Chamber and committees

Local government has raised those issues with us, which are a subject of discussion with the Cabinet Secretary for Education and Skills; she will make a statement to Parliament today on the subject.

Just so that we are all on the same page, there are, as a matter of fact, 32 local authorities.

I do not think that I could say that we have issued a formal directive to all public bodies on that point, but those are well-established practices that we would expect leaders of organisations to undertake because of the fundamental point that I made to Mr Johnson that non-employee payroll costs are higher than employee payroll costs. In terms of the prudential management of public finances, we would expect individuals to undertake that.

In relation to the Scottish Government, we have headcount controls in place. We are working to reduce overall staff numbers. Actually, I will express that differently. We are working to contain staff numbers. We have increases in staff numbers because, a few years ago, we were not responsible for any aspects of social security. As we now have responsibilities, we have got more employees as a consequence. We are trying to reduce those costs and we have formal headcount controls in place that require appropriate sign off in the organisation.

I will check where we are with the information that the committee should have had about that and will get that the committee as soon as possible.

The context cited in the IMF report will have an impact on the budget; if the IMF is correct, it would be a mighty achievement for us not to be affected. Rising interest rates are a particular challenge because that affects several points in relation to investment in the economy at individual and corporate level. We need that investment to drive growth in the economy. For example, if a rise in interest rates leads to a reduction in house transaction activity, that will have an effect on land and buildings transaction tax revenue and subsequently on the Government’s budget.

I agree very much with Liz Smith about the significance of the population issue and the working-age population. Earlier in her remarks, she mentioned the labour-market implications of Brexit. Does she therefore agree that one of the implications of Brexit has been a reduction in the eligible working-age population? The Scottish Government will do all that we can to boost employability, but does Liz Smith agree that the strategic impact of a measure that has undermined population growth in Scotland is undoubtedly a factor that will undermine economic growth in the forthcoming period?

It is really important that Government ministers do not interfere in the business of committees, so I shall resist the temptation to get myself into trouble, which I constantly try to avoid. [Laughter.]

On that subject, I want to explain to members how the budget operates, because I think that a few members, including Stephen Kerr, have struggled with the concept today. I think that Mark Griffin struggled a little bit, too; I am normally very appreciative of his contributions, but perhaps his cold put him under the weather today and derailed his speech.

When we get Barnett consequentials, they flow into the total funding envelope that is available, and then the total funding envelope gets allocated. What is in the budget document is the sum total of all the resources that are at my disposal. Therefore, when Stephen Kerr asks me where the £100 million of education consequentials from the UK Government are, the answer is that they are fully allocated in the budget. I will give two examples of where they have ended up.

This is a difficult issue for the Government to judge upon, because the legislation to establish commissioners is essentially a matter for Parliament. Parliament also, through the work of the Scottish Parliamentary Corporate Body, has to regulate, or advise on the regulation of, the financial assistance that is made available to office-holders. That is a difficult issue for the Government to control, because doing so would potentially mean the Government intruding on the right and proper space that is available for Parliament to determine these issues. I am acutely conscious of the necessity to respect that boundary.

Having said that, all of us—whether we are members of the Government or of the Opposition—have a duty to recognise the pressures that exist on the public finances. That should be reflected in the financial support that is available to office-holders and the number of office-holders that we have in place.

The Scottish Government, like Governments all over the world, has been faced with a difficult set of choices in setting its budget. As I indicated to Parliament when I addressed the budget settlement in December, the volatile financial environment, including record levels of inflation and a cost of living crisis, have combined to create an exceptionally difficult fiscal landscape. The International Monetary Fund’s report on Tuesday reflects that and indicates that the United Kingdom is predicted to be the only major economy that will shrink this year.

Against that very challenging backdrop, we have taken decisive action to deliver a meaningful and progressive budget for the year ahead that delivers for the people of Scotland. With the powers that are available to us, we have chosen to commit substantial resources to prioritise support for families and the most vulnerable, invest in our public services and support businesses through these difficult days.

A central tenet of the budget is that we have asked the people of Scotland to contribute a fair share of their taxable income—and in the case of higher earners, to pay slightly more than they have in the past—to help to create a fairer society in which we all want to live and where we can enjoy a range of benefits that are not available throughout the United Kingdom. Whether that is free prescriptions, tuition fees, personal care or concessionary travel, the people of Scotland have access to a social contract with the Government that delivers so much more to each and every person who chooses to live in Scotland. Together with our partners in the Scottish Green Party, we are working to create a progressive path for Scotland.

The 2023-24 Scottish budget supports an ambitious path for Scotland that focuses on eradicating child poverty, transforming the economy to deliver a just transition to net zero and providing sustainable public services for the people of our country. The Government leads by example in the bold steps that it is taking to address poverty in Scotland. That is demonstrated through our social security system, which has been developed with dignity, fairness and respect at its heart.

We are committing £442 million in the year ahead to our unique Scottish child payment, which is the most ambitious child poverty reduction measure in the UK. I am proud that the Government has not only delivered the child payment but has expedited its increase, early and above inflation, to £25 per week per eligible child from November 2022. That is an increase of 150 per cent in eight months, and it is providing practical support to families who are most affected by the cost crisis. Indeed, the Scottish Fiscal Commission forecasts that around 387,000 children could benefit from the Scottish child payment in 2023-24.

The Scottish Government recognises that the burden of high inflation is felt most by households that are on the lowest incomes, which is why we are uprating all remaining Scottish benefits by 10.1 per cent from April 2023. We have also gone beyond the energy support that is being provided by the UK Government to provide £20 million for the fuel insecurity fund to help households that are at risk of disconnection, and are continuing that funding into 2023-24, as energy prices continue to bite.

There are two things that I would say to Mr Rennie. The first is that the Scottish Fiscal Commission’s projections about tax indicate a strengthening of the income tax base in Scotland, which is a reflection of the strengthening of the economy that the Fiscal Commission expects. The second thing is that the contents of the national strategy on economic transformation, with its focus on entrepreneurship and on the development of strong regional economies, form a foundation for the economic strategy that will deliver for the people of Scotland. Mr Rennie is right to raise the issues of economic performance, because they lie at the heart of being able to generate the revenues to create the fair society that I have talked about.

Next year, we will support our investment in ensuring that children get the best start in life by investing around £1 billion in high-quality early learning and childcare provision, with a further £42 million to be invested in holiday food provision and expanding our support for school-age childcare.