Chamber and committees

I take your point. It is not an unreasonable request, and we could give it further consideration, but any such amount would have to be very modest, given the fiscal position. I can envisage a scenario in which we are in Parliament, being asked questions about resources in the here and now, while at the same time, we have this pot sitting. However modest it might be, it would be a focal point, and we would be asked why we were not deploying it for X, Y and Z. Those are the very real debates that we have all the time around the here and now. If we were in a different fiscal position right now, what you suggest would be a very wise thing to do and a constructive way of building resilience. It is one of the few genuinely flexible areas of funding that is not constrained by all the machinations of the fiscal framework and so on.

At the Net Zero, Energy and Transport Committee, we had a discussion about whether you could align with the £4.7 billion the resources that are already being deployed and are having a positive impact on our climate change goals. You could cut that money however you wanted to in relation to investment in offshore wind commitments or in some of our other positive action on climate change, and that is something that I will continue to consider.

If, in the short to medium term, we find ourselves in a better financial position, your suggestion will have some merit, but I feel quite constrained at the moment. When public services absolutely require every pound of investment, I find myself quite torn between the attractiveness of doing what you suggest and having that money available in the here and now.

There are a lot of moving parts around that. The housing minister has been actively looking at levering additional investment into affordable housing—mid-market rent, in particular—through the private sector, and at how we might be able to utilise some of our funding to create business models that make that more straightforward. We are looking at how we can be imaginative. I am less precious about where the funding comes from to keep on track.

The only point that I would make, I guess, is that the capex reduction is challenging enough, but it also comes hot on the heels of construction inflation at its peak. I think that it was at 25 per cent at one point, and it is never going to go back to what it was previously. As a result, you might have your pot of money, but you are getting fewer bangs for the buck, because of the higher cost basis. That is a challenge even before you get to the challenge of the availability of capital funding, so we are going to have to look very closely at what can be done and what the trajectory of delivery is. If we can lever in external funding sources, that will ensure that we can deliver and keep things on track, but it will be a challenge.

Yes, absolutely. You could break this into two parts, the first of which is some of the short-term reforms that have already been taken forward on, for example, second homes and empty homes and which I think have been helpful. However, we have an absolute commitment to examining what longer-term reform might look like and whether we can land in a space of a fundamental reform either to the council tax system itself or, indeed, a new system.

Local government is committed to that, and I would think—I would hope—that there is an element of cross-party consensus that reforms need to be made to the system. Whether we can find that space of consensus, I do not know, but I think that it would be very helpful. After all, whatever we land on has to stand the test of time, be fair, address some of the anomalies and be able to raise enough revenue. All of those are, I think, key elements.

We have the joint working group, which has functioned very well in focusing mainly on some of the short-term reforms. There is no doubt, though, that we need to set out a path to that longer-term reform. It is not going to happen overnight—clearly, it will take a bit of time—but some destination point has to be agreed and we are keen for that to happen.

All those elements would need to be taken account of in any proposition for any alternative system. Any system of local taxation will have to have a property element—for me, that is important. Trying to reach agreement on a system that addresses those issues will be tricky. There are lots of political challenges within that. I am keen—if there is the space in Parliament, for example—to create a bit of consensus on those matters, which would be helpful.

The fiscal framework is important to COSLA and local government. They want to see a reformed system that addresses some of the anomalies that we are all well aware of. That is a challenge. I am keen, as I said, to create a bit of consensus in that space, if possible.

It is—there is nothing about what is happening this year that is different from what happened last year. The position this year is the same and the budget process is exactly the same as it was last year. This year’s negotiations with the Scottish Funding Council are no different from last year’s.

If you are saying to me that you want more money to be provided for universities and colleges—

I am talking about the number of things that they are doing.

I respect Sandy Begbie, as I have said, but I do not agree with that description. Earlier in the meeting, I mentioned a number of economic indicators, and I also quoted the Fraser of Allander Institute, which does not always use the language that it has used in relation to the outlook for the Scottish economy. Despite the recession that we are seeing across the UK and despite the financial and economic challenges that exist, those economic indicators show improved productivity, improved tax take and wage growth. They all show that Scotland is still a very good place to invest and do business in, whether from the point of view of inward investment or of business investment decisions that are made here in Scotland. All that I can do is point to the economic indicators, which give a slightly different narrative from some of the other things that we have heard.

As I have said, I have a lot of respect for Sandy Begbie, but I do not agree with his description.

Let me say a couple of things about that. First, I go back to the point that, with less money, we have less money and there is less money to go round. The decisions that we have taken have been very difficult. There is the ring-fenced funding of £61 million, on which I have given a commitment that it will be returned to the portfolio. The first instalment of £15 million will be returned in 2024-25. I will look at the remainder of the funds being returned in full at the right time, in negotiation with the sector, to help—

No, but I want to do it in a way that supports the reform and transformation of Scotland’s farming and food production industry. That is the purpose of that funding—that is what the sector wants it to be for. However, I want to do it in a way that brings it in at the right time for the sector. If we do not do it at the right time, there is a danger of its potentially not being spent. The preparation has to be done so that, when it comes to the reform and transformation process, we are clear about what is needed when.

Those discussions are on-going, but I can give an absolute commitment that all of the £61 million will be returned and that it will be done in a way that is absolutely in line with what the sector needs.

I have been very clear with the retail, hospitality and leisure sector when I have met organisations or, indeed, individual businesses that the choice in what I did with the £260 million out of the £310 million of consequentials was between investing it in public services or business tax cuts, and I could not in all conscience not invest the money in public services, primarily the NHS. As Liz Smith will be aware, we hear day in, day out from her own back benchers calls for additional public spending in many areas, including the NHS. I suspect that, had I used the £260 million to fund business tax cuts for retail, hospitality and leisure, I would have been answering questions either here or in Parliament as to why there was less money for front-line public services.

Ultimately, these decisions have to be made, but in a constrained fiscal environment where money is tight, I cannot in all conscience not give the money to the NHS rather than business tax cuts. It is for others to say whether they would have made different choices and what the impact would have been on public services.