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Let us look forward to what we want to achieve in your sector, to ensure that there is progress. We have heard about the new relationship that the new UK Government wants to have with the EU: it has been called a “resetting”—words of that nature have been used. Are there areas in which you see some glimmers of hope that there may be progress? Are the discussions still just rhetoric or are there real opportunities for the future?

Good morning. You have already touched on the situation in which councils find themselves with reserves. Your bulletin talks about a 5 per cent decrease in councils’ total usable reserves. Reserves have been used to balance the books in the past, but was 2023-24 a tipping point in reserve trends for many councils? Are any councils in a concerning situation in which they have low levels of reserves or have exhausted the majority of their reserves? How will they manage to sustain things?

You have touched on councils’ ability to do short-term and medium-term financial planning, but there is an issue with long-term financial planning. You have indicated that about half the councils in Scotland do not have long-term financial planning in place. Not being able to foresee what the future holds must be a problem for them—it is very difficult, but they need a flavour of where things are going. How are you encouraging councils to do long-term planning? What would you like councils to do to ensure that they take on board your concerns and attempt—even if it is just an attempt—to get long-term financial planning in place? That might help if anything problematic comes up, because it could be managed. However, if they do not do that planning, they will not be aware of what could happen in the long term.

My final question is about customer and client receipts. In the bulletin, you talk about them being 12 per cent—£253 million—lower in real terms than they were before the pandemic. Is there a reason why that is the case, or do councils have the opportunity to raise income by putting up some of their charges? Has it got to the stage that charges are getting too high? Is there still some room for that to be managed in a way that would get us back to the pre-pandemic position? Alternatively, is it the case that those days have gone, and the councils feel that they can go only so far, because they know that going further might end up having diminishing returns for them, as putting up charges might, at the end of the day, cost them money rather than bringing in income?

At the same time, councils have to consider what receipts they can deal with and the areas in which they can afford to do so, because that is another income stream that would have a knock-on effect in other areas. It would be good to get a flavour of what you think about those issues.

You have also touched on the amount of debt that councils are managing. In the bulletin, you say that councils’ debt stands at almost £20 billion, which is a 15.8 per cent increase on the level of debt in 2022-23. That is a substantial amount of money and a substantial increase. At what point do the levels of debt become unsustainable for councils to manage? Are there any councils that you think are moving towards having a worrying level of debt that causes even more concerns about their ability to provide best value in the communities that they represent?

You did, convener.

When we are trying to manage this process, we are all about the transformation of best value, good practice and value for money, together with the empowerment and engagement that you have talked about.

When it comes to ring-fenced money, that is sometimes allocated as a one-off or a special offer, and the money does not always get used because it might not fit the criteria of the local authority or area. That money sometimes disappears and is not used, which causes a problem for us in providing best value for money. Communities want to engage and to be empowered, but, at times, there seems to be an obstacle. My reading of the situation is that the obstacle is sometimes ring-fenced funding. Certain funding might not tick all the boxes that councils want, so they might have to use a different avenue or route to receive funding. I have seen that cause frustration in councils.

It would be good to hear your views on how we should resolve that situation, because, if we were able to unlock some funding, there would once again be more opportunities and more finance to use for communities’ priorities.

Sarah Paterson, do you want to add anything, or are you content with what has been said?

It appears that the process is disadvantaging institutions and that they are struggling to cope with the parameters that are being set. That must have a massive impact on the students who are trying to go through the processes. My question is for Sai. If the institutions cannot get clarification, it must be even harder for the students to process some of that and come through the minefield that is in front of them in order to progress.

Sai, perhaps we could hear your views on that.

Roy, do you have anything that you want to add?