Chamber and committees

You are carrying considerable risks. As a new member, I am not sure whether that is commonly understood.

I would like to move on to the medium-term financial strategy, in which you highlight a number of risks. One of those is the risk of

“Fundamental changes to the operation of finance in devolved policy making as a result of the UK Internal Market Act”.

Earlier, we heard from the Scottish Parliamentary Corporate Body, which has made provision for the scrutiny of changes triggered by that by creating an additional 21 jobs. That has a real cost implication, which the SPCB has done projections on.

Have you quantified that risk, beyond what is in your report? You have highlighted the risk, but what is the probability of its occurrence and what would be the implications if it occurs? It strikes me that the financial implications—from the point of view of real spend and of risk—are not yet sufficiently understood. Can you add some further colour to that?

Good morning, everybody. Thank you for the fulsome information—[Inaudible.].

I want to go back a bit and get a better understanding of the breakdown of the additional resource implications, which the convener probed earlier. You have described how the additional Brexit resource cost has gone down as we have moved out of the transition. However, I want to better understand your forecasting for the additional costs in terms of the full-time equivalent head count and the costs that have been triggered by the United Kingdom Internal Market Act 2020. In particular, I would like to hear about some of the funds that are being spent directly in Scotland by the UK Government. Perhaps you allude to that in your submission when you talk about

“where the UK Government makes decisions which have a direct impact on devolved areas.”

What specific additional head count, whether triggered by the internal market act or any additional funds, such as the levelling-up fund, have you forecast in your budget for this year? I am not sure whether that is a question for Jackson or David.

It looks as though there are no takers.

I have one more question, which follows on from the point about risks. You correctly highlighted some of the implications around resource funding and for capital funding for the future—in particular, the risks to the national infrastructure mission for local and regional infrastructure.

From a risk perspective, that links directly with economic growth, and productivity is also thrown into the pot. Have you had a chance to give any more flavour to that risk, where there is direct investment by the UK Government in local and regional infrastructure? You might not have had such a chance—my question is simply on the back of the previous discussion in which we were focusing on resource.

That seems ridiculous. That concludes my questions, convener.

Good morning. I am finding this evidence session very enjoyable so far, and I thank the cabinet secretary for highlighting the complexity of the process of money being allocated, drawn down and spent, and how that expands from one financial year to the next. Of course, that is all about financial asymmetry, but I also want to explore our own asymmetry.

I had the chance to glance through the report by the three Davids entitled “Options for reforming the devolved fiscal frameworks post-pandemic”, which recommends:

“Given that devolved governments cannot really exercise full control over health policy in the absence of appropriate economic support measures, a feasibility study into making furlough-type support available on a geographical basis should be urgently undertaken and published.”

You also correctly alluded to the fact that things have moved rapidly since some of the recent data came out. Do you have any indication yet of UK Treasury thinking about what type of financial support, such as furlough, could be available if and when the anticipated peak of the current Covid crisis hits us in mid-January?

Could Keith Ridgway and Iain Bomphray answer the question, too?

Good morning to the panel. I will change the focus a little andf talk about finance. This morning, we had more bad news about the consumer prices index. Inflation has risen by 5.1 per cent in the past 12 months, which is much higher than was forecast. Andy Verity of the BBC has said that

“pressure ... is coming from ... rising commodity prices. The prices manufacturers paid for raw materials were up by 14.3%”

during that time.

I have a couple of questions that I want to explore with you, with your knowledge of manufacturing in general. How are businesses—in particular SMEs—coping, given the level of debt that they are already carrying, whether that is from bounce back loans or coronavirus business interruption loan scheme loans? Do you anticipate cash flow problems for the sector, given the rise in commodity prices and the supply chain issues that we have already discussed?

I should have said that those questions are for all the witnesses, starting with Nick Shields.

That is very helpful. If there is any further information that you can provide to narrow down the topic in terms of the type of bids, it would be useful to have that. As someone who has made a UK finance bid, I appreciate what you have said.

Does Keith Ridgway or Iain Bomphray have any final points to make on investment and innovation finance before we move on? I am conscious of the time.

On that point, there have been a few mentions of innovation in supply chain materials that will help us to meet our net zero targets. I suspect that that kind of innovation is of great interest to the committee.

Staying on the issue of finances, we all appreciate how important innovation is. Do you anticipate access to finance for such innovation presenting any problems? Are you seeing that? Is it difficult to access the capital?

Does Iain Bomphray have any final comments before we move on?