Chamber and committees

The UK Government is in dialogue with us about all issues of the management of this year’s budget. That is part of our active discussion with the UK Government and I am happy with the nature of those discussions so far. That will have an ultimate effect on our budget management.

I am happy to explore propositions from local government. On the question that the convener asked me about the work on council tax, I am very keen that we make early progress, so that if there is greater flexibility that local authorities can deploy in relation to council tax we can seek to implement that.

Mr Mason put two specific examples to me. I am not sure where power and control lie in relation to fixed-penalty notices—I would have to take that away to check.

I am happy to consider any propositions that might assist local authorities. I recognise the challenge that local authorities face in the current context. We all face those challenges, as Mr Mason rightly says. I have a finite sum to allocate and I have taken a decision to increase taxation—not without controversy. That decision increases the resources at my disposal, which has enabled me, in the round, to increase the budgets available to local authorities by more than £550 million. If we were to increase that any further, we would have to take resources from somewhere else.

I will take that one away, because I cannot quite recall what the arrangements are. I will provide the committee with a response on that.

Our national strategy for economic transformation is a 10-year strategy, so my expectation is that activity will be delivered over that period. I will highlight three distinctive important elements. First, there is the development of entrepreneurship—that is the entrepreneurial people and culture element of the national strategy, which is vital, as it relates to some of the points that you have put on the record about the tech scalers. We have already seen formidable improvements in performance as a consequence of some of those concepts, and the Government is investing to roll those out around the country.

The second element is about the necessity of having productive regions and regional economies in Scotland. As an example of that, I recently viewed an investment that the Government has brokered—along with Highlands and Islands Enterprise, Western Isles Council, the Stornoway Trust and the Stornoway Port Authority—in the construction of a deepwater port in Stornoway, on which remarkable physical progress is being made.

That will open up the opportunity for significant new marine-based activity in the Western Isles. The first tranche of that will involve cruise ships being able to birth in Stornoway harbour, which large cruise ships cannot currently do. I heard about some of the preparatory work to develop more economic opportunities in the Western Isles to accommodate the interest and enthusiasm of visitors who come to the area on cruise ships. We have already seen some of that success demonstrated very effectively in Orkney, for example, where cruise ships can get right into Hatston pier.

That first tranche will significantly boost the economy of the Western Isles. That is before we get anywhere near hydrogen and the ability to develop green hydrogen from the renewable energy footprint that will come from the ScotWind process. That is just one example of one regional policy intervention that the Government is involved in supporting; we are involved in supporting many others around the country.

The third element relates to the development of the necessary skills and capacity to ensure that we can make the most of the changes in the economy that are coming our way. As a consequence of the much better dialogue that now takes place as part of the relationship between our college sector and business, for example, I am confident that our colleges are very attentive to meeting companies’ skills requirements to support the transition, particularly to net zero, and to be able to invest accordingly.

Those three issues of entrepreneurship, regional policy and skills lie at the heart of addressing the productivity challenge that you put to me, convener.

I am sure that such things help when people make those judgments. However, I am not certain where we would be able to exercise such reliefs, because I do not think that we have the flexibility to do what Liz Smith suggests. Both employers and the Government have to look with care at what they can do to maximise individuals’ continued economic contribution.

Definitely.

I am very happy to explore any issues around that.

A variety of questions come to mind. One of the points that the convener made was about being able to offer long-term certainty to the wider marketplace. That is really quite critical, not just for the wider marketplace but for the third sector and local authorities. We are often in a kind of stop-start situation in budgetary terms, and I understand that that is not desirable. I think that there is quite a lot that we could do to address the practicality of the framework.

We can certainly try to address that issue. We follow, and are obliged by statute to follow, the advice of the Scottish Fiscal Commission, which of course reflects on the OBR advice. That is the position in statutory terms. In approaching the budget this year, I was not thinking that I had to reconcile the position of the Scottish Fiscal Commission with that of the Office for Budget Responsibility; I was thinking that I have an obligation to listen to what the Scottish Fiscal Commission is saying and to take my budget decisions on the basis of that premise. I did not feel any confusion about where the centrality of advice comes from.

In certain projects, there will be implications as a consequence of interest rate changes. I do not have a detailed picture in front of me. The Government publishes the information on PFI projects annually, but if I can produce more information for the committee, I will look to do that.