Chamber and committees

Agenda item 1 is an evidence-taking session with the Minister for Public Finance, Planning and Community Wealth on the draft Budget (Scotland) Act 2021 Amendment Regulations 2021. I welcome to the meeting Tom Arthur, who is joined by Scottish Government officials Niall Caldwell and Scott Mackay, and I invite him to make a short opening statement.

Thank you. You talked about the NHS and mentioned that the autumn budget revision allocates £834 million to the health budget for Covid-19 response. However, that is reduced to a net increase to the health and social care portfolio as a whole of £473.2 million. Do you believe that the transfers—which include £292.6 million to social justice, housing and local government to support integration, school counselling services, carer’s act, free personal and nursing care and the living wage—fulfil the spirit of why that money was allocated as consequentials in the first place?

Professor Roy, I would like you to elaborate on what Professor Mitchell said. You said in your submission:

“The lack of attention to delivery means that the Christie Commission has become almost an idealist document in the eyes of some rather than a useable guide for delivering public service reform in practice.”

Why is there a lack of attention to delivery?

You mentioned capital, and we understand that there have been huge increases in material and labour costs at rates that are higher than inflation. Given that, how is the Scottish Government planning its capital investment? Because of the changes, does it look as though we will get less for the same amount of money? Given that our capital budget’s buying power is decreasing, is the Scottish Government looking to increase its capital budget in order to do the same with more money?

So reach is an issue, although there are pockets where things are happening. Professor Roy, where are we doing well? What pockets or areas can we learn from at this point in time?

Time is against us, folks, but I will take a brief question from Daniel Johnson.

Good morning and welcome to the 10th meeting in 2021 of the Finance and Public Administration Committee. We have received apologies from Michelle Thomson, and I welcome Alasdair Allan to the meeting as her substitute. As this is the first time that Dr Allan has attended the committee, I invite him to declare any relevant interests.

I am going to ask a couple of questions about the impact on economic growth of issues that are currently prominent in the news; in fact, I saw the Prime Minister answering questions on them in the news this morning.

In the hour prior to the meeting, we had a significant discussion about skills shortages with our budget adviser. Skills shortages are acute in many sectors, and there is huge divergence across Scotland—we acknowledge that. What additional resources will the Scottish Government invest to address those shortages? Which sectors are being prioritised? Is there a focus on geographic areas of the economy? In some areas, there is a surplus labour pool whereas there is a chronic shortage of labour in other areas. In economics, there is always the question whether the people should be moved to the jobs or the jobs to the people. What is the Scottish Government’s view on that, given that, when we consider the demographic future of Scotland, even over the next decade, we see that some local authorities will have significant population growth? For example, there is projected growth of 8 per cent for Midlothian, whereas there is a projected 4 per cent reduction for the Western Isles. What is the Scottish Government’s approach to that key issue?

Thank you very much for that opening statement. In time-honoured fashion, I will start with some questions before I go round the table.

The committee received 46 submissions in response to its call for evidence, and the cabinet secretary will not be surprised to learn that, although there were myriad calls from organisations for additional expenditure, the same organisations were much more coy about exactly how much they were calling for and, indeed, whom the Scottish Government would or should ask to pay for that expenditure. Often the responses suggested that any benefits from such expenditure would be long term but the costs would be much more immediate.

We have also had Labour politicians seeking a quadrupling of the Scottish child payment at a cost of £272 million a year and Conservatives suggesting that the Scottish Government could, if it so wished, pick up the tab for the £20-a-week cut in universal credit at a cost of £461 million a year. My simple question is this: how much room does the Scottish Government have for manoeuvre and what are its priorities in the coming year?

We have talked about demographics, skills and jobs. The Government has a young person’s guarantee, but it is facing a reduction of 60,000 workers in the 16 to 64 age group between 2020 and 2026. What does the Government do to focus on the 55 to 67 age group, for example. They have a lot of skills and experience, and many of them are very reliable. How will the Government get back some of those people into the workforce or get them retrained?