Chamber and committees

I look all the time, as do other finance ministers. I am here in a temporary capacity, but I have had to look very hard at commitments in this financial year and at how we are spending money, because I have had to find money.

As I announced to the Parliament, I have taken £1.2 billion out of predicted expenditure within Government. I have gone to different parts of the Government and said, “Those measures can’t go forward. I’m going to have to pull that money out. You’re going to have to do without this or do without that.”

That has been done in an abrupt sense because of the financial challenges of this year. However, we carry out periodic spending reviews in which we review provisions that we are making and things that we are funding.

Let us take, for example, a programme such as early learning and childcare. In the course of the 15 years of this Government, we have substantially expanded early learning and childcare. When we came to office, the level of early learning and childcare provision was about 425 hours a year, and we have put that up to 1,140 hours. We have done that on the basis of the early intervention advice—all the evidence shows that the earlier that we engage children in good, high-quality early learning and childcare, the better their educational, personal and health outcomes will be. We have made that choice and invested in it. If we had a spending review tomorrow, I am very sceptical that we would come to the conclusion that we would no longer do that. However, for other things that we do and are committed to, we might say that there is a time limit to what we can afford for those priorities, and we might change them.

The active purpose of a spending review is to determine what more we need to do. A spending review also has to take into account changes in the population. I am making a deadly serious point about the increased number of elderly people in our society. There are a lot of very fit, healthy and energetic older people in our society but, inevitably, there will be people who become frailer as they age. There will be more of those individuals, and they have to be supported by public services—ideally in their own homes but, on some occasions, that might have to be in an acute hospital setting that, by its nature, is very expensive to support.

To be honest, I feel as though I am living in a perpetual spending review, because we are wrestling constantly with all of the elements of challenge that you have put to me. When I talk about the public service reform agenda, which I spoke of extensively in the budget statement in December, that is us actively challenging the way in which public bodies are operating, with the objective of delivering greater efficiency.

I appeared before the Economy and Fair Work Committee yesterday, and I was challenged on some of the spending envelopes that are available to enterprise agencies, for example. Of their own volition, those spending envelopes challenge the existing way of working, as they require savings to be made to ensure that organisations can live within them. In the health service, the pressure of increased demand and increased pressure from pay settlements force a requirement to constantly review and challenge the efficiency of how we operate.

There is another fundamental element of thinking, which is the continuous work to deliver, for example, the Christie principles, with which Mr Mason will be familiar. In essence, those operate on the presumption that the earlier that we can make an intervention, the better it can be and the more it will help us to avoid acute interventions. However we badge them, acute interventions are expensive.

I do not think so. The numbers are increasing week by week. We are not at the end of the programme; we are in January and still have the best part of two and a half months to go. We are trying to make it as easy as possible for people to access opportunities, with clinics widely available across the country.

I accept that meeting the cost of travelling somewhere else is quite difficult for people in low-income situations. That is why we are taking all the practical steps that we can to support people in those circumstances.

I cannot give a definitive explanation. For example, the uptake rate for front-line social care workers is 63.2 per cent. There are other categories for which the figure is slightly lower.

Much of the reason for that can be about convenience of and access to services. Some of it can be because people performing those roles might have to take time to access those services when they are under pressure to fulfil their social care tasks, which is obviously quite a conundrum for individuals. Those people are on low pay and have difficult dilemmas about how they spend their time.

I am dealing with cash, and local authorities are getting £550 million more next year than they got this year. Whatever way you want to dress it up, that is an increase. That enables us to sustain our delivery of the type of interventions that Mr Whittle is raising with me.

I do not want to sour the atmosphere this morning, but we come back to hard choices here—

I assure Mr Whittle that we look constantly at how we can intervene early to proactively improve the health of the population. There are many different ways in which we are trying to do that. We encourage people to carefully manage their health, to exercise and to take all the necessary precautions that they can to maintain their physical fitness and their general health and wellbeing. There is a range of areas of activity and interventions across Government, local government and the third sector.

Mr Whittle raises an issue that is certainly important and that is not only pandemic-related. We should, in general, be attentive to and focused on how we can improve the health and wellbeing of the population. So many of the Government’s public messages and many of our policy interventions—whether on the minimum unit pricing of alcohol, the banning of smoking in public places, the exhortation to exercise or the daily mile—are all part of that agenda.

I will not sit here and say that there is no more that we could do. The Government is very open to dialogue with colleagues in Parliament about how we can maximise that work.

Obviously, we take a range of steps to try to enhance productivity. A lot of what we do is associated with, for example, investment that we make through the university research channel. Our universities have responded positively over a number of years to our appeal to them to engage more closely with the wider business community to collaborate on business and economic research. We are now seeing much higher levels of collaboration and co-operation, which will in part help us to answer the question on productivity.

Our wider investment in skills is designed to do likewise. Obviously, we are operating in an incredibly tight labour market, which is putting additional pressures on the work that we can undertake to ensure that the needs of the business community are properly and fully reflected in the support that we make available to ensure that businesses have access to the productive skills that they require. However, I acknowledge that that is an on-going and significant challenge that we have to face.

Work on the four-day working week pilot is being undertaken under the budget lines on fair work. We will take forward work on the four-day working week pilot as part of the 2023-24 programme. That will obviously be part of the wider agenda of improving the productive capacity of the Scottish economy, on which the national strategy is focused.

Yes.

I have been struck—without wishing to single out Michelle Thomson—by some of the questions that have been put to me on particular areas of interest. If the committee has aspirations for the information that it would like to see or any detail that it would like to have available to it, I will willingly consider how we can most positively respond to that.

We know already from data that the percentage of women-led small and medium-sized employers in Scotland has reduced from 20 per cent in 2015 to 14 per cent in 2019. That is an issue of real concern to us, and it prompted Ana Stewart’s review. We also know from other data that females in Scotland are about half as likely as males are to be early-stage entrepreneurs. The data already tells us that, hence the action that we are taking.

I would not want the committee to feel that we do not have the data to prompt the action that we need to take, such as the review, because I think that that data exists, and I have placed it on the public record today.

I am certainly happy to take away the questions on data and to respond to the committee. Some of those issues might be part of what Ana Stewart ends up recommending. That is speculation on my part, but I think that it would be sensible for me to wait to see what Ana Stewart produces and then to reflect on the issues that you are putting to me in the context of our response to her.

I will highlight our experience in relation to the point that Mark Logan made to the committee about the health of early-stage entrepreneurial activity in Scotland today. I attribute that to seeds that were planted pretty close to 10 years ago, when I took a decision to invest in Scottish EDGE, which has created a vibrant entrepreneurial community.

There was a lot of risk involved in that. When I was being advised on what I should consider when supporting such a scheme, I was properly advised of the degree of risk involved because of the likelihood that there would be business failures and reputational risk to the Government as a consequence. However, my view was that that was a risk worth taking. What has it done over all those years? It has created exactly what Mark Logan said to the committee.

That was not always the case—10 years before that, there was substantial concern about early-stage entrepreneurial activity in Scotland. I think that we largely arrested and resolved that problem by taking appropriate decisions about eight or nine years ago.

The challenges that we now need to focus on—many of our other measures, particularly those around the Scottish National Investment Bank, are supporting this—relate to scaling up business activity when we have the necessary investment capital to enable new-start businesses in Scotland to flourish and become much more significant contributors to the economy.