Chamber and committees

Thank you very much, convener. It is a pleasure to be with you again. I want to take this brief opportunity to set the context for the Scottish Parliamentary Corporate Body’s 2024-25 budget bid and to set out some key points.

This is the third of our medium-term financial plans for session 6 and it is aligned with the commitments made in the 2022-23 submission, which focused on setting up Scottish parliamentary services for the challenges of session 6. As with the 2023-24 bid, the key challenges that we face in the 2024-25 bid centre on inflationary pressures and establishing a budget that is fair and affordable and that takes account of continued high inflation.

In summary, the total proposed budget for 2024-25 is £126.5 million, which represents a £8.9 million—or 7.6 per cent—increase on the current financial year’s budget. It is also a £6 million—or 5 per cent—increase on the indicative 2024-25 budget that was advised to the Finance and Public Administration Committee last year.

That overall increase of 7.6 per cent is primarily driven by inflation, electricity prices at rates well above inflation, and increases in office-holder costs due to anticipated inflationary staff costs. Unlike the 2023-24 budget, where we were able to partly offset the inflationary impacts with just a 4.5 per cent increase at a time of double-digit price inflation, with more than 70 per cent of our cost base being made up of staffing—Scottish parliamentary services, MSPs, MSP staff and, indeed, office-holders, who, as you will recall, have been subject to recent reviews—there really are no additional material efficiency opportunities available for the 2024-25 budget that would not compromise our operational abilities, particularly the ability of MSPs to hold the Government to account. However, we are about to consider whether we need to adopt any services contracts at Holyrood in the light of changes in footfall and usage post the pandemic to ensure that we are operating efficiently. That will be considered at a high level by the SPCB during the course of this year.

With regard to MSP and ministerial salaries, I confirm that, since breaking the pay link with Westminster in 2015, we have consistently used the annual survey of hours and earnings—ASHE—as our index, as set out in the scheme. Last year, that resulted in an increase of 1.5 per cent, which was substantially lower than general inflation and all other wage inflation indices applied here in the Parliament and elsewhere. The scheme allows the corporate body to use the ASHE index or such other indices as the SPCB may from time to time consider or deem appropriate. This year, we intend to apply the average weekly earnings index at 6.7 per cent, as it would appear to us that the ASHE index has become misaligned with other wage inflation indices over the past few years, for reasons that we cannot properly understand and that we ourselves are investigating. We might well return to it.

It means, however, that an MSP salary will be £72,195 in 2024-25. Prior to breaking the link with MSP salaries at Westminster, MSP salaries equated to 87.5 per cent of an MP’s salary; as of 2023-24, they equate to 78.1 per cent. It is also worth noting that the Independent Parliamentary Standards Authority, the independent body that recommends salary increases at Westminster, has recommended an increase of 7.1 per cent for MPs in 2024-25.

Moreover, following the last triennial review of the members’ pension scheme, the Government Actuary’s Department—the GAD—recommended an increase in the sponsor contributions to the scheme, and the corporate body has accepted that advice. That is reflected in the 2024-25 members’ budget.

I turn to staff cost provision. For the 2023-24 budget, the corporate body chose to use the AWE index to uplift the staff cost provision in a move away from the basket approach of indexing staff cost provision annually using a mix of the AWE index and the ASHE index, to which I have referred and which appears to be slightly out of alignment. That had been adopted since 2021-22. General inflation was 10 per cent, the basket was 4.1 per cent, and the AWE index was 5.6 per cent at the time.

In selecting the 2024-25 uprating index, the corporate body has expressed a preference to continue with the AWE index for one further year and to avoid the greater volatility reflected by the ASHE index during this continued period of inflationary volatility. Applying the AWE index for staff cost provision is consistent with the index selected for members’ pay, at a rate of 6.7 per cent. That would mean a rate of £156,900 per member. The budget submission includes that assumption.

The Scottish parliamentary service staff budget maintains the staffing baseline agreed in 2022-23, with the 2024-25 budget uprated to take account of anticipated inflationary wage pressures. We have also reflected revised increased My Civil Service Pension contribution rates within our costs for 2024-25.

