Chamber and committees

I have two more questions—well, I actually have loads, but colleagues want to come in. How do you decide on the balance between maintenance and new project delivery? For example, after the 2008 crash, the then Chancellor of the Exchequer, Alistair Darling, cut Scotland’s capital allocation by 40 per cent; that was subsequently reduced to 20 per cent, as you will recall. However, the Scottish Government did actually put resource of some £500 million into capital to try to restore that. At that time, it was said that half of all the money that was available for capital spend went on care and maintenance, so it meant that the number of new projects that were going to be delivered was massively down.

However, as you will know if you drive along the roads in Scotland, for example, or look at other pieces of public infrastructure, such as bridges or whatever it happens to be, there are real concerns that they are not really up to scratch in many areas. We can argue about the size of the whole cake, but how do we decide to say, “Look—we really need to spend X per cent on maintenance before we even think about new projects?” How do we strike that balance? I know that it is a difficult one.

I call John Mason, then Liz Smith.

You are both taking the fifth. That is fine. Thank you very much. I found your evidence really effective and extremely helpful. No doubt a number of the issues that we have discussed with you will come up when we take evidence from the Cabinet Secretary for Finance and Local Government.

12:20

Meeting continued in private until 12:34.

Good morning, and welcome to the ninth meeting in 2026 of the Finance and Public Administration Committee. We have received apologies from Craig Hoy.

Under our first agenda item, we will take evidence from the Scottish Fiscal Commission on its report “Fiscal Sustainability Perspectives: what Scotland’s finances mean for the next parliament”, which was published last week. We will also take the opportunity to explore with the SFC issues to be included in our legacy report for our successor committee.

I welcome, from the Scottish Fiscal Commission, Professor Graeme Roy, the chair; John Ireland, the chief executive; and Claire Murdoch, the head of fiscal sustainability and public funding.

I invite Professor Roy to make a short opening statement.

Okay. So, the proportion of people who are going to be higher rate taxpayers will exceed the proportion down south, whereas it used to be lower.

Sorry—I meant the fiscal drag in terms of the threshold, of course.

You did not touch on capital funding in your opening statement. We are going to be talking about the infrastructure delivery pipeline in the next session, but you say in paragraph 1.50 of the report that,

“In 2023, around half the projects in the 2021 Infrastructure Investment Plan had been affected by cost increases or delays.”

I was first elected in 1992 and I do not remember a time when that did not happen, not just in Scotland and the UK, but elsewhere. Where are we in relation to that particular issue? It seems to be almost built in—not deliberately, of course. It seems that delays and cost overruns are almost de rigueur in infrastructure investment. Is it a serious concern? Has the problem grown? Has it stayed the same? Has it become less of a problem in recent years? Where are we on that, and how do we compare Scotland to, for example, high speed 2, the rest of the UK, or whatever?

You talk about the devolved public sector workforce having some 468,000 full-time-equivalent workers and how that figure has been growing by 100,000 or so under devolution. Some of that is accounted for by the extra powers that have been devolved, but a lot of it is due to the NHS, the ageing population, the need for a larger workforce and so on. People become older and frailer and need more support.

However, in paragraph 2.7, you highlight a reduction in the police and fire services workforce from 28,500 full-time-equivalent workers 12 years ago to 26,675 in 2024-25. Would one not expect that anyway? We went from having eight police boards to having just one, so we no longer have eight headquarters and all of that infrastructure, which meant having eight chief constables, eight deputy chief constables and so on. Is such merging of funding streams in order to be more efficient and have larger overall bodies not what the Scottish Government should do, given that it aims to reduce the workforce by 13,600?

Frankly, I am not convinced that such labels are helpful, because one cannot work without the other. I would have thought that it is always about a team approach.

You started your opening statement by talking about growth, and what you said seemed quite pessimistic. Both the UK and Scottish Governments are committed to growing the economy, but you expect only about 1.1 per cent growth in day-to-day resource spending over five years. Pre-crash, it was an average of 2.9 per cent, which seems like the sunny uplands compared with where we have been for the past 15 or 16 years.

There seems to be a clash. You say in the paper that, as we move forward, the workforce relative to the dependent population will decline because of demographic change and so on. At the same time, we also have new technology. I appreciate that, for folk who are working in social care, it is a lot more difficult to increase productivity than it is in some kind of advanced manufacturing facility. Why do you feel that growth will be stuck at 1.1 per cent? Is there no way to escape that fairly depressing trend?

09:15

::Good morning and welcome to the eighth meeting in 2026 of the Finance and Public Administration Committee. We have three items of subordinate legislation to consider and I intend to allow around 30 minutes for this part of the meeting. We will begin with an evidence session with the Minister for Public Finance on the draft Scottish Aggregates Tax (Miscellaneous Amendment) Regulations 2026. The minister is joined by Scottish Government officials Jonathan Waite, who is the aggregates tax bill team leader, Cara Woods, who is senior policy adviser on aggregates and landfill taxes, and Emma Phillips, who is a lawyer with the Scottish Government legal directorate. I welcome our witnesses to the meeting and invite the minister to make a short opening statement.