Chamber and committees

It is hard to see how there will be progress this side of the election. If there was agreement on some principles that could work their way into manifestos, for example, or areas where there is more consensus on reform, that would be a good thing to break through some of the inertia and the lack of agreement. However, there is not going to be time for practical work to drive that forward, beyond the work that is already in train, which you mentioned earlier. It is about seeing whether there is scope for cross-party consensus on some change that could hit the ground running in the early part of the next session.

We have had no official confirmation from the Treasury. I am waiting for a reply to my letter on the issue, in which I put forward the case that the full cost for the public sector is more than £500 million. If we include the areas that you mentioned—social care, universities and so on—that takes the figure up to more than £700 million. The figure that has been talked about in the public domain, which is based on information from sources, is between £300 million and £380 million. However, at the moment, I have not had it confirmed that we are getting a particular figure. Therefore, I am still pursuing the Treasury on that.

When we get to a final position, if it is only a Barnett share, that will not be acceptable, for all the reasons that I have set out previously. It would not recognise the investment that we have made in the public sector, and I do not think that we should be penalised for that. Once we get to a final figure, I will want to ensure a fair allocation of that. Clearly, we have not just the health, police and fire services but the Scottish Government and local government. Local government’s analysis was that the figure for it is about £265 million, so you can see that the gap is a real issue.

There is a degree of resilience in the budget allocations to local government and the portfolios. That is helpful, but we should not underestimate the impact. If there is a shortfall of circa £200 million or £300 million, that will represent an opportunity cost, because the money will have to be found and it will not be possible to spend it on other things in the portfolios.

The issue is far from resolved. We have a live negotiation with the Treasury, and we have had no formal response to say, “This is it—end of.”

I will set out as much detail as we are able to at that stage. Artificial intelligence and digital technology offer huge opportunities, and I want to say something about that in the plan. Work is already going on around the use of digital. In the NHS, there is the work on the digital front door, which is starting with NHS Lanarkshire. Digital is also being used in some of the capabilities of our public bodies. For example, the smart use of digital has already avoided the requirement for massive recruitment exercises. I will set out as much detail as I can at that point.

It should not be ruled out for ever and a day. It is there as an option, but it would very much depend on the circumstances that you have laid out. However, for the foreseeable future, it is definitely not the right time.

The tax strategy looked at whether there was scope, although not in the short term, to get additional powers, through agreement with the UK Government, on wealth taxes, for example. It also looked at working with the Scottish Land Commission on the issue of land—I know that that has been of interest to the committee previously—which could include consideration of a carbon land tax. However, that will not happen in the short term and will not raise revenue in this session of Parliament.

As I highlighted, our tax revenues are very strong but our issues include the complexities of the fiscal framework in relation to net gain compared with the rest of the UK and some of the constraints on things that we might want to do, such as boosting the economy through migration.

Earlier, I set out other levers that we are looking at for fiscal sustainability. I set out seven areas that we are exploring in order to contain costs and prioritise our funding. More detail on that will be set out in the fiscal sustainability plan, alongside the medium-term financial strategy, in the spring. We recognise that areas such as the workforce, reform, prioritisation of front-line services, the public sector landscape and support for back-room functions all offer opportunities to create the headroom to ensure that our resources are spent on our priorities.

Colleagues in various councils are doing their best to deliver services of the highest quality for their citizens. The Cabinet Secretary for Education and Skills wanted to make sure that there is stability in teacher numbers, so we have agreed with COSLA that the £145 million funding uplift, plus the additional money for additional support needs, will enable stabilisation of teaching figures at 2023 levels. Some councils are already beyond that, and councils that are below that level will require to make the investment to bring numbers up to the standard.

I am not going to focus on one particular council’s issue. I will look at it, but you are giving me quite a lot of detail—

In some areas, a policy clearly sits in the policy area to which the money is allocated, but delivery will be through local government. For example, the free school meals policy sits with education and the direction of mental health support policy sits with health, but delivery of those policies is a matter for local government. We would not necessarily want 32 local authorities to decide what the policy around mental health interventions should be, because the expertise sits within health. Likewise, with free school meals policy, what is to be delivered in terms of the structure, the costings and the requirements sits with education, and local government, working in partnership, has agreed to deliver it. I could go through a list of other polices and rehearse that position.

Page 40 sets out the list of those policies. That is transparent.

There is an impact, particularly on welfare. Somewhere in my folder I have the figures for the mitigation of discretionary housing payments, for example, and of other welfare policies. The figures are substantial. I think that the most recent figure was £140 million—I will see whether we can find it. That money could otherwise be used for other policy areas, but we feel very strongly that, in the absence of any UK Government action, we should prioritise spend in order to tackle child poverty and to meet the statutory child poverty targets. We have taken action on the bedroom tax and on child poverty, but there are substantial costs. I am sure that we will come on to the two-child cap, which is a mitigation that will largely come out of the 2026-27 budget.

Are you talking about the 2026-27 budget in relation to the two-child cap?