Chamber and committees

I will certainly endeavour to do that, Presiding Officer.

Kaukab Stewart makes an important point about the management of the public finances and ensuring that we have sufficient resources at our disposal. Sharon Dowey asked whether I would avoid any underspend this year and asked for such underspends never to happen again. There has been an underspend every year since the establishment of the Scottish Parliament, so last year was not really any different in that regard. I will have more to say to Parliament tomorrow about the current financial position that we face. However, one of the advantages of the underspend last year is that I have been able to access resources to deal with the enormous financial strain that we face this year in the absence of resource borrowing powers, which would allow me to borrow to deal with the volatility in the public finances.

On a point of order, Presiding Officer. My machine was unable to connect. I would have voted no in that division.

In relation to Covid spending, the Government has spent in excess of the Covid consequentials that have been allocated to us. There was another comment of the Auditor General that Mr Fraser did not cite. He said:

“My independent audit opinion is unqualified. This means in my opinion, I am content the Scottish Government Consolidated Accounts show a true and fair view, following accounting standards, and that the income and expenditure for the year is lawful.”

I would have thought that that would be quite reassuring for Mr Fraser, as a law-abiding citizen, and would provide confidence that, not for the first time, the Government’s accounts have attracted an unqualified opinion. We have had unqualified opinions for our accounts for every single year that the Scottish National Party Government has been in office. That should be a source of great reassurance to Mr Fraser.

On the point about transparency, the Auditor General said:

“The Scottish Government has continued to strengthen aspects of its governance arrangements during 2021/22.”

We will of course consider all the recommendations of the Auditor General as we take forward our accounting practices.

I recognise the gravity of the financial challenge. I am faced by that every day in wrestling with the Scottish Government’s budget just now. I am dealing with the profound implications of inflation, public sector pay and energy costs, and those implications will be felt by public bodies the length and breadth of the country. Last week—I think that it was on Friday—I met COSLA leaders to hear their views on the Scottish Government’s budget, and my officials followed up that discussion on Friday with supplementary discussions. As I said in my earlier answer, I will set out the financial support for local government in the Scottish Government budget next week.

As Mr Griffin will know, when I set out my first budget to Parliament in 2007, I took decisive action to reduce ring fencing. I acknowledge that ring fencing has come back into a number of areas, but that is largely to assure the Government and, indeed, the Parliament that expenditure that is decided on in Parliament is deployed by local authorities on particular policy priorities. That applies particularly to the challenges that we face in relation to social care, where the Government is allocating substantial additional revenue. However, delayed discharges are at their highest level in our hospitals today, and that is a result of issues in the social care system. Therefore, there are tough issues to be wrestled with here.

Mr Griffin cited the letter from the directors of finance and the point on ring fencing. Another point that the directors of finance made to me, and which is part of the dilemma that we all face, is that they asked for the Barnett consequentials from the United Kingdom Government to be targeted to support the vital services that local government provides.

If I followed that, no extra money would be given to the health service, and I do not for a minute believe that that is what Mr Griffin wants. I have to take a balanced position. I cannot do everything that is asked of me in the letter, because it would be impractical to do so and would starve the health service of resources, and I do not think that anyone in Parliament wants that to be the case.

For all the reasons that I set out in my last supplementary answer to Mr Griffin, the national care service is an important reform to ensure that we can make progress in addressing the challenges, which I think that all parties are agreed on, in the delivery of social care in Scotland. Therefore, the Government will take forward those proposals. They are the subject of consultation and dialogue. We are listening very carefully to what parliamentary committees say in relation to the national care service and we will take forward the steps that the Government has already announced.

The Scottish Government annual accounts provide explanations of all significant variances in the portfolio outturn statements and make it clear that the underspend that was reported does not represent a loss of spending power. The underspend includes more than £900 million of non-cash and ring-fenced budgets, is before allowing late funding adjustments of more than £500 million and makes use of the limited carry forward in the Scotland reserve. The Scottish Government has reported transparently on the carry forward position at the provisional outturn and will confirm the final outturn position to Parliament shortly. All funding is fully utilised in supporting the 2022-23 budget.

First, I make it clear to Mr Fraser—I thought that my original answer had done so, but I will say it again just to make sure that I can make an impact on his presentation of all of this—that £900 million of the underspend reported by the Auditor General relates to non-cash and ring-fenced budgets that the Government cannot spend on other items. It is in relation to annually managed expenditure, which is in the control of the UK Government, and student loan support, which can only be used for student loan support on a demand basis and we cannot redirect it to anywhere else. Those are basic points—really, really basic points—about the public finances, which I would have thought that Mr Fraser might have understood, given the length of time that he has been in this institution.

We assumed, when the budget was passed in the spring, that £450 million would be carried forward into this financial year. That had risen to £550 million by March. I assure Mr Fraser that the underspend that was reported does not represent a loss of spending power in any respect by the Scottish Government.

I agree with that point. The Government has increased local authority funding to the tune of 23 per cent since 2013-14. We have treated local authorities fairly. There is a real-terms increase in local authority funding of 6 per cent in the budgets from last year into this. We do all that we can within the resources available to us to ensure that local government is properly funded.

I am familiar with that report, and I am considering it as I come to take the final decisions in relation to the tax choices that the Government will make and set out to the Parliament next Thursday.

I should make it clear to Katy Clark that, in this financial year, the Government’s budget is fixed; once we have set our tax rates, they cannot be revisited during a financial year. Unless there are consequential decisions taken by the UK Government during a financial year, our budget is locked in. That is the difficulty that I am wrestling with in relation to finding adequate resources to fund the pay claims that we are facing during this financial year.

There is a hard limit on the money that is available this year. Katy Clark raises a completely legitimate set of issues about future tax choices, but, for this financial year, the budget is fixed.