Chamber and committees

It is no secret that I, along with my Government colleagues, believe that Scotland would be better served if we were able to make decisions on all aspects here, because we would have levers that we do not currently control and would be able to make decisions that we cannot currently make. That is a point of principle. Our position for more than a decade has been that that is what we would pursue, short of independence.

On the idea of incremental gains, one reason why I was keen to have a more fundamental review of the fiscal framework was to recognise the limitations. We are unable to respond to headwinds and events, such as a global pandemic or a war in Europe, as we would want to, because we are very constrained by the current fiscal framework. My assertion, and the Government’s, is that we would be better served by having a full range of fiscal levers at our disposal. The point that I made to Michael Marra was that the detail of what that might look like would be the result of the work that we would do as part of any review of the fiscal framework, but that door is not open at the moment.

None of that takes account of the use of levers; it is all predicated on the current constitutional arrangements. The GERS position is, in essence, a failure of the current system when we should be looking at having a different system and at how those levers could be used. We can debate that—

I am not in a position to sack anyone, because that is not what ministers do—

When you use the term “spin doctors”, I think that it is in reference to the entire communications staff across every public sector organisation. I will write back to the committee on that. The special advisers take up a couple of desks in the office on the fourth floor of the Parliament. The idea that there is an army of hundreds of them is not the case—no way. I think that that figure captures every communication officer in every public body in every part of the public sector, including every NHS board and probably local government, too, in order to make it a big figure. If your question to me is about what the value of those roles is, I think that it is important that there is communication from our public organisations, not least the NHS. Public organisations must have an effective way of communicating, and that is what the people concerned are tasked with doing.

There is a challenge in making sure that we are able to sustain our public services and that we prioritise and make our front-line public services sustainable. Without getting too far ahead of what will be set out regarding the workforce and the public sector in the reform programme, that will inevitably mean changes to how things are delivered. The use of technology and digital will help us in our ambitions to make those changes, but some support functions will look different over the next few years. That will all be set out in due course as part of those plans.

We do not collect the costs in that way, but it is clearly inefficient to have to go backwards and forwards to extract information. The protocol was probably an attempt to streamline the process and have an agreement that could help to move that forward. We are pleased that we got that, but it is then about the custom and practice. You would have thought that it would have been good for the same time, effort and priority to be given to a sit-down negotiation with each of the devolved Administrations, rather than our having to negotiate and spend all that time with Whitehall departments. By and large, our budget will be set by the fallout from that.

It is inefficient, and I will tell you about another thing that is inefficient. We offered to work with the UK Government around some of the economic opportunities. At the meeting that was not the FISC, I made the point that, if we aligned our economic energies and efforts—and, sometimes, our funding—so that they faced in the same direction, we could get a lot more out of that. For example, the Scottish National Investment Bank should be able to access the National Wealth Fund, rather than being the recipient of decisions that are made elsewhere. How could we align and agree to get more bang for the bucks from the investments that we are making? That was our offer.

Good morning. I welcome the opportunity to support your inquiry into the budget process in practice. You have heard from a wide range of stakeholders as part of your work so far, and I am pleased that that has included recognition of the significant progress and improvements that we have made over the parliamentary session. Those improvements include the transparency and comparability of financial information supporting public discourse and stakeholder engagement, both as part of the budget process and throughout the year. That progress reflects our commitment to continuous improvement, the important scrutiny role that is undertaken by the Parliament and, of course, the work of the committee and the very high quality of contributions and engagements from across civic society, for which I am very grateful.

We have come a long way from the work of the budget process review group in 2017 and from the finalisation of the written agreement. The fiscal landscape is increasingly complex and has included many unforeseeable fiscal challenges, which the Government has addressed through deploying the fiscal levers that are at our disposal.

Often, I am afraid, my meaningful engagement with the committee and the provision of sufficient clarity to it is not helped by the approach of United Kingdom Government ministers towards devolved Governments. My counterparts in other devolved Governments and I called on HM Treasury to involve us at an early stage in the UK spending review and offered to work with it on areas of shared priority and common cause. However, its response has been somewhat disappointing and—frankly—has missed an opportunity to develop a new approach.

