you do not need to get into specifics if those discussions were private, but just to put a bit of colour on this, what do those transformation projects actually look like? What are you looking to see colleges do? Have you had any conversations with them about whether the proposals that were made only a couple of years ago are still relevant and can be taken off the shelf and deployed?

Thank you.

We have discussed previously the point that I want to raise, and I have certainly discussed it with the Cabinet Secretary for Finance and Local Government. It is about the in-year path to balance exercises—the savings that need to be made in-year because we have a relatively fixed budget but still need to achieve balance at the end of the year when things have happened, such as pay deals, inflation and so on.

For quite a while now, I have been concerned that education and health take a disproportionate share of the burden for path to balance. Health makes up nearly half of the budget overall, so it cannot get out of playing a role in path to balance. However, it seems to me that, year on year, education sustains substantial in-year cuts because it is an area where spending is not as fixed as it is in justice, for example. Once money is allocated to justice at the start of the year, it is very hard to stop or reallocate that spend.

I accept and recognise collective responsibility and do not expect you to disclose the details of direct conversations, cabinet secretary, but has path to balance and making sure that in-year savings exercises are shared proportionately across portfolios been a topic of discussion among the Cabinet?

You can get in one last mention of the Liz Truss budget before the meeting ends.

I appreciate the constraints of collective responsibility. I have raised this with the Cabinet Secretary for Finance and Local Government already, and I will raise it with her again because how the process is administered is primarily an issue for that portfolio. I was keen to hear from someone who is at the receiving end of a lot of this about how it feels from the perspective of portfolios that money is being taken from. However, I accept the constraints. Thanks.

I know that it was before you were in post, minister, but a couple of years ago—it might have been as part of the 2022-23 budget—£25 million was initially allocated for colleges and £20 million for universities as a one-off transformation fund. That money was then very quickly—and understandably—reallocated to cover the pay settlement for teachers to resolve the strike action at the time.

The additional money that has been allocated this year is obviously very welcome, but it is not the same as that; it is not badged as a one-off transformation fund. Given that the rationale for that money was a recognition that colleges in particular needed to change their method of delivery, what is your expectation of how colleges will spend that money, particularly on the resource side? Capital has been well covered this morning, but on the resource side, is the expectation that colleges will use the money to plug the leaks or holes that they have, or that they will use the money this year—I hope that it is recurring—in a manner that is similar to the use that was envisaged for the transformation fund?

I absolutely appreciate that. That would be useful.

Finally, the fair work announcement that you mentioned a moment ago to Willie Rennie, was, as you said, warmly welcomed by all the unions in the room. It was an EIS-FELA reception, but representatives from Unite, Unison and the GMB were present, too, and they were very happy about it.

An area that I am interested in—this is not a concern, because I think that this is hugely welcome progress—is how we ensure that this is delivered on the ground. I am conscious that, when the committee previously spoke to the SFC about a lot of these issues, it became clear very quickly that it had never taken enforcement action on fair work before. Only two of the seven criteria were mandatory, and if those two were met by everybody, there was not necessarily any need for enforcement action to be taken.

A lot of the discussion on the bill that was passed yesterday was about the SFC’s ability to enforce the options that it has, particularly in relation to fair work issues. Given that calling money back from an institution will very rarely resolve those issues—if anything, it will make things worse—what are your expectations with regard to the SFC ensuring that all seven of the criteria are met effectively? What do you expect the SFC to do if it becomes aware of an institution that is not doing those things?

In parallel with Bill Kidd’s line of questioning, I am conscious that we do not have anyone here who represents students, but various folk have talked about the efforts that you have made to get feedback from students, which is appreciated. Professor Powell, you have mentioned SRUC’s strategic plan a couple of times. Could you talk us through how the perspective of students was taken into account in developing that plan?