Chamber and committees

I was going to raise similar questions and ask how confident you are—accepting what Professor Breedon said about everyone else making the same prediction—that inflation will peak at 8.7 per cent in the last quarter of this year. When you read more detail about some of the uncertainties that you point out on the supply side—which we have much less understanding about—realistically, how confident are you? We know that the prediction will probably be wrong, which I fully accept because all these things can be wrong, and Andrew Bailey recently conceded that the fiscal levers that he has to exert control over CPI inflation are fairly limited. It is always uncertain, but how uncertain is it? If I asked you to place a wager of, say, £500 of your own money, how much of that money would you risk? Perhaps that is a better way of putting it.

Thank you for giving such a clear illustration. I think that you are making the point that nobody would choose to start from where we are, as it is an inefficient way to manage the finances.

That leads me on to another issue that I found interesting when I read the spending review document. We are talking about people’s understanding of what is actually going on. I was attracted by the economies of scale that you are looking at getting through, for example, shared services, which to me is an absolutely obvious example of where we could derive value. You mentioned other areas to look at, such as grant management, procurement and the 129 or so public bodies.

That brings me to the point about the public’s understanding. I appreciate that it will be useful to have a conversation with councils about whether we might be able to do this, but I foresee difficulties in that people will not necessarily want a shared service, because they will see that as a loss of control. I agree with your approach of having a conversation, but what further challenges do you foresee? In principle, the approach is useful and good but, given the discussion that we have just had, I foresee that it will immediately throw up comments such as, “Oh, you want to get rid of this?”, even though we are all aware of the huge fiscal constraints.

Do you have any more thoughts on how you will approach that and the timescales involved? My experience is that, even if you get agreement, it always takes longer than you think, it is always more expensive than you think, and the return on investment is never quite what you think, either.

It is there. Okay.

Okay. I will collect £500 from all four of you at the end of the session.

I am not clear about how and where you baked the impact of Brexit into all your forecasts. I assume that you have reflected all the way through your forecasts the hangover from the pandemic and the supply issues that we have talked about, which have reverberated around the world, but I was slightly surprised that there was no mention of Brexit in your report, given that we now know that the impacts are only starting to be felt. I appreciate that it is complex to pin Brexit on one thing, because it is a very fragmented picture, but I was surprised that there was no mention of it. How and where have you baked it into all the numbers?

Is that similar to what you have done with the pandemic? Have you taken the same approach?

Good morning. I am sure that, for people who are watching the committee—I always say that, and everyone laughs and says, “No one ever watches this committee”—the discussion about whether or not there is a black hole is an important, pivotal point, because it is actually predicated on debt. You make the important point that whether or not there is a black hole comes down to actuals, not forecasts. Perhaps the media have tended to use that in a very florid way.

Dr Verne Atrill discovered that

“there is a precise point, a mathematical singularity, which we can measure as the Ratio of GDP/Total Debt, at which an economy stops expanding and begins to contract instead.”

On that point, I simply note that the UK Government is hugely in debt.

That leads me to the fiscal framework, and I want to get some reflections from you. We know that any Government, including the UK Government, will have frequent errors across a wide range of forecasts. The UK Government—unlike the Scottish Government—does not suffer any penalty as such for the forecast that, for example, it will have to repay £817 million in 2024-25. Of course, the UK Government does not then have to repay that in a single year’s cycle; it can repay it over several years and—to go back to my earlier point—it can borrow.

I, too, applaud the fact that the resource spending review has been done; it is a worthwhile exercise. However, it really brings into sharp focus the issues with the fiscal framework, utterly and fundamentally, with regard to what you are being expected to do within limitations that other normal Governments would not have. Therefore, perhaps the discussion is really about that. I would like some further reflections from you on that issue before I move on.

I will pick up on two areas that John Mason already referred to, although I am not entirely sure whether that is a good thing, convener.

The first is the role of women, which is a personal interest of mine. I was reading the “Climate Emergency Skills Action Plan 2020-2025: Key Issues And Priority Actions”—or CESAP. As is the case with many other worthy documents, I find in it mention of women, green jobs, the pay gap, representation and so on. However, in common with the practice of most agencies, women are added to the main strategic document, rather than being worthy of a specific strategy document. That is of particular interest to me, as we start to look at the transition around skills that we can be involved in from the beginning.

Therefore, will you have a specific bespoke strategy for women in your emerging strategy, and do you plan to have one as your climate emergency skills action plan evolves? Before you answer, I will say that, in my opinion, without someone being accountable and responsible, that will continue to be only a bolt-on to the main thrust of the plan.

Before Andrea comes in, it is probably worth your while to note that I asked the same question of the enterprise agencies. They do not have a separate document either, so you will have similar views on that. Only if you have a separate document will you have specific measures of success, or lack of success, and an absolute focus on outcomes.

I would appreciate your thoughts on how, from the start—particularly in relation to the term “just transition”—we are going to address those different areas. I suspect that we might want to pick up on the matter again, given Andrea’s comments about economic contribution. I will bring her in on that, because it is a broad area.

Thank you. I look forward to hearing more about that as part of the reflection process.

I have a slightly different question, which picks up on some of the threads that the convener pursued. I cannot imagine that many members of the public are watching these proceedings, but I am sure that members of various bodies will be doing so. I do not think that the challenges and complexities that exist in aligning budgetary spend with outcomes are generally understood. It is a highly complex and difficult process.

Could you give us a flavour of those areas in which you think that that is difficult to do in practical terms? An example that is often cited is our use—globally, I mean—of the crude measurement, thus far, of GDP, as opposed to wellbeing indices. In reflecting on that at some point in the future, might the Scottish Government look to adopt more forcefully some of the newer, softer measures around wellbeing that have emerged recently, rather than looking only at hard measures such as GDP? I realise that that is a complex question, but I would like to hear your reflections on it.

Do you want to add anything, Andrea?