Chamber and committees

I do not expect there to be a distinct budget line for local government on Covid, for example, because I am trying generally to move away from overprescribing the local government budget. I would be surprised if local authorities said anything to the Government other than that they would like to have as much flexibility over the budget as they can in order to address the outcomes that they and the Scottish Government are interested in achieving. That is reflected in our joint work on the Covid recovery strategy. For completeness, I should say that the board that supervises delivery of that strategy is jointly chaired by the Government with COSLA. I chair it alongside the president of COSLA, so it is a really valuable joint endeavour.

The best way to address the point that Mr Fraser raised is to acknowledge that, today, the health service and local government are under enormous financial pressure. Mr Fraser and the other members of the committee will be familiar with the statements that I have made to Parliament since it returned from summer recess. In exercising my temporary responsibilities for financial management within the Government, it is clear to me that we face enormous financial strain in this financial year as a consequence of inflation and public sector pay costs, which will affect every budget across the public sector. I expect to be dealing with intense pressure within the public finances and I also fear that I will be dealing with some reduction in public expenditure. From what the Chief Secretary to the Treasury is saying, it seems likely that there will need to be reductions in public expenditure in order to create the route to financial stability. I very much regret that, because it will add to the significant pressure with which we are already wrestling.

I wish that we could claw back Brexit, Mr Rowley.

I can confirm that the Government is engaged in dialogue of that type with integration joint boards. Mr Rowley will be familiar with the statement that I made to Parliament earlier in September. We have to ensure that whatever resources are available to us are utilised to meet the enormous in-year financial pressures that we face during this financial year. Those discussions are under way.

I ascribe that to the burdens of office.

The question is: how do we all keep ourselves as healthy as possible? That is material to dealing with some of the issues relating to congestion in our public services that Mr Rowley has raised with me. The best thing that I can do for A and E is to keep myself healthy and stay away from it. There are things at both the societal and individual levels that we have to take forward.

If the Government directed local authorities to bring all of that work in-house, I think that a number of members—from different traditions—would say that the Government was centralising things once again. I am not looking at anyone in particular.

We have to acknowledge that a degree of local decision making is required, but, ultimately, health boards and local authorities, working together through IJBs, have a duty to ensure that the needs of individuals are met, and they have to ensure that they have a sustainable service in place.

The points that Mr Rowley put to me are all entirely legitimate, but enabling some of those issues to be better addressed might encourage local decisions to bring more of the work in-house. In some cases, services might have to be brought in-house because there will not be private providers to deliver the alternative services.

I come back to what I said in my earlier answer: that is all joined up in the sense that it must all, ultimately, be paid for. We must ensure that the resource is available to us at a time of intense financial pressure. Mr Rowley just ran through a series of real, tangible pressures that our public services are under. I do not dispute any of those. However, that is a measure of the scale of the financial challenge that we face.

This morning, I attended the meeting of the Social Justice and Social Security Committee, and I told the committee that, after having served for nine years as finance minister through the financial crisis and through the period of austerity of the Conservative and Liberal Democrat coalition, I thought that I had seen challenges in public spending. They were as nothing compared with what I am now wrestling with in my temporary period as finance secretary. The situation is much graver, and I am very pessimistic about the outlook for public expenditure, given what I heard overnight from the UK Treasury about revisions to public spending.

The Chief Secretary to the Treasury told me on Friday that he hoped to stick with the comprehensive spending review allocations for future years. I am now seeing that departments are being asked to make savings immediately. That makes me very fearful for what lies ahead, because if that changes at an English public expenditure level, that will have a negative effect on us.

Any reading of the Covid recovery strategy will show that the big lesson that the Government takes from Covid is the necessity—the imperative—of tackling inequality, and that is reflected in the contents of the programme for government that the First Minister set out earlier this month.

These issues matter in two principal respects, the first of which is the point that Mr Whittle has just concentrated on of changing provision to make a difference to the experience of individuals in order to generate better outcomes. However, there is also a direct relationship to the issues that Mr Rowley has raised with me, which leads me to my second observation. The fact is that all of this work is critical to reducing demand on the health service. If people are presenting inappropriately at A and E, because they are not generally healthy, looking after themselves and so on, that is an interaction with A and E that is unnecessary—if I can use that word. If those people were better supported in their community and their own home, they might be able to avoid that journey to A and E. After all, if they do not make that journey, we have one fewer person adding to the pressure that is already on our hospitals, so it is critical to the efficient operation of our public services.

It might not last.