Following a prioritisation exercise, the total amount incorporated in the 2024-25 budget for revenue and capital projects is £5.3 million. That is a marginal inflationary increase from 2023-24. In our submission, we highlighted a number of major projects in schedule 3 that are under way or are due to commence in 2024-25, such as the on-going building and energy management system, or BEMS, which is driven partly by green issues and obsolescence issues—I referred to that last year—and the corporate systems programme, which encompasses the business-critical applications for finance, people services and payroll. As well as being fundamental, those systems are organisation wide. The projects include the official report digital transformation project, which will replace the system that is used to produce Official Reports and aims to address technical obsolescence, improve editing, production and publishing processes, and deliver efficiencies in the operation and maintenance of the information technology system; Business Bulletin replacement, which aims to deliver a new streamlined Business Bulletin production process and supporting application; and Windows 10 replacement, with support for our current Windows 10 operating system ending in October next year.

The office-holders’ 2024-25 budget submissions total £18.3 million, which is £1.7 million—or 10 per cent—higher than the current year budget. As the committee knows, the corporate body carefully scrutinises the office-holder budget bids and challenges if no clear justification for increase has been given. Above-inflation increases in 2024-25 are driven by anticipated staff costs across all the office-holders and additional functions added to the remit of the Scottish Public Services Ombudsman.

We continue to include a contingency provision, but we have reduced that back to the 2022-23 level of £1 million this year to reflect a widespread expectation of reduced inflationary volatility during the course of the budget year. That was the reason why we built the extra contingency in last year.

That concludes my remarks. Some of that is obviously quite technical and some it is for the record. I thank members for their patience.

I would very much like to pay tribute to Huw Williams and Janice Crerar, who are hugely experienced staff and on whose experience we fundamentally rely as the commissioner landscape grows. They have done a first-class job on behalf of the Parliament, liaising with the various commissioners and assisting in informing the corporate body.

Let me take that away and see what the arrangement is. As it happens, whoever is in charge of cleaning swung by my office this morning to ask whether I was completely satisfied with the cleaning, to which I said that I was. However, I take your point that it is not a case of tidying offices. I think that it would be beyond anyone’s ability to do that, having visited some colleagues’ offices.

Can you illustrate that with a product that you have in mind?

Where there were six sales.

I am sorry—which costs?

Yes, it would be fair to say that that is the view of the corporate body. Further, it would be fair to say that we are of the view that this is something that members should try to wrestle with and resolve in this session of Parliament, because the difficulty could be that a new cohort of MSPs might accept the landscape as they find it and simply seek to expand it further without those considerations and longer-term perspectives being reflected.

Indeed.

I will let David McGill start on that.

I am tempted to answer that question on a personal basis as well as on behalf of the corporate body. I return to the point that the corporate body’s responsibility is to enact the will of Parliament. It is a matter of public record that the Presiding Officer has raised the issue of office-holders with the Scottish Government. Last year, I made a particular point of raising the matter with the committee.

As a long-standing member of the Scottish Parliament who, in my first session in 2007 to 2011, was on a committee that had been charged by Parliament to rationalise the number of office-holders that we had at that time, for which there was an unabated enthusiasm among members in the Parliament, in this session of Parliament, I am struck—as are my colleagues in the corporate body—by the attraction to colleagues of embracing campaigns that will lead to the creation of additional commissioners. That has almost become the de facto or go-to response. The reason that we raised the issue last year in particular was because although we respect the will of the Parliament, we can see that the areas in which we are beginning to generate commissioners, if accepted by Parliament, could make it harder for Parliament to justify not creating commissioners in other areas where one could say that there was a similarity, either in their responsibility or function, and that could lead to an exponential growth of commissioners.

There is a question of democratic accountability in my view as to why we as a Parliament were set up in the first place and whether we are devolving from ourselves to others responsibility for matters.

My working knowledge in whatever walk of life I have been in is that when institutions of that character are created, they invariably grow in remit and in size, and that appears to be the case. Part of that is that as the public becomes more aware of such institutions, more inquiries are made and, therefore, the responsibility grows. As is also the case with initiatives that are being progressed by MSPs, perhaps in relation to matters such as freedom of information, we could, as a Parliament, take decisions that will significantly grow the responsibility of the commissioner to whom that responsibility has been devolved.

There is a big question for MSPs in all this as we look to the future. You will see, with the addition of the patient safety commissioner, which role was approved by Parliament in the past couple of months or so, that the increase in the office-holder provision in the indicative budget for next year is significantly ahead of the inflationary increase that we expect to apply to the rest of the Parliament. The overall cost of office-holders as part of our parliamentary budget is incrementally increasing, so there is a financial aspect and an accountability aspect.

I am sorry—that was a long answer, but I hope that it was helpful.