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I cannot provide you directly with information about the specific implications and how that decision has been arrived at. If you would like me to follow up on that, I will be happy to do so.

We have absolutely committed to a target of net zero by 2045. As I touched on earlier, notwithstanding the work that we will do to ensure greater uptake of the funding that will be available in future years, which I have already outlined, it is important to recognise where this sits within the broader work that the Government undertakes across a range of areas to support us in reaching the targets.

Net zero is a clear priority and focus of the Government. The commitment will be matched with action through funding from other areas across Government. This year, we find ourselves in a situation in which there has been lower demand than was forecast; I have set out the action that the Government is taking to support greater uptake of the funds in future years. Clearly, there will be a process of continued learning about how we can ensure that the funds are utilised to the fullest extent. I note that we are facing exceptionally challenging economic circumstances that, of course, impact on public finances, and will impact on the decisions of individual households and businesses, as well.

It was just on what our position is now given what we had anticipated with regard to other income as identified in the budget document published last December.

It very much is a volatile and demand-led area, and it is subject to significant change throughout the financial year. The fact that final costs are heavily dependent on the number of retirees in one financial year means that there is significant uncertainty until the end of the financial year.

Let me give a bit more information for context. Following the 2021-22 spring budget revision, when additional budget was provided, a £30 million underspend was subsequently reported at provisional outturn. That illustrates the uncertainty that we have in accurately forecasting the costs. We expect to see further volatility, with a higher than anticipated number of retirees in the current year, so further budget may be required as part of the spring budget revision to fully fund the position. The picture from previous years and that we are seeing in-year is demand led and volatile, which is why we manage it through the budget revision process.

It is specific to our in-year situation. As you will appreciate, no new in-year funding was announced in the chancellor’s autumn statement, so we still face a significant challenge in managing the various pressures that we have discussed. We still have a third of the financial year to run, so we are seeking flexibility whereby we would be able to reclassify capital as resource in order to support the in-year position. Do you want to add anything, Niall?

Thank you very much, convener, and good morning to the committee.

The autumn budget revision provides the first of two opportunities to formally amend the Scottish budget for 2022-23 and contains the usual four categories of changes. The funding changes increase the budget by £691.5 million. The changes include £290 million of cost of living measures that the Cabinet Secretary for Finance and the Economy outlined as part of stage 3 of the Scottish budget in March.

The technical adjustments relate primarily to international financial reporting standard 16 adjustments. They are essentially budget neutral and do not impact the spending power of the Scottish Government. They have a net positive impact of £106.5 million on the overall aggregate position. It is necessary to reflect those adjustments to ensure that the budget is consistent with the accounting requirements and with the final outturn that will be reported in our annual accounts.

Whitehall transfers total £7.9 million, and the final part of the budget revision concerns the transfer of funds within and between portfolios to better align the budgets with profiled spend. The supporting document on the autumn budget revision and a finance update prepared by my officials provide background on the net changes.

Of the total funding that we have received, £94 million is not allocated in the budget revision. However, that funding is being held against a number of commitments embedded in our financial forecasts. The Deputy First Minister made it clear in the emergency budget review that we still face a number of budgetary challenges this year. That funding is being held as a necessary step to ensure that we can balance the inflationary pressures on our budget within the constraints that we face.

The finance update provides further detail of the effect of the EBR on our budget process and the wider fiscal context in which we have to operate.

I will conclude there, convener. I am happy to answer any questions that the committee has.

Clearly, there is a huge degree of volatility and uncertainty. I would highlight, for example, the Ukraine resettlement. Again, there is uncertainty about where we will land there: it could be in the region of £200 million. Given the overall set of inflationary pressures that we face and the uncertainty on where we will finally land regarding the total cost of public sector pay—more than £700 million has already been allocated to that through the EBR—there is a great degree of uncertainty. I touched on pensions earlier and the potential need to revisit that in the spring budget revision. There remains a significant amount of uncertainty in our position.

There is commentary as well, preceding the tables.

Given the circumstances that we face, we are seeking that flexibility from the United Kingdom Government.