Chamber and committees

One critical driver of productivity on a per capita basis is encouraging innovation and entrepreneurship. We know that people who are involved in that are most impactful in terms of their productivity when they are around 45—I think that that is the average age. What more could we do through public policy, be that through tax or other incentives, to get people in that age bracket to start thinking that, rather than work for somebody, they should go out there, take risks and become the entrepreneurs who will drive economic growth?

You have warned in reports about the long-term sustainability of the Scottish public finances, as have other bodies in front of this and other committees. However, some of the underlying trends—largely in the public sector workforce and social security—and recent experiences do not suggest that the Government is taking them seriously. For example, since 2016, there has been a 71 per cent rise in the civil service workforce. The number of senior civil servants at grades C1, C2 and C3 has tripled.

Those are recent trends, and there is no sign that the Scottish Government is turning the ship around. It says that it has had great success in reducing the size of the contingent workforce, but they seem to be leaving through the back door and potentially coming in through the front door as full-time civil servants. Is the Government taking those warnings seriously, or is it simply discounting them and saying that you are all wrong and that it is on a sustainable path?

Use of artificial intelligence, robotics and other technology can also drive productivity. Yesterday, when I was looking at a graph that showed countries that have significant demographic issues and ageing populations—I could not find Scotland or the UK on it—Korea was far up at the top in relation to its use of robotics, which is another way to generate economic growth. Where are Scotland and the UK with using that alternative route to prosperity by bringing in the robots?

Good morning, Professor Roy. I read your report at the weekend and it hardly cheered me up. I was not full of beans afterwards. The picture is quite depressing, not just for us but for quite a number of Western economies. How can we make the labour market more productive in Scotland? Also, how can we effectively increase productivity on a per capita basis?

In that respect, it strikes me that there are three or four different key triggers: lifelong learning; skills; and people working longer, both into their older age and in terms of hours. Indeed, there is a debate taking place in Scotland about the length of the working week, and we have heard the discussion about scaling the public sector working week back from five days to four. What potential impact could Scotland working fewer hours have on our productivity?

Finally, you will have seen in the submissions from the Chartered Institute of Taxation and the Institute of Chartered Accountants of Scotland recommendations or calls for us to move to a system where we have a fiscal bill or a finance bill. My colleague Stephen Kerr said that a finance bill

“would consolidate tax and spending proposals into a single legislative package, providing a clearer, more coherent narrative of how revenue generation aligns with expenditure.”

From your perspective, based on your experience at Westminster and here, would that assist us in some way in tracking how the money is being spent and how tax aligns with expenditure?

You referred to the need to look more into departmental spending rather than look only at the headline figures in order to assess sustainability. The Scottish Government frequently says that there needs to be a pivot to preventative spend, particularly in relation to healthcare—indeed, the Scottish budget is predicated on that. Can you deploy any tools or benchmarks to assess whether there is actually a shift in portfolios towards preventative spending rather than dealing with the consequences of problems that are already there?

Politically, does the practice allow the Government, in effect, to announce the expenditure of the same money twice?

That is useful to know. Most of what I wanted to cover has been covered, but I want to ask about the old chestnut of in-year transfers across portfolios. In your submission, you repeat the argument that those transfers

“should be baselined rather than done on a recurring basis.”

You say that the Scottish Government should do that to allow more meaningful comparisons to be made across portfolios.

The cabinet secretary gave us her account of why that is not happening—she said that the money that is spent by schools that relates to health will first go into the health budget and then be transferred. Is that a decent reason for making such in-year transfers, or is there another reason why the Government likes having the ability to make such large cross-portfolio transfers?

I have a slightly more generic question, which relates to forecasting. What role is artificial intelligence likely to have in assisting you in the accuracy or the development of forecasting? Are you debating that in the organisation?

Good afternoon. Professor Bell, you identify what I think is probably a clear disconnect or discord between the budget and other initiatives, such as the programme for government and the national performance framework. In relation to economic growth, you observe that, in the budget this year, there was an allocation of £15 million for an enterprise package but, beyond that, there was very little investment in measures to encourage growth. You identify that, in real terms, Scottish Enterprise, Highlands and Islands Enterprise and South of Scotland Enterprise have, in effect, had their budgets cut. That leads you to say:

“The overall effect of budget measures on economic growth would be extremely complex to evaluate, but there is a strong case for combining relevant expenditures and discussing plausible scenarios as to how these expenditures might together influence the desired outcome”,

which is higher economic growth. In effect, the budget is bust without that. Who should be doing that work? Should it be the Scottish Government or the Scottish Fiscal Commission, or could it be Professor Spowage? Clearly, there is a need for that to happen, because the fundamentals of the budget are looking particularly dicey at the moment.