Chamber and committees

You know my ambition on the fiscal framework. Previously, the scope for change was very limited, albeit that we got some adjustments. We absolutely want there to be a more ambitious review of the fiscal framework, but, despite our communication with the Treasury being better, I do not get the sense that it is keen to have a fundamental look at the framework. We will keep pursuing that issue as well as issues relating to migration policy and many of the other levers that will be really important to the Scottish economy, but that will require us to face in the same direction on those issues, and, so far, that has not been the case.

I have sympathy with the principle of the issue. We were concerned about the unintended consequences of crofts being captured, so it would need to be done carefully. The data issue remains problematic. I am happy to come back to you, Ross, with an update on where we have got to on that, if that would be helpful.

We are very conscious of that issue. The SFC analysis looked at some of that, but I suspect that it will do more. It looked at some behavioural changes, and we have been cognisant of that in relation to the Scottish child payment. We consider any research or evidence that suggests that there will be a cliff edge.

Bear in mind that the two-child cap is a penalty on families with more than two kids, which means that the universal credit system does not at the moment recognise the costs of children beyond two children. We believe that that is—

I take your point. On 4 December, alongside the budget, we published a memorandum detailing borrowing policy and guidelines, which includes an update on progress towards a future Scottish Government bond issuance. I recognise that, as you say, it is quite high level. The initial phase of due diligence has been completed and we need to take a number of things into consideration. For example, market conditions, which are very topical, must be taken into account, and a compelling value-for-money case must be made. The next stage of due diligence work will consider all of that in more detail.

I will update Parliament over the course of the financial year, but we will proceed with caution and take all the issues into account. The current circumstances are one of the issues that will be considered as part of that due diligence work.

Jennie, do you want to add anything?

Again, I can do so at a high level and perhaps come back with further evidence from social security colleagues. The social security system, which was supported by all parties, was designed to be fairer, easier to access and more humane. That has encouraged families to apply for child disability payment rather than discouraging them.

Another issue is relative levels of disability. I will correct this if I am wrong, but I think that there are slightly higher rates of disability in the population for various reasons—perhaps that applies more on the adult disability side.

The discussions are on-going and I have the next round of them on Thursday. I will be corrected if I am wrong, but I think that that will be the fourth engagement that we have had.

Some of the engagement, not just with parties but with stakeholders, was reflected in what was contained in the budget statement. There is always a balance to be struck between what you put in the budget statement and what might be held back because of the budget issues that you anticipate. We very much front loaded the budget statement with the key planks of our investment and priorities.

The discussions are very positive. I will not divulge the detail, but you will have heard Opposition politicians talk in the chamber about their priorities, so the areas on which they might want us to go a bit further will be no surprise. It is not about fundamental unpacking of and replacing the budget statement. The work is around the edges—for example, if there is a view that we need to go a bit further on something. Those are the types of discussions that we are having. They are very positive, which is a good thing. I have said from the start that I want to try to build the broadest support for the budget that I can. That would be a good thing in the current political climate.

You will be aware that any distribution formula changes come COSLA: The 32 local authorities decide what the distribution formulas are. We do not arbitrarily change distribution formulas that will change the way that—

That was decided by COSLA.

I will come on to that after I make a final point on child disability payment and disability payments and support more generally. Such benefits should be robust and consistent and should meet the test that they provide support for families who are under extraordinary pressure in their day-to-day lives because of a child’s or adult’s disability. The determination processes should recognise that. I will come back to you with an answer about why there has been a big increase in the child disability payment budget—there will be a rationale for that.

As for the two-child cap, we touched on the decision-making process earlier. As we worked through the shape of the budget, the First Minister felt, bluntly, that we were not going as far as we needed to go on tackling child poverty. He challenged us all to look again at what more could be done. There were various options, which we touched on earlier, such as increasing the Scottish child payment or doing something that would be more impactful and more targeted. Having looked at the options that were in front of us and at some of the evidence that child poverty organisations presented, we kept being brought back to the two-child cap.

I apologised to the Scottish Fiscal Commission for our communication at the point when we decided what we were going to do. If I had been asking the SFC to cost that for implementation in 2025-26, there would have been a pretty significant issue. However, given that the costings are for 2026-27, the SFC has been able to provide the costs in good time for the final stages of the budget in February. As I have said, the situation is not ideal. All things being equal, we would have wanted to give the SFC a heads-up earlier.

On the costings, in my interviews on the day of the budget statement, I talked about a range between £100 million and £150 million, which was based on figures that had not been through the Scottish Fiscal Commission’s costing analysis. I accept that £155 million is at the upper end of that range, but we now know the costings that we are working with when making provision in the 2026-27 budget. That is an honest laying-out of the various steps in how we got there.

If there are areas where we can improve transparency, I am more than happy to do that. The written answer that you received set out the detail. If there are improvements that we can make, whether on PPP costs or anything else, I am happy to do that.

I response to your first question, I will give the example of nursing education. The policy of how many nurses are required sits with health, but the money then moves to education. There are some areas in which it would be tricky to baseline, because the policy so clearly sits with, in that case, health. I am happy to reflect on that, whether in relation to PPP costs or to some of the further baselining at the start of the budget process.

I think that the Scottish Fiscal Commission commented that there had been improvements in the transparency of the budget, but that there was still work to be done. I am happy to work with the committee.