Chamber and committees

The reduction will happen over a five-year period and it is being delivered through a number of mechanisms that Ivan McKee has set out in the framework.

We expect all parts of the public sector to produce plans on how they will reduce their corporate costs. Some of that will be in the shared services space, so it is about sharing some of the corporate functions, such as human resources or payroll. Our Oracle system is on offer to the public sector, and a number of public sector organisations have approached the Scottish Government about coming on to the Oracle system. Organisations will have to look at how those functions are shared, rather than, for example, every single health board having all of the functions, which cannot be the way forward.

All areas, public bodies and parts of the public sector—even some of our small public bodies—are expected to set out detailed plans on how they will get there and make efficiencies. Ivan McKee is regularly monitoring that as it comes in. The invest to save funding was also important to oil the wheels of some of that work. Some of the efficiencies might be in the voluntary redundancy space, but others will come from automation and being able to do things differently. A lot of interesting bids for that money have been agreed to.

Richard, do you want to say a little more about that?

Yes. However, I will come back to you with the actual numbers. The target is significant, but it is more than achievable on the bigger scale, as you have said. However, it must be done in the right way: it is not about randomly taking an axe to services but, in the main, about natural attrition and voluntary severance. We have talked previously about the need to be clear about the no compulsory redundancy policy: in extremis, if all other routes have been explored, that will remain a possibility.

We have a Cabinet sub-committee that is specifically aimed at tackling and eradicating child poverty. At its most recent meeting—again, without giving away any trade secrets—we got into that space. For example, we talked about whether the mental health offer through the health service is reaching those children and families who need it most.

The same applies to our childcare offer. Is it flexible enough to meet the needs of families who are either not in work or are in low-paid or part-time work? It is about employability. More flexible childcare could assist those families out of poverty.

I assure you that, whether it is colleges, childcare or health, we are looking at what more we can do with the tens of billions that we spend on our public services to point them more in the direction of lifting families out of poverty.

As you would expect, we are bringing that degree of examination and challenge to all of our programmes—

I will come back to you on that. At the moment, we are in the midst of working through the carbon budgets and the climate plan and trying to align all that against a difficult fiscal backdrop. You are right to challenge the elements that are related to adaptation and mitigation; the question is how we pay for them. It cannot all come from the public purse, because there is just not enough funding.

We must consider how we lever in private sector investment and incentivise it. Let us take the example of district heating systems. Clearly, the financial model can work; we just need to push forward with it. It can be frustrating and slow to do so, but there is a financial model that can work, which uses the public sector to oil the wheels and private sector investment to put in place the infrastructure. We need to get better at identifying the issues and how we can lever in private finance and decarbonisation more generally, because we will not be able to fund it all through the public purse.

I will explore the overall cost with climate colleagues and come back to you on that.

This answer is at a very high level—I am not going to get into percentages—but I am keen to empower local government to raise more funds. Obviously, that will have to be done in a responsible way.

Councils do have borrowing powers; actually, they have more borrowing powers than the Scottish Government—

—but some are more at the limit of those powers than others.

There are certain approaches that we are exploring in the space of outcomes-based funding, and the one that is most advanced is the Granton housing project in Edinburgh, which also has an active travel and decarbonisation element. There are opportunities for individual local authorities to do more of that.

There is also the question of the local government pension fund, which is sitting at about £67 billion or £68 billion, and the strategic use of that investment, which local government is keen to discuss. Housing has been suggested as an obvious opportunity in that respect, but there could also be opportunities for infrastructure projects such as those for mitigating climate issues, for example, as well as other big decarbonisation and district heating projects. We need to explore whether more can be done in that space.

Clearly, any such models must have a return on investment—

Housing and energy are good examples, I think. There is more that we can discuss in that space.

And we are trying to do it as a devolved nation.

Yes, that is progressing. We have a new Chief Secretary to the Treasury, and I have not had a chance to raise it with him. I have had a very short introductory meeting with him, during which I had to raise certain things. I am getting a list of things together to talk to him about at the finance interministerial standing committee.

I have actually just been given an update here. We have agreed with CST to apply a bespoke arrangement to set the baseline for the block grant adjustment for the aggregates tax. We will use the outturn for the year of the tax’s introduction, which is 2026-27. That will ensure compatibility between the Scottish aggregates tax and the UK aggregates levy and avoid distortions in year 1 revenues.

I had not realised that—progress has been made beyond what I had understood.