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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 20 June 2025
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Displaying 1169 contributions

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Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

As far as flexibility towards local government is concerned, that forms part of the process of supporting public sector pay. As you will be aware, £120 million of capital funding was provided to local government to fund capital expenditure and, ultimately, that funding is deployed at councils’ discretion. The capital grant accounting flexibilities reflected in the statutory guidance permit local authorities to replace existing revenue reserves that they have allocated to capital investment with the capital grant in the context, as I have said, of supporting public sector pay. The new capital grant will fund the planned capital expenditure that would have been met from earmarked revenue reserves, enabling the release of those revenue reserves to meet the pay award.

Statutory guidance is required to address a restriction that requires a transfer of capital grant to a specific statutory reserve within local authority accounts. The relaxation of that restriction widens the permitted use of the grant to meet the principal element of the loan repayments, which are capital in nature.

That was with regard to the £120 million of capital funding that was confirmed for local government. I think that that was set out in the letter of 7 September to the committee, and it is how that capital is being used to support local government pay offers.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

The ABR is retrospective in nature, so it is just confirming the transfer of that funding.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

What is there is consistent with previous announcements.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

That money is allocated for the debt advice levy in the social justice line.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

We want that resource to be deployed in the most effective and impactful way. Ultimately, however, the scheme is demand-led, so the key issue that has been addressed is the shortfall in demand. I accept and recognise that there has been a shortfall in demand, which is why, as I have set out, the Government has taken action to address it. I am sure that that Parliament and the lead committee—the Net Zero, Energy and Transport Committee—will take a keen interest in that, because it is clearly in all our interests to ensure that resource that is made available to support the transition to net zero is fully utilised. That is something on which we can learn from the experience of this year, and we are doing so through the action that we are taking to support greater uptake.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

I think that the figure that you highlighted was for the United Kingdom as a whole. That speaks to the scale of the issue that you raise, to the fact that it is not a Scotland-specific phenomenon and to its perhaps not being directly related to availability of support. Clearly, as a consequence of the pandemic and having reflected on that experience, people will have made different decisions about, for example, their life choices. All Governments are engaged in addressing economic inactivity.

I touched on the fact that, throughout the emergency budget review process and the ABR process, which reflects some of that, we have been focused on ensuring that we provide support in the here and now directly to those who most need it. That is being done in the context of challenging fiscal circumstances and the limitations of the fiscal framework within which we operate.

The other broad point that I would make—it is one that the convener recognised—is that, notwithstanding the level of economic inactivity, we are experiencing an incredibly tight labour market. I accept that some early evidence suggests that that is changing, but one of our challenges is that there are labour shortages in a range of sectors. That, again, is part of the broader circumstances in which we find ourselves.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

We have sought to engage with the UK Government on the ability to reclassify capital to resource because of the circumstances, but we have not yet had agreement from the UK Government on that.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

As you identify from the document, the net change is £1.3 million. The additional £22 million was a targeted carry-forward from the reserve at the start of the year. With updated information, we can see that the demand is not what was originally predicted, which is why the return is taking place.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

It is a question of what policy area the fund supports and what policy area delivers it. You gave the example of £64 million for nursing and midwifery. Clearly, that contributes towards outcomes in the health portfolio, but it is delivered through the education portfolio. Another example that I am sure you will have identified is the transfer around free school meals and the provision of summer activities, which sit within the education and skills portfolio but are delivered through local government.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

I refer the committee to annex A of the supporting document, which sets out the funding envelope and sources of funding.