Chamber and committees

We are asking them to focus on the key things that will make a difference. Some of the other things that we have traditionally asked them to do will perhaps need to happen more slowly over time. The letters that we will issue to each enterprise agency will set out the key things that we will ask them to deliver over 2024-25. Some of the things that are not garnered together as key priorities will have to either not happen, or happen more slowly.

I can certainly write to the committee with that figure. There will be huge differences between the levels of reserves. Creative Scotland’s reserves have been pretty well discussed in the public domain, but there will be other organisations whose reserves have had less scrutiny. We should not necessarily see the issue as a negative—such reserves might be pertinent to investment plans and reforms that organisations plan to undertake—but we also cannot ignore it. It has to be part of the picture when we consider how we get to a more sustainable position with some of the necessary reforms and think about how reserves are utilised in the short to medium term.

That also includes the UK-funded annually managed expenditure—student debt—so we do not have control over that. That is included in that figure. Alison, do you want to say something?

Some of it will relate to particular areas of delivery that are required at a particular time. I will turn to Alison Cumming for the detail, but I think that part of it will be around the requirement for us to support police pensions, which is reflected in the budget for the police. Some of it will relate to particular cycles of requirement and investment, and the police budget is reflective of that.

The budget is, in very difficult circumstances, trying to invest in as many areas as possible to deliver on the Government’s objectives, but there is less money to be invested. If we were to have increases in all the areas that you mention, it would mean reductions in budgets elsewhere. We have to make choices to deliver a balanced budget. Those choices are not easy, but we are in consultation with Neil Gray and other ministers on what we will do to ensure, for example, that our enterprise agencies are focused on the key things that matter.

The skills review that Withers delivered challenged us to ensure that our skills delivery landscape—which involves a huge, multi-billion pound investment—delivers better impact for the economy and that our apprenticeships deliver. Graeme Dey is taking forward some very important work to ensure that what our apprenticeship system and college offerings deliver is more aligned with what businesses say they need to fill the skills gaps in their sectors.

Taken with the strategic investments that we are making in green energy and renewables, we have tried to align a declining amount of resources, particularly on the capital side, to have the best impact that we can. Those decisions are not easy, and if you asked me whether I would prefer not to have had to make them, that would of course be my conclusion. However, in the light of falling budgets, we have to be clear—and we are being clear—with our agencies that the focus needs to be on delivery.

There has been an analysis of the impact of the £500 million investment, of which the £69 million is the first tranche. I do not have that in front of me, but I can forward it to the committee. That investment was explicitly recommended by the investor panel, which said that investment in that sector is the one key investment that the Scottish Government can make that will have a substantial return for the Scottish economy. We have talked about the constrained capital resources. Given that there is less money to invest, we have to be pretty strategic about where we can invest, and we have identified that area as important.

The Fraser of Allander figures that you referred to show that Scotland is seen as a good place to invest because of that certainty of objective. It is very clear, with no ifs or buts, that that area of the economy will continue to see investment, and that speaks to international investors who are looking to make choices about where they invest.

No—because the Scottish Funding Council has not completed its discussions with the sector.

I take the point that universities that rely more on the teaching grant, particularly the smaller universities, are in a different financial position from larger universities that are sitting with large reserves, which we were talking about earlier. Their differing positions will be taken into account in future discussions.

As I said to the convener earlier, the easy thing is to point to areas of the budget where there are challenges with falling resources; the more difficult thing is to put forward a proposition on what different decisions would be made. I would be happy to hear them.

Since 2018, devolved employability services have reached more than 100,000 people. They continue to do some very important work. There is a move towards a system that will be easier for users to navigate and that is more focused. Local employability partnerships are being given responsibility to deliver services in their areas that meet the needs of their users and local labour markets. That is where the focus of employability services will be.

There is no doubt, however, that where employability funding has been reduced, whether it is through the in-year savings this year or last year, that has been an unfortunate consequence of the pressure on Scottish Government budgets. Had we made decisions elsewhere and not in employability, I am sure that those issues would be raised with me today.

With regard to the position of business, I know that on non-domestic rates, for example, businesses in the relevant sectors would have preferred the Scottish Government to have passed on the NDR business tax cuts. Had we done that, however, there would have been substantially less funding for the NHS and for public services.

Ultimately, these matters come down to the choices that we have had to make. Those choices have been difficult, but I could not, in all conscience, cut business taxes at the expense of investment in the NHS.

When we sit with the choices in front of us and we have to balance a budget, and make decisions between business tax cuts or NHS funding, I have been clear that there is only ever going to be one answer to the question, and it has to be prioritising investment in the NHS over business tax cuts—at this time, anyway.

Give me a second.

Essentially, the SFC will be discussing the matter with the sector. It is fair to say that it is expected that the funds that will be available to colleges at the start of 2024-25 will be very similar to the funds that were invested by colleges in 2023-24. A number of in-year savings were made in demand-led areas of spend, where the figures were lower than had been anticipated. We anticipate that the allocations will be very similar to the core funding that colleges received—and have been investing—for 2023-24. The college sector is already working on and delivering careful management of demand-led spend, including a continuation of savings that have been delivered in this financial year. That is what the SFC would support the sector to do.

No—there is no number or figure that I am aware of that relates to that figure.