Well, Mr Fairlie should know me well enough to realise that I am constantly thinking both inside and outside the box. However, let us address a couple of those themes.

The witness that Mr Fairlie cites talked about local taxation. The Scottish Government has legislated to enable local authorities to exercise a workplace parking levy, for example. That has not exactly been universally welcomed by people of all shades of opinion in the Parliament. The concept of a visitor levy is, again, all about giving local communities power to make decisions. We are encouraged to empower local authorities and communities and then we are criticised when we try to do so. Therefore, I do not think that it is a straightforward question.

On the resources that are available to us, we obviously have tax powers that we can exercise. My predecessors have taken decisions on tax rates that have been different from those taken in the rest of the United Kingdom. I support them whole-heartedly and think that the right decisions have been taken. Again, though, they are not universally popular. We have used our tax powers; I cannot do that during a financial year, because the law prevents me from doing so, but such options are available to us. I will have to reflect carefully on last Friday’s fiscal event, and I will consider what it has thrown up in relation to taxes as I determine what the Scottish Government’s position will be.

I do not think so. People might want us to do more on tax than we are prepared to do, but we have to look at all aspects of the fiscal sustainability of individual tax decisions. There is a difference in terms of the composition. If we had used tax powers in the same way that the United Kingdom Government has just done, I could see why such a criticism would be valid. However, we have not done so. We have had a barrowload of criticism for the decisions that we have taken on tax. I consider them to be entirely reasonable and appropriate, but we have had a lot of criticism for making them. I really do not buy the witness’s criticism at all.

I have been an advocate for alternatives to council tax, but there has never been a parliamentary majority for putting any of them into practice. In this parliamentary session, we will undertake work on local taxation in an effort to build wider agreement on what a reform package might look like.

Thank you, convener. I am grateful to the committee for this opportunity to discuss a number of matters relating to our recovery from the Covid-19 pandemic and our preparedness for any future waves.

In February 2022, the Scottish Government published a revised strategic framework that set out our long-term approach to managing Covid-19 and its associated harms. The strategic framework was published as we entered a calmer phase of the pandemic. I am pleased that, for the most part, we have remained in that calmer phase for some time.

Covid-19 might not be at the forefront of everyone’s minds in the way that it was last winter, but the Scottish Government remains prepared to respond appropriately and proportionately to any new wave or variant that could emerge. The strategic framework supports the Scottish Government to manage future threats through adaptations to our behaviours and physical environments, as well as through effective vaccination and treatment. Ongoing surveillance of infection levels and potential new variants will also support our management of future threats.

It is important to note that we are progressing well with ongoing booster vaccinations; people in the most vulnerable groups will have been offered an appointment by the start of December.

I am confident that the strategic framework ensures that we have the necessary resilience and preparedness to meet any potential challenges that we might face in the months ahead.

The Scottish Government’s Covid recovery strategy, which was published in October 2021, focuses on addressing systemic inequalities and supporting those who were most disproportionately affected during the pandemic. The Scottish Government has been working closely with local government and other partners to pursue that agenda, and we are progressing pilot projects in Glasgow and Dundee to target support that is aimed at reducing child poverty.

Since the Covid recovery strategy was published, particularly in recent months rising inflation, the worsening cost of living crisis and inaction by the UK Government have made it even more critical that the Scottish Government focus its efforts on supporting those who are most in need.

The fiscal environment that we find ourselves in presents significant pressures; for example, inflation means that the Scottish Government’s budget is now worth around £1.7 billion less than it was worth in December 2021. Despite such real and significant challenges, the Scottish Government is taking action to help, including by extending and increasing the Scottish child payment to £25 in November; by freezing rents and introducing a moratorium on evictions to protect the roofs over people’s heads this winter; by expanding access to free school meals; by widening the warmer homes fuel poverty programme; and by freezing rail fares until at least March 2023. All that is in addition to the almost £3 billion in support that is already budgeted for and the existing £800 million of relief for business in this financial year.

Recent announcements from the UK Government regarding energy prices are welcome, but they do not go far enough; they certainly do not materially change the Scottish budget position in the current year, and we face a challenging period ahead financially.

We are undertaking an emergency budget review to assess any and all opportunities to redirect additional resources to those who are most in need, to reduce the burdens on businesses and to stimulate the Scottish economy. The Scottish Government will publish an emergency budget review in the week commencing 24 October. Any changes to budgets through that or other measures that we have already taken in-year will be formally set out to Parliament in the budget revision process, as is the standard approach.

I am happy to answer questions.