Chamber and committees

As Mr Bibby will be aware, I have set out an initial round of reductions in budgets, which were explained to Parliament two weeks ago. I do not believe that that will be the last set of reductions that I will have to make because of the enormous financial pressures that we face as a result of inflation and public sector pay.

Currently, I am exploring a range of different aspects of public expenditure, which might be subject to further reductions as part of the emergency budget review and as part of my in-year financial management. That might have an effect on the Government’s advertising and social media costs. I will advise Parliament of what decisions I arrive at on any of those questions in due course.

First, I am delighted to hear that the home of my dear, beloved late grandmother is thriving so well in population terms. I am pleased to hear that news.

I should also say that I spent a bus journey from St Giles cathedral to Parliament with the convener of Orkney Islands Council, Councillor Graham Bevan, who did not miss his opportunity to bend my ear about his council’s financial arrangements. Mr McArthur can be assured that his local authority colleagues are using every available opportunity to advance their arguments.

The funding settlement for Orkney Islands Council is a product of many variables, which are agreed in general with local government. Mr McArthur will be familiar with the fact that such questions are negotiated with the Convention of Scottish Local Authorities. Of course, there are specific elements that relate to islands’ expenditure, such as the special islands needs allowance. Councillor Stockan, whom I also met, and Councillor Bevan both made points to me about such questions. I will reflect on those points as we take forward discussions with local government about the funding arrangements for the next financial year.

I have indicated in a number of responses to members this afternoon the challenges that we face, which I set out openly to Parliament two weeks ago. The effect of inflation on our budget is to undermine its value to the tune of £1.7 billion. That means that there is intense pressure on the ability to deliver public services and to afford the increases in public sector pay that are significantly higher than those that were envisaged at the time of setting the budget.

That is why I, along with my colleagues in Wales and Northern Ireland, have appealed to the UK Government to have an approach to the fiscal event on Friday that meets the needs of these days and addresses the risk that, unless specific action is taken, increasing inequality and a damaging impact on the poorest in our society will be the consequence of the UK Government’s actions.

I am perfectly happy to explore those questions, although I think that the question on the issue of sub-sovereign debt would be outwith the competence of the Scottish Parliament. However, I am happy to explore that question with Mr Sweeney if he writes to me with his thoughts about how that might be done.

I welcome Mr Sweeney’s question, however, because it highlights the need to recognise the limitations of the current range of responsibilities and powers that we have to deal with the crisis that we face. Parliament as a whole needs to engage with the fact that, as we are in a situation in which during a financial year we largely have a fixed budget, unless the UK Government decides to expand public expenditure in England, we have no ability to deal with inflationary pressures or changes in dynamics other than to take money from one area of policy and apply it to another. I wrestle with that dilemma every day of the week just now, and I will have to come back to Parliament about it in the course of the next few weeks.

Although negotiations on local authority budgets are conducted between the Scottish Government and the Convention of Scottish Local Authorities on behalf of its member councils, a range of portfolio cabinet secretaries, ministers and officials have regular contact on key shared priorities with individual local authorities, including Orkney Islands Council. That has included a number of cabinet secretaries and ministers visiting Orkney over the summer, when some met Orkney Islands Council leaders and officials to discuss a range of issues. I also had extensive discussions with the leader of Orkney Islands Council on this matter and others when I recently met the leaders of the three island authorities.

The £300,000 that was allocated to the islands bond in this financial year will now support projects that will deliver on priorities that are identified by our island communities. Those projects will help to inform our future funding requirements so that we can tackle the depopulation challenges across our islands. That work complements the support that is being provided to deliver on “The National Islands Plan”, which will see a total of £8.3 million invested in critical infrastructure projects. That continues our record of delivering significant investment in key island-based projects.

Mr Doris will have heard my statement to Parliament two weeks ago in which I explained the financial constraints under which we are operating whereby, once we have set the tax rates for a financial year and given our inability to borrow for resource expenditure, we are essentially operating on a fixed budget.

There have been spiralling increases in inflation during this financial year. That has resulted in the necessity to settle pay demands at a much higher level than those that we had been expecting. That puts acute pressure on the Scottish Government’s budget, because we do not have the flexibility that the UK Government has, to which Mr Doris refers.

