Chamber and committees

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?

You are saying that there should be “a significant increase”—that there should be much more. How much more, and what does “significant” mean? Are you talking about 5 per cent, 10 per cent or more? Given that there has been, as I mentioned to Mr Sim, a significant reduction in the Scottish Government’s capital allocation—9.7 per cent in real terms—where will we find those resources? If the financial review is to look at things in the long term, we must be able to attach numbers or percentages on what we are talking about. The phrase “significant increase” does not mean anything to me. Statistically, a significant increase could be 1 per cent or it could be 10 per cent or 20 per cent. What do you actually mean, and how should it be funded?

I do not think that I will be able to pin you down much further. However, you mentioned enhanced borrowing powers. That is something.

Your submission mentions the prediction of a significant rise in non-domestic rates income over the next few years. A number of colleagues and I raised our eyebrows when we read that. You say in your submission:

“This implies an expectation of rateable valuation uplifts for commercial properties which may not materialise as the economy adapts to the post-Covid era, particularly if there is a reduction in the number of NDR producing commercial properties as buildings are changed to alternative uses.”

How do you see the market going? Do you feel that the predicted rise in non-domestic rates is achievable? Is it realistic, will things stay much the same or will they deteriorate? What does the SPF feel the position is and how would that fit into the Scottish Government’s framework?

Perhaps the review needs to be more ambitious in that context.

I have taken up enough time and, obviously, I need to let my colleagues in.

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.

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?

We are now at the end of February and the fund is going to start from April, but the Scottish Government still says that there has been no consultation or meaningful engagement. That is echoed by other devolved Administrations. Why would they be saying that? If there is going to be constructive engagement, why has it been left so late—to the 12th hour, if you like?

My understanding is that the £800 million covers all three devolved nations, so it is £450 million for Scotland.

Again, I find your answer very positive, but my concern is that, up to today, with the UK shared prosperity fund about to launch in a matter of weeks, those organisations have not been kept up to date. Obviously, they have to be able to fund projects and they worry that there will be gaps and breaks in funding. Can you assure us that that will not happen?

A local authority chief executive brought a question to me. He is keen to know how you anticipate levelling up will influence other local authority investment decisions, outwith the levelling up funds and the UK shared prosperity fund.

Concerns have been expressed that, unless levelling up becomes a cross-cutting policy, regional inequality will not be addressed. If two or three UK sites are deemed suitable for a specific type of investment—I was going to give an example, but I will not mention it just now unless you specifically ask me to—what weighting will levelling up carry? For example, will a priority 1 area always be approved over a priority 2 area? In the first disbursement of levelling up funds, five of the eight projects were in priority 1 areas and three were not. How will we ensure that the money goes to where it is most needed?