Chamber and committees

I have a couple of quick final questions. First, going back to the GFG Alliance deal, