Chamber and committees

It is just that, in real terms, there will be a decline in education over the next three financial years and then, suddenly, there will be quite a dramatic increase, and that is repeated in a number of portfolio areas. Time is against me, so I cannot ask all the questions about that that I want to ask, but I will try to touch on a number of areas. Colleagues can follow up on some of my questions if they so wish.

Another area is local government. Local government is alarmed and, although you have said that it will have a fair settlement over the years ahead, I do not believe that it would agree with that. How does the static budget—or declining budget, when inflation is taken into account—allow flexibility for local government? Local government spends much of its funding on statutory services. It has to provide those services; it does not have a choice. Statutory services already have a higher proportion of spend than perhaps they did five or 10 years ago, because of the relative reduction in local government resource. That is one point in relation to local government.

Also on local government, if there is greater flexibility—for example, I know that you are looking for public sector workers to be more productive, but perhaps over a four-day flexible working week—how will that impact on other areas of the economy, such as transport? There has been a significant reduction in the number of people who are using public transport, not only because of a lack of reliability. For example, in my area, there is a lack of bus drivers; we have also seen rail disputes. There are issues across the UK in that regard. What would be the knock-on effect on the retail sector if lots of public workers were staying at home?

You have talked about the multiyear estates programme. From reading the document, there seems to be an enthusiasm for selling off surplus public buildings if, for example, there are going to be fewer people in the public sector and more people may be working in a hybrid way or from home. The difficulty for local government will be that, in some areas of Scotland, there might not be much demand for those surplus public buildings, whereas in other areas, such as Edinburgh, there might be significant demand. That would mean that some local authorities would be unbalanced in terms of the resource availability.

I know that that is a fairly convoluted question, but it is about how local government will be able to innovate and reform and, at the same time, cope with those huge changes over a relatively short time.

Iceland has always been socially cohesive, but it was also historically one of the poorest countries in Europe. Independence in 1944, harnessing geothermal power and victory in the cod wars in the 1970s probably had a significant and positive effect.

That was because I am trying to allow other people a chance to come in. Therefore, I do not want to ask about too much.

Also, when businesses put an application in and ask when it will be dealt with, it would help if there was a detailed timescale for that, so that the businesses are not just told “mañana”.

Scotland and the whole of the UK pay significantly more to procure simple, straightforward things, such as road upgrades, than countries in continental Europe pay. Will that issue be addressed? Are we going to look at the procurement costs here compared to elsewhere? If procurement costs were reduced to continental levels, that would release significant funding to enable us to have more projects. How often have people driven along the road, got stuck at road works for half an hour and then found that nobody was even working there? It does not matter what time of day or night people go past, there never seems to be anybody there—or else one guy is in a digger and 10 folk are looking at the hole that he has dug. I am sure that we have all experienced that. I raised it with Stewart Stevenson 15 years ago. He said that it would be looked at, but I am still waiting. Those are real issues that we have to address. Adversity is the mother of invention, so surely this is the time to really address those issues. What focus will there be on procurement? I do not want to be in a situation in which, three or four years from now, we are still asking the same questions but not seeing significant improvement, other than less money being spent on the ground.

Colleagues are clearly keen to come in, so I will ask my final question, which is about the social justice, housing and local government portfolio. I noticed that, in that area, 96 per cent of the increase in spend over the next four years will be on social security. Half of that increase is related to further devolved welfare benefits and half is related to choices that are made by the Scottish Government. Given the paucity of resources and the fact that, for example, the police will face a zero budget increase at a time of rising cybercrime, and that various other areas will have to deal with fixed budgets, is it the best use of public money to spend an extra £1.2 billion on benefits? What will be the impact to the wider economy of that spend and of removing people from poverty, which is clearly what that spend is about?

Yes, but when you talk about private funding, you are not talking about businesses; you are talking about home owners having to invest significantly in transforming their houses.

Thank you for that. I think that we all realise how incredibly complex that is. It is a tribute to you that you are able to produce forecasts as accurately as you do, given those issues.

As inflation goes up, even with increased pay rises, we could end up with significant fiscal drag, which is concerning many people. In figure 4 of your report, you talk about the implied income tax net position. What do you believe the impact of fiscal drag will be on disposable income?

Thanks—I appreciate that. We have many more questions that we could ask, but time is against us and, as Ross Greer has pointed out, the cabinet secretary is waiting to come in. We have another evidence session to begin.

I will wind up the session by formally thanking Dame Susan Rice for all her phenomenal work over the years and her leadership, wisdom and insight, which have proved invaluable to the committee. Like John Mason, I was here at the very birth of the SFC, and it is great to see how it has developed and flourished over the years. I am sure that it will continue to do so.

I will see you tomorrow, Dame Susan, at the Scottish Parliament information centre briefing, which starts at 8 am—with bacon rolls, just for those who are not already sold on the idea of attending. The committee will take a break until 11.25.

Thank you very much for that opening statement.

It is significant that you have very little room to manoeuvre. I think that the committee appreciates that fact, but we will ask questions about the Scottish Government’s choices and the reasons for making them.

First, some outside organisations have expressed an element of frustration about the detail that has been provided. I know that you will want to make it clear up front that this is not a budget but a resource spending review. However, the concern is that we have received only level 1 and level 2 funding figures, and organisations are obviously wondering where they fit into some of the decision making that is taking place.

Thank you.