I would like to see the UK Government take forward targeted measures such as an increase in universal credit payments, because that would provide support directly to those who are most affected by the challenges that are faced in the cost of living crisis. That is why the Scottish Government has taken the steps that we have on, for example, the Scottish child payment, which will ensure that families that are really struggling are given the greatest amount of support.

I am very concerned, in reading news reports about what is expected to be in the chancellor’s statement on Friday, that more and more of the measures that are proposed to be taken by the UK Government run the risk of increasing inequality in our society and preferring the interests of those who are wealthy over those who face financial challenges and are in poverty. I appeal to the UK Government, as I have to my colleagues in Wales and Northern Ireland, to bring forward measures that will support those who are hard pressed by the financial crisis.

I begin by extending a warm welcome to Roz McCall to Parliament today.

It is a great privilege to contribute to the debate and to recognise the unrivalled record of service by Her Majesty the Queen and her commitment to devoting her life to the service of her people. In fulfilling that commitment, Her Majesty visited communities the length and breadth of Scotland, the United Kingdom and many countries across the Commonwealth and the globe. On some of her visits, she brought solace and comfort to communities that were hurting; in most cases, she brought much joy. Indeed, on one of her visits to the city of Perth in my constituency, she brought very good news.

During her diamond jubilee in 2012, the Queen granted city status to the city of Perth. The city and royal burgh of Perth was the capital of Scotland from the 9th century until 1437, but city status was summarily removed on local government reorganisation in 1975. The restoration of city status was the culmination of a local campaign that was expertly led by my dear friend and former provost of Perth and Kinross, Dr John Hulbert. The awarding of city status took place on a beautiful day in July 2012 on the banks of the River Tay, when the Queen was presented with the keys to the city and the Duke of Edinburgh was awarded the freedom of the city of Perth. It seemed a pretty fair exchange for the great honour that had been bestowed on Perth.

That morning, I had been on the radio dealing with the prospect of job losses at the Hall’s of Broxburn sausage factory. When I was introduced to the Queen, I thought that she might ask me something about local matters of interest in Perthshire. She rather wrong-footed me, however, by expressing her concerns about the possible loss of jobs at Hall’s of Broxburn, and she wished me well in my efforts to avoid that happening. I never knew whether that was a product of impeccable briefing by royal staff or the reputed keen interest of the Queen in following the broadcast media, and now I shall never know the answer to that question of intrigue.

Although Her Majesty the Queen enjoyed a very long life, her death at Balmoral castle stunned us all. It also meant that all of the arrangements that had been carefully planned over many years to deal with such a situation were put into place. It has been widely recognised that, from the moment that Her Majesty’s cortege left the gates of Balmoral castle to the moment that she left Scotland for the last time, our country paid due, respectful and appropriate tribute to Her Majesty and her deep association with Scotland. I place on record my deepest thanks to all the public servants in Scotland across many organisations and partners who worked with care, precision and commitment to ensure that all of that could be achieved.

Her Majesty the Queen clearly loved Scotland and, in the days after her death, the people of Scotland demonstrated that they reciprocated that love for the Queen.

I understand the aspiration that Mr Rennie sets out. We will engage in parliamentary scrutiny on such points and answer and address any questions that members have on them.

At the outset, I offer the reassurance that the Government is trying to take a set of decisions that minimises the impact on individuals. That will not be possible in all circumstances, but we are trying to take decisions that minimise the impact on individuals and to make judgments about when we think it is appropriate for us to reduce funding with that objective in mind.

The expectations on public sector pay in the budget were at 2 per cent. We are obviously at an increased level, and consolidated salary increases will flow through to future years, which will place increasing pressure on future years’ budgets. We must restate annually the contents of the resource spending review in order to take account of those factors. That puts increasing pressure on the Scottish Government’s budget and, as Mr Gibson highlighted, we do not have the range of flexibilities that we need to expand the size of that cake.

The Government will reflect on the decisions that need to be taken as we look at the contents of the budget, but we believe that it is vital that we sustain the support to mitigate the actions of the UK Government, especially for people in our society who are vulnerable, in order to protect our citizens in their time of need.