Chamber and committees

I have not made a decision about that. I am optimistic that all the funding will be utilised for its intended purpose. We have not made decisions about how remaining funding will be distributed.

We have given the SNIB the vast bulk of the financial transactions that we have available to us. However, remember that, as we have discussed previously, UK Government financial transactions have gone off a cliff. That is unfortunate, because the two areas of spend for financial transactions have traditionally been the affordable housing supply programme and the SNIB. We have prioritised the SNIB for the financial transactions that are available to us. That means that the affordable housing supply programme has less available to it in financial transactions.

The supplementary estimates that I referred to indicate a £64 million reduction in financial transactions that we will have flexibility to manage in 2024-25. That will heap pressure on the areas of the Government that use financial transactions. The additional pressure of managing that further reduction in financial transactions is now in the pot. We will have to assess that once we see the full picture in the spring budget on 6 March.

I make the point that FTs are a useful source of funding. We have traditionally utilised them well in the two areas of spend to which I referred. When they are significantly reduced, that has an impact. Because of the capital position—a 10 per cent reduction in capital availability—we are not able to supplement the reduction in FTs with traditional capital. Those things have an impact, and that is the impact that they are having. If the position changes in the spring budget, we will want to revisit it, because we recognise the importance of the SNIB.

I am not sure that I would put it in those terms. Social security funding is a key priority and an investment for us. It has clearly been an area of growth, as we introduce new benefits and make changes to existing ones. As you are well aware, that has led to significant expenditure and commitment beyond the block grant adjustment from the UK Government.

Important work is being undertaken on longer-term sustainability to ensure that social security funding can continue to deliver what it needs to deliver. That will mean ensuring that there is efficiency, that measures are effective, that the decision-making processes are as good as and as effective as they can be, and that the new benefits, in particular, are delivered in a way that is fair to everybody. We need to scrutinise delivery of social security, and we need to ensure efficiency and effectiveness within the system.

Is there an open cheque book? If that is what you are asking me, the answer is no. Social security funding is a priority, but we need to ensure that it is sustainable in the long term, so a lot of work is being undertaken in that respect. As we recognise, and as you and external organisations will point out to me, the future growth of that requirement is a key pressure on the Scottish budget, and we need to be aware of that.

There have been none.

I agree with that.

Of course.

That happens more now, but there is still room for improvement. There has been a more thorough deep dive into each portfolio and each public sector body to look at what they do, what they should do and where there is overlap or duplication. There is still, without a doubt, scope to do more in that territory and question which public bodies are best placed to take forward particular areas of policy.

As for your point about Creative Scotland, I concede that we probably could do more in that area as part of the public service reform agenda. I am really keen to explore not just who does what, but whether more can be extracted from organisations working more closely together. At the end of the day, it is all public money, and we need to make sure that organisations, including Government departments, come out of their silos to work together more effectively. I think that there is more that we can do in that space.

You make a fair point. I cannot quite see what the solution would be, unless we could genuinely move to multiyear funding. However, that would involve our knowing that we would be able to provide such funding, because we had an assurance that we would receive multiyear funding. Without knowing that, we would find it difficult to work in a different way.

Your point is a reasonable one, though. Alison Cumming might be able to say more.

At the moment, that money is supporting the spending side of the budget, without which a difficult budget would have been made even worse.

I take your point. I am not unsympathetic to the suggestions that are being made, and I certainly do not have a closed mind to either your point or Michelle Thomson’s point. I am wrestling with the here and now, while also having an eye to the future. There is a bit of a tension, given that I am looking at pounds, shilling and pence in portfolio allocations and difficult discussions and decisions have to be made around that. It is a challenge. However, as I said, I do not at all have a closed mind to the principle of those suggestions.

The Resolution Foundation described it as a “stagnation nation”, with all of the above that you have just described. A number of key indicators show Scotland’s position in that very difficult economic and fiscal climate. For example, Scotland’s GDP per capita has grown faster than the UK’s since 2007. Productivity has grown at an average rate of 1 per cent a year in Scotland, compared with the UK’s 0.5 per cent. We are making better progress on things such as the gender pay gap. In terms of inward investment, we are the top-performing region outside London and the south-east, and we had the third-highest wages and gross value added per person when those were last measured, in 2021.

Sometimes a certain narrative about the Scottish economy is put forward by people who seek to portray it in a particular way. I am not downplaying any of the challenges, but the key economic indicators show, over a number of years, a trend in many strengths that underlie the Scottish economy. For one thing, the tax base is up, and that is good. The Fraser of Allander Institute has adopted

“an atmosphere of cautious optimism”

for 2024, and the Fraser of Allander Institute can be quite challenging at times, so that is welcome.