Chamber and committees

Good morning. I am grateful for the opportunity to join you all and to give pre-budget evidence. I very much recognise the importance of Parliament’s pre-budget scrutiny and the impact that it has on the draft budget.

It would at this stage be helpful for me to lay out the context of our pre-budget discussions alongside our approach to this year’s budget. Through the programme for government, we have set out a five-year vision that is focused on eradicating child poverty, growing the economy, tackling climate change and delivering stronger public services. The 2027-28 budget will be the first opportunity to translate those ambitions into funded action and to set the course for delivery over this parliamentary term.

The budget must therefore balance delivering the ambitions that are set out in the programme for government and investing in long-term outcomes and prevention, while at the same time responding to immediate pressures and growing demand. Our commitment to pass on all front-line health consequentials in full has been delivered, with an investment of £22.5 billion in health and care in the 2026-27 Scottish budget. That provided a real-terms uplift to enable more sustainable and resilient services, with £17.6 billion for health boards, which is an uplift of 1.8 per cent.

The 2026-27 published budget also included more than £2.3 billion for social care, delivering our commitment to increase funding by 25 per cent. Within that budget, we have also provided £2.4 billion for primary care; a £100 million investment to deliver further reductions in waiting times, supplemented by a further £90 million in-year; and an additional £40 million investment in sport and physical activity.

We are also investing in prevention, the improvement of access in our communities and the reduction of waiting times. However, as we look to the decisions ahead of us, we recognise that we operate in a landscape of increased pressure on public finances and growing demand for public services. Achieving fiscal sustainability for future years will be critical, and public sector reform and productivity is a core part of that approach.

The PSR strategy sets out our commitment to save £1 billion by 2030 to improve service delivery and outcomes while reducing costs associated with duplication, clutter and administrative overheads. That includes, crucially, reducing long-term demand for high-cost acute services through a sustained focus on prevention.

I am focused on transforming health and care services so that the people of Scotland receive the very best of treatment and care, as well as the support that they need to stay healthy, independent and connected to their communities for as long as possible. That is why our plans for prevention, service renewal and national health service simplification will be so crucial to the health and care portfolio in the coming years.

Thank you very much, convener. I am delighted to be here to answer questions.

I echo the Deputy First Minister’s sentiment when she said that that budget represented a missed opportunity. We all know that rising demand for health and care services outstrips the increase in front-line staff and in the resource that we have made available.

We will feel the pressure of various issues as we go into this budget period. The block grant is projected to fall by around £450 million in 2027-28, and I have real concerns about capital over the spending review period in relation to that real-terms reduction. The increase in employer national insurance contributions continues to present a challenge. We all continue to live with the consequences of Scotland being dragged out of the European Union against our will. It has been well established that the hit to Scotland’s revenues has been about £3.3 billion. I would not underestimate or underplay the financial challenges in future. Those challenges are not going away any time soon. It will be for the Deputy First Minister to lay out to Parliament, in the draft budget, the detail of what we will do.

The national health service in Scotland has taken a different road to that taken by our counterparts in England and Wales. I would argue that we have trodden a truer path in terms of our founding principle of services being free at the point of delivery, rather than going down the route of marketisation. Further changes have taken place and are planned for the health service in England, and I have followed some of that situation.

Of course, Scotland’s rurality and our many island communities pose an additional challenge, and that partly explains the level of our funding per head of population. I would contend that, because of the actions taken in Scotland, our national health service is the cornerstone of our society, and it is an extraordinary force for good in this country.

I do not have up-to-date figures on waiting times in England and Wales. People will always make comparisons between ourselves and our nearest friends and neighbours. That is fine; we just have to be clear that we are comparing like with like. I sometimes think, however, that we need to broaden our horizons and compare ourselves with other European counterparts. I am always open to learning from other jurisdictions.

I hope that my letter to the committee on the continued provision of accident and emergency at Perth royal infirmary was very clear and put paid to any speculation in that regard. I have had assurances on that matter from the chair of the board.

On winter resilience, we have not kept money back in this year’s budget for winter. All of the budget allocations are already with health boards, because we wanted to support all-year-round planning for preparedness and resilience.

