Seòmar agus comataidhean

I have a technical question that I perhaps should already know the answer to. How is the interest rate set for the national loans fund? I am conscious that, in recent years, it has been less than 1.5 per cent. However, given the expectation of the resource that the Government is going to be drawing from that fund over the coming years, changes to that interest rate could have relatively significant long-term effects. However, I am not clear how that interest rate is set.

Yes, that will be useful.

I have a wider question. You might be aware of some of the evidence that the committee has taken from various stakeholders in recent weeks. As you would expect, absolutely everybody believes that their sector should be prioritised for additional public spending, yet very few are willing to volunteer where that money might come from. Almost no one is willing to volunteer a cut to funding in another area. Some organisations have come to us with revenue-raising proposals—I can commend Unison’s as some of the most specific proposals that I have seen in quite some time. Other organisations simply say, “Well, you can fund the extra spending that we think we need from tax increases.” They tend to be quite vague; they tend to make statements to say, “Oh well, there are more tax powers to be used than are currently being used.”

In part, I interpret that to be due to a lack of familiarity with the data that is currently available on tax and spend in Scotland. For example, a lot of organisations are not particularly familiar with the fact that the ready reckoners on income tax are published every year. Those organisations would struggle if they were to come up with their own proposals on the reform of, for example, LBTT or council tax.

How do you think we can improve the quality of public debate and public knowledge among key stakeholder groups—not necessarily the public at large—about the tax side of the equation at budget time? If we do not do that, we will continue to be stuck in the loop that we have been in for a long time, in which everyone asks for more money and says that it is simply up to the Parliament and the Government to decide where that money comes from. How do we improve the quality of debate about raising revenue?

I apologise for missing your opening statement, Deputy First Minister. Each stage of my journey this morning was delayed by the weather.

You made a comment a moment ago about damage to the housing market. Will the Government or Revenue Scotland be in a position in the coming weeks and months to issue revised projections for LBTT receipts, given the impact of the mini-budget on mortgages?

The live data is useful, but I was asking about the assumptions that the Government might make. If we assume, for the purpose of those projections, that there is no change to LBTT policy, projections of long-term income from that tax will be based on assumptions about the effect on the housing market. I am sure that the data for this month and next will look bad. There is a role for Government in trying to make a long-term assumptions, for planning purposes, about how long that effect will last, because that will affect discussions about LBTT policy.

I have a final question for both of you. Do you think that we have the right funding model? Essentially, we fund all universities on the same basis—on a per student basis. The University of Glasgow has around £1 billion in its reserves while the University of Edinburgh has around £1.8 billion in its unrestricted reserves and about £2.8 billion in total. A number of other universities, such as Glasgow Caledonian University, Abertay University and Edinburgh Napier University, do not have those amounts. Given the monumental pressure on Scottish Government finances at the moment, is it right that all universities are funded on the same basis, or should we expect institutions that have larger reserves than the Scottish Government has to take a bit of money out of their own pockets to help through what will be a very difficult couple of years?

You mentioned that flat cash is unsustainable. The Scottish Government’s settlement for the next couple of years is also a flat cash one. Therefore, it is a question of priorities for the Government.

That is a perfectly compelling case, and you are right in saying that, in the overall picture, substantial sections of those reserves are restricted. The University of Edinburgh has £1 billion of restricted reserve. It has £1.8 billion of unrestricted reserve, though.

Do you accept the principle of what I am saying? When the Scottish Government is under so much financial pressure across the board, particularly given the cost of living pressure on families at the moment, it is a big ask for the university sector to be given a substantial amount of additional money when some organisations in the sector hold in their bank accounts far more than what is available to the Scottish Government in terms of discretionary spend.

Karen, does the SFC do any monitoring of university reserves? Does that come under your remit at all?

I will continue the line of questioning around finances. I accept absolutely the economic and social return on investment in universities. The Scottish Government is currently—quite rightly—under pressure to expand the provision of free school meals, to increase devolved social security payments to something approaching the level of inflation and to keep public sector pay in line with inflation. The Scottish Government is experiencing all those pressures while its settlement is a flat cash settlement for the coming years. At the Finance and Public Administration Committee yesterday, we had eight organisations around the table that collectively asked for billions of pounds in spending, and all of them had good cases to make.

Going back to the questions that I asked the previous panel, how can we justify giving Glasgow and Edinburgh universities large sums of public money when their reserves are considerably larger even than that which the Scottish Government is allowed to hold? The University of Glasgow has £1 billion in its reserve, whereas the Scottish Government’s reserve is capped at £700 million—not that there is anything in it at the moment—and the University of Edinburgh has £1.8 billion in its unrestricted reserve and £2.8 billion in total reserves. The University of Glasgow’s reserve has gone up by about £150 million, according to the latest report, and the University of Edinburgh’s has gone up by about £240 million.

Why should we give Glasgow and Edinburgh universities the same amount of money per student in the period of the spending review? I accept that, in the long term, it is not sustainable or fair to give them less than other universities, but for the period of the spending review, while the Government has flat cash, should we be giving every university the same amount of money per student when some universities have so much down the backs of their own sofas?

I am conscious of the time, so I will be brief. You mentioned the Scottish Government sending a signal to universities about fair work. Are you talking about a soft power, lobbying approach or using SFC conditionality to take a harder approach to forcing change? I am interested in identifying what specific steps the UCU would like to see us try to take.