Chamber and committees

Thank you. I have a final question. I opened with Mr Sim, so I will close with him, before I allow colleagues to ask questions. My question relates to the framework properly reflecting the current economic and political context. What you have said is:

“shouldn’t the Scottish Government set a priority of making Scotland competitive in attracting a working-age population from outside our borders, and stimulating robust economic growth to create jobs and attract them?”

Putting external migration to one side—obviously, we could attract many people from elsewhere in the UK to Scotland—why, do you think, is the Scottish Government not doing that?

Good morning and welcome to the eighth meeting in 2022 of the Finance and Public Administration Committee. The only item on the agenda is two evidence-taking sessions for our inquiry into the Government’s resource spending review framework. The evidence that we gather will inform our response to the Scottish Government’s consultation.

First, we will hear from Mirren Kelly, chief officer, local government finance, Convention of Scottish Local Authorities—who I am delighted to say is attending in person—and, attending virtually, Eileen Rowand, executive director, finance and corporate services, Fife Council and Chartered Institute of Public Finance and Accountability directors of finance. I welcome them to the meeting and thank them for their written submissions.

I understand that the witnesses have no opening statements to make, so I will move straight to questions, which will obviously relate to the submissions.

I note that, with regard to spending, COSLA’s submission says:

“With employability funding especially this has been notified late in the financial year and limited to spending by 31st March.”

Clearly, COSLA is frustrated at getting notification of resources late in the financial year, but how much of that is actually within the Scottish Government’s control? Are Barnett consequentials the reason for the late notification? Is it a combination of the two things?

If there are additional resource implications, one would expect that to be funded from core budgets. I am sure that you would agree that the Government does not want to undertake structural change for the sake of it. COSLA may not agree with all aspects of the proposals, but I am sure that it would agree that the reason for the Government’s measures is to improve the service overall in the long run. The Government may even be of the view that, while there may be short-term disruption, it might be worth it for long-term improvements. Is that not the view that it has, and is that not why it is going down that road? Why else would the Government be doing that if it did not believe that the measures would bring improvements in the long run for the people who require the services?

One of the difficulties is having to disinvest from areas that are, perhaps, not so effective and switch resource. At a time when resources are not increasing, difficult choices have to be made.

I have one final question, which is about how priorities link in with the national performance framework. The submission from COSLA says:

“There needs to be an improved mechanism for assessing how we are reaching the National Performance Framework goals.”

What could, or should that mechanism look like?

Ms Rowand, do you have any understanding of why that was the case? Have you tried to find out from the Scottish Government why that funding arrived so late? I would have thought that, with something so essential, you would be champing at the bit to obtain those resources.

Yesterday, I visited a social enterprise in my constituency, which echoed more or less exactly what you are saying.

About 22 years ago, when I was a member of the Social Justice Committee, we had an inquiry into the voluntary sector, and one of the issues that was raised during that was the problem of “initiative-itis”, whereby funding is provided for new initiatives for one to three years, and, by the third year, the staff of the project end up very nervous about whether the project will survive and spend their time wondering whether they will have to get another job and looking for other pots of funding. Often, good projects are established but are then discontinued. It seems that the situation has not necessarily changed as much as it should have done in the subsequent two decades. Is the SCVO concerned that there is perhaps an emphasis on the new rather than on things that have been proven to work and deliver on the ground?

That is a fundamentally important point. Given that we are in a time of financial challenge, I am not convinced that there will be significant additional funding—let us be realistic about it. However, if the money can be spent more effectively and efficiently, that would be good. I can only imagine how difficult it is for staff—wondering every year whether they will have job after the end of the financial year and having to wait months for the processes to work through. The situation really is unacceptable, so we must address it.

The Scottish Property Foundation’s submission says that

“resources should be directed towards areas of government dedicated to supporting economic development.”

I will put to you the question that I put to Mr Sim earlier. How much additional resource do you believe should be put into that, and where should it be funded from?

Thank you, Liz—your timing was absolutely perfect to the second.

I thank our witnesses for their very helpful evidence. As we have concluded our questions, I suspend the meeting until 10.45 for a break.

It is very helpful for you to put a sum on what you would require. In your paper, you noted:

“That capital review projects further real terms erosion of support for research and innovation over the coming years.”

The Scottish Government had a 9.7 per cent real-terms reduction in its capital grant allocation. How can you ask for additional funding in capital when the only way that the Scottish Government can meet its capital requirements at a time of high inflation is to borrow additionally, almost up to its limit?

Thank you for that response; it is helpful.

Paul Bradley, your submission says:

“This tough environment is preventing voluntary organisations from long term planning, as well as harming financial sustainability and predictability for lenders, and requiring the frequent and resource intensive process of chasing small funding pots at the expense of focusing capacity on service delivery.”

I think that we are all familiar with that situation. You go on to say:

“Ultimately this is hampering the Scottish Government’s ability to address its core priorities.”

In terms of the review, how can that situation be improved?