When I come to make my next statement in the Parliament, in advance of that or alongside that, I will pull together a range of information that we can put in the public domain, so that people have that at hand and can have clarity around some of the more procedural and structural aspects of how we are going about our business. That would include clear information about the aims and objectives of what we are doing.

You have asked me specifically whether there will there be two boards. I touched on the process of deliberation, because there were other options to consider. I have come to the very strong conclusion that two strategic boards would be best. That will depend on the underpinning legislative changes. I have one vote in this Parliament, and it is likely that a number of Scottish statutory instruments will be required in the change process. That is still being bottomed out—what the detail and the nature of the SSIs required will be, for example—but my very strong preference is for two boards. We need a balance between pace and ambition, and I considered other options.

On personnel, we are not at the stage of appointing folk yet, and I discourage any speculation in that regard, because we must have a fair and competitive process. I understand that, at a time of change, people speculate, look around them and make assumptions, but I am not going to participate in that.

On your point about travelling—this is separate from subnational planning, which I can talk about in more detail, if required—there are already people in various parts of Scotland who have to travel for specialist care. Most people accept that there will always be a degree of travel required to access particular types of care. The issue is how we support that. Ultimately, we want services to be delivered as locally as possible or as locally as is safe.

It will actually mean a more robust service. There is one myth that I absolutely want to bust. I will do everything that I can to persuade and convince people about this, and I will rinse and repeat this message as long as I have breath: this is not about centralisation; this is absolutely about the opposite. As well as our NHS simplification programme, we have commitments around our community first approach, and there is an established community first programme to tackle health inequalities and address some of the inequities in health provision—the unwarranted health variation. The once-for-Scotland approach will help to bolster fragile services, because we currently have 14 different ways of doing everything, including a whole host of corporate functions such as information, governance and human resources, so there is duplication in the system. If we can cut out duplication, we can steward our resources to maximum effect and get resources to where we want them to be as much as possible, which is in service provision.

Mr Long makes an important point. We often think of workforce planning in terms of quantum, but it should be about people and the specialisms in place, and not just around the structures and nuts and bolts of services. That is where the population health framework and the service renewal framework help.

With regard to workforce planning at the national, more strategic level, there is cognisance and consideration of demographic changes. We are all living longer, but that means that there is heightened acuity and complexity. People are living longer with particular conditions. It is about ensuring that people are on the right pathway, that we have clinical pathways, and that decisions are not made based on age by default.

I do not have any specific figures around neurology services to hand, but I would be happy to write to the member. I do not know whether officials have anything further to add on that.

I will pick up where we left off regarding the preventative budget and the budget-tackling work—sorry, I mean the budget-targeting work—where there are huge opportunities. Please bear with me, as I cannot read my own handwriting.

On the matter of preventative budgeting for this budget, it is crucial that, as a baseline, we continue to build the methodology and use it to develop the budget as a whole so that we can identify the drivers. There are huge opportunities with budget targeting.

Richard Foggo is intimately involved in that.

It is important to stress that we are not starting to build new organisations from the ground up and there is already considerable investment in the system. Nonetheless, it is important to quantify the impact of change, which is why the full business case is important, because it will identify any costs that are associated with change as well as savings in the short, medium and longer term. The procurement for the business case work and the modelling has now been completed, so we will be motoring ahead with the full business case, which I want to see by the end of next spring.

Last week, I spoke in the Parliament about the need for a spectrum of interventions. People who are struggling in the here and now need support and pathways into treatment or recovery, which we invest in heavily. You will also have heard me talk about the importance of prevention. The budget tagging work will be important in understanding the role of our record drug and alcohol investment. However, 80 per cent of the determinants of good health lie outwith the health and care portfolio, which also applies to drugs and alcohol. Providing whole family support and addressing poverty, and ensuring that people have purpose, work and access to education are all imperative.

In addition, the health service provision has to move away from centralised approaches. Several years ago, when I was the Minister for Drugs Policy, there were concerns about the provision of drug treatment services in Dundee. Actually, we need services that are prepared to reach out to people—not just to write letters to folk, but sometimes to chap people’s doors. There is an immense need to do things differently, and that journey has started in relation to drugs and alcohol. Support is needed for the voluntary sector, which is well placed for prevention and response work. We really need that and must continue with a cross-Government approach to drug and alcohol challenges.

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