In particular, as I set out to you in detail in my letter last week, the Treasury has not prioritised meetings with ministers from devolved Governments, has refused further ministerial engagement and will not provide meaningful clarity on spending priorities across Whitehall departments until after the UK spending review has completed. That means that we will not have satisfactory clarity about the UK spending review’s implications for Scotland in advance of its publication on 11 June, and explains the difficult decision that I took to delay the publication of the medium-term financial strategy.

I appreciate the difficulties that that causes for the committee and am committed to working with you to mitigate the impact. Publishing the MTFS after the UK spending review will allow reflection on the outcome of that review and will provide a more robust central funding outlook, which is key to our financial strategy and delivery plan. The accompanying fiscal sustainability delivery plan will set out the actions that this Government will take to deliver progress.

I am pleased to announce to the committee that, as part of the MTFS, I will publish a framework for the next Scottish spending review. That framework will set out the proposed timeline for our spending review and the approach that we will take in analysing budgets and spending proposals. I intend that approach to be anchored by this Government’s four priorities and the need to ensure that Scotland’s finances are sustainable.

Given the committee’s views to date, and those of our stakeholders, I am considering publishing the conclusions of the Scottish spending review and the infrastructure pipeline reset in December, alongside the 2026-27 budget. That will allow us to present the Scottish Government’s medium-term financial plans after we receive key funding information from the UK Government following its own spending review. I plan to provide the committee with formal written confirmation of that timeline in due course, ahead of publication of the framework, and would welcome the committee’s view on that proposed timing and on other aspects of the spending review.

I look forward to our discussion.

I think that I was very optimistic, originally, because there was a pretty low bar with regard to the flow of information previously. As I have said to the committee before, the flow of information and the relationships initially significantly improved, and that remains the case to some degree. To be blunt, because of that, I expected near spot-on information to be shared with us around the spending review outlook. Not least, I expected direct engagement through the finance interministerial standing committee and bilateral meetings and that that would give us some certainty. The UK Government knew what the timeline was for the MTFS, so I thought that it would be able to give us that degree of confidence.

I have to say that, at the meeting that we had—it was not a FISC meeting—with all the devolved Administrations and the secretaries of state, when we asked questions around, for example, the spending department priorities and which departments were likely to be prioritised over others, what we were told was, in essence, what was in the public domain and nothing more. When a request to have bilateral meetings was declined, because the Chief Secretary to the Treasury said that there was no time because he was tied up with bilateral meetings with Whitehall departments that would not conclude until the end of May, we made the point that the outcome of those discussions would determine the funding envelopes for the devolved Administrations. After that meeting, I felt growing unease and receding confidence, not least given the defence announcement, because there were signs of shifts in spend without the ability to have any level of detail about that.

At one point, there was a kind of vague offer along the lines of, “If you give us some broad envelopes, we’ll maybe tell you whether those are in the right ball park,” but, even then, the UK Government was saying that it probably could not do that until the end of May and possibly early June. In the light of all that, I am afraid that I concluded that, out of a difficult set of options, the primary overriding consideration for me had to be the accuracy of information, and I was not confident that I could provide accurate information at the end of May in advance of 11 June. We would potentially have to immediately revisit that information—two weeks later—if it turned out not to be accurate. I understand the committee’s concern about the terms of the written agreement, but I had to make a judgment about what was paramount. I felt that the accuracy of information was paramount, and we just do not have that at the moment.

I go back to the earlier exchange with Liz Smith. I think that we were all taking note of the lack of committee engagement; it felt very perfunctory, and we all want something better than that. The question is, what might work better? There might be a common cause to make some improvements. A finance bill might be one route forward, but there could be other routes, and we should have further discussion about that.

Obviously, we take careful notice of every committee report—what they say and the issues that are raised—and we try to answer queries and to reflect some of that opinion in how we might improve things at the Government end. There is a point to be made about the on-going level of engagement on budgets throughout the year and whether there is more that we can do to support committees in that work. Some committees will focus on certain large spending areas, but issues that can become quite public and controversial can involve small areas of spend. There was quite a lot of interest when we had to do the emergency budget review, with elevated interest among the public, in committees and in the Parliament. However, there is probably less interest in on-going routine scrutiny of the budget, so there might be things that we can do in that regard.