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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 23 July 2025
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Displaying 3539 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

That is certainly helpful. It is a lower figure than what I and—I am sure—others have heard. Colleagues may wish to pursue that further.

I want to talk about the capital and fiscal framework. It has been a very difficult year in that the capital allocation from the UK Government has been reduced by £185 million—obviously, with inflation, that figure is higher.

When we asked questions with regard to the capital and fiscal framework, the response was that the Scottish Government has

“disproportionately constrained borrowing and reserve powers.”

Since 2016, inflation has been 39 per cent, but the Scottish Government is still working with the same kind of figures that it had all those years ago. Have you had any indication from the UK Government about when it would be willing to review the borrowing figures, for example? Inflation is 50 per cent higher than it was in 2016—perhaps even 60 per cent or 70 per cent higher. What on-going discussions have you had, because that is clearly having an impact on the Scottish Government’s ability to manage its finances?

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

Okay. Behavioural change is another issue that is very important in relation to future Scottish Government policy and thinking. As you will know, the Scottish Fiscal Commission told us that it believes that, although the higher additional rate of tax would raise £30 million on paper, it would raise only £3 million in reality because of behavioural change. The Fiscal Commission emphasises that that change would be more people not working as hard, as opposed to people with more than one address moving their tax affairs south of the border.

However, in your response you said that the Scottish Government had considered the issue and that the

“study found no evidence of significant behaviour change, including cross-border migration, as a result of our move to a more progressive tax system.”

How does that sit with the comments of the Scottish Fiscal Commission, which says that 90 per cent of that income from a simple additional penny will be lost? That is a very dramatic loss for a small increase, yet the Scottish Government seems to be saying that it does not see that happening.

In previous meetings with the committee, you have suggested that the Scottish Government is very aware of behaviour change. Where are we on the issue? It clearly needs further exploration.

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

I am just wondering if there is any way—

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

I just wanted to clarify that.

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

That will be next year.

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

Of course.

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

Thank you for that brief opening statement. As is traditional, I will start with a few questions; we will then open out the session to colleagues around the table. My first question relates to one that I posed in the chamber, to which you responded on Thursday, about our estimated overspend. When you gave evidence three weeks ago, I believe that the overspend was between £200 million and £500 million. Work has obviously progressed to reduce it to around £100 million. First, how have you managed to achieve that reduction? Secondly, what steps are being taken to try and eliminate it altogether between now and the end of the financial year?

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

I was really keen to get that on the record. I know we talk about always having to balance the budget. People might think that we can just kick things into next year.

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

Colleagues may wish to pursue that further.

The committee has raised a number of issues about taxation. For example, we asked when the Scottish Government plans to publish a discussion paper about tax and spending choices. The response that we got was that the rationale for that document has changed and the United Kingdom Government’s mini budget has gradually been unwound. What is the rationale? Is it because of volatility at the moment, or are there other factors to consider?

Finance and Public Administration Committee

Budget Scrutiny 2023-24

Meeting date: 7 February 2023

Kenneth Gibson

ACS is also a social enterprise. The cross-party group on the circular economy is going to visit it. I asked the company about ex-offenders and was told that the level of productivity is excellent. The company would not mind at all if the whole workforce was made up of ex-offenders because they are able to deliver the product that is required.

I have a question about the private finance initiative and public-private partnerships, which placed a significant annual financial burden on the Scottish Government when it came into office in 2007. I understand that interest rates going up has had a significant impact. What impact are increased payments having on the Scottish Government and local authorities?