Chamber and committees

We have had the national performance framework for the past few years in order to try to focus more on key performance indicators when it comes to the budget and the Government’s delivery and targets. We are finalising work just now to look at the national outcomes, the programme for government and the benchmarking indicators. We are taking the portfolios across health, justice and education and creating a green-amber-red dashboard showing the indicators and the commitments that we have made. That has been at Cabinet as a first revision, and I, Mr McKee and the Deputy First Minister will continue to work on it across our portfolios in order to go back to Cabinet with an additional revision.

We are here to create value for people across Scotland. Sometimes we can allocate numbers to that, but sometimes it is more narrative. Sometimes we can track real-time indicators and see clear numbers across many years, but sometimes we cannot. Value is about considering narrative and numbers together. I am very encouraged by the work that has been done on the national performance framework. I can see that it is going to deliver and change the way in which we measure progress. It is about having a delivery-focused mindset when it comes to our manifesto and programme for government commitments. I look forward to seeing that revision come to Cabinet in a few months’ time.

There are always transfers in year. On the initial budget setting, we are a minority Government, as you know, Mr Kerr. In the next couple of hours, we will hear what our budget will be, and we will start negotiations with other parties tomorrow or next week. The £20 million is something that we are committed to and, as I have heard, it is a priority of yours, so I look forward to the negotiation with you and the party that you represent so that it is included in the initial budget setting.

Every year, we have to look at transfers across the portfolio. This year, it is coming from ScotWind, and we need that active balance process when it comes to transferring money across the year. I put the matter back to the committee, which has been demanding more baselining of funding in the initial budget setting that we will do at the end of this year—it is because of the actions of this committee that we have increased the baseline funding. However, if the Conservative Party wants the real living wage commitment to be in the baseline budget setting, without having to use ScotWind money year on year and without having to find the money within a budget year, I very much look forward to seeing that in the party’s requests as part of the budget negotiations.

In part, I refer back to my previous answer about the movement in the portfolio across our budget year on year and within the 12 months. On the figure of £35.2 million for Qualifications Scotland, the operational costs of the Scottish Qualifications Authority have increased due to pay awards; inflation; increased costs of the exam diet following the introduction of the curriculum for excellence—of course, that happened many years ago, but that demonstrates the scale of the challenge—the removal of unit assessments; and increased appointee costs to ensure that they are in line with the living wage, which ties in with your previous question. Therefore, if I am hearing that the Conservatives are prioritising that £35.2 million in their budget asks in relation to having to allocate that—

Thank you.

In relation to resource and capital funding, the port infrastructure and upgrades that you have indicated will, in time, lean towards capital investment, whereas, fundamentally, ScotWind funds are being used as a backstop to support resource spending, which covers all the daily spending by public services. We are talking about two different pots and a way of allocating and accounting for that funding. However, I understand that it is frustrating.

I appreciate the frustration that you may feel at the answer that I am about to give. The capital projects that you indicated are unlikely to be ring fenced for specific allocations that pertain line by line to the 2026-27 budget. We are retaining the majority of the reserve to hedge against the uncertainty arising from the defence budget, which will be announced in a few hours’ time. Reprofiling will then take place in the next budget cycle. I wish that we had the ability to fund our budgets on a multiyear basis, and I know that local authorities across Scotland would welcome that, too. Unfortunately, that is not the position that we are currently in with regard to our relationship with the UK Government. The reset and reprofiling will occur as we start to go into budget negotiations. I appreciate that this is not the place to talk about that, convener, but it is important context to consider in the round.

Absolutely.

Again, as a collective or as a minister or a cab sec, we are faced with a dilemma. We are a country of 5 million or 6 million people, comparable in size to some of the Nordic countries—I take Norway out of that because of its financial situation, with its multitrillion-pound wealth fund—and some of the Baltic countries. An element of scale is therefore required with regard to some national policies and directions—we need some economies of scale as opposed to baselining absolutely everything across our country and our diverse islands. It is about pushing that, and the committee has played a vital role in pushing Government to get to a position of baselining more, but there is a dilemma, and a choice to be made as to how much more we baseline as we go forward.

I can see the case for more baselining, but I also know that autonomy and further devolution costs, and it has to be worth it. That is all to be considered as we go forward with public sector reform and pushing power out and across into communities across Scotland.

When I have been looking at the projections for the next three years and where we have come from in the past three years, I make it no secret that I am incredibly concerned at the financial position in which we at Scottish Government level find ourselves.

It is not unique to the Scottish Government. The UK, too, has been contending with it—as have, to be honest, all economies across the west. Since 2008, we have had the financial crash, austerity, Brexit, Covid and two ongoing global conflicts—in Ukraine and the middle east. The economy is not immune from all of that. In fact, it is entirely interdependent, especially given that it is linked, particularly here in Scotland, with energy—gas and oil.

The cancellation of SEND-related debt at the local level in England has resulted in positive consequentials for us over the next three years. We have done the scenario work to look at how we could balance that situation across three years. If we do not use all the consequentials this year, we will not balance the up-coming budget. I say that not lightly but to indicate to the committee and to Westminster colleagues who may—I hope they will—be listening that we are in an incredibly challenging financial situation.

We have had a look at different scenarios concerning taking the SEND consequentials and distributing them throughout the next three years. However, I reiterate that, if we do not use that money this year, including the backstop options that we have looked into, we will not balance the budget. We are required to do so by law, and we have done so every year since this Government took shape 19 years ago.

We have made no secret of the position, and we have been transparent with the committee. I thank the committee for its continued scrutiny of the matter. However, if we do not use the consequentials this year, we will be unable to balance the budget, and we cannot legally allow that to happen.

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Some budget lines are in double digits, some are in single digits and some are even less than that. Given that level of granularity, we are unable to attribute that at all levels. However, in relation to portfolios and categorisation, that is something that the national performance framework looks to do. As I said, some things can have numbers attributed to them while other things are by their nature more qualitative and less able to be fully quantified. I do not think that we would be able to achieve very granular detail on outcomes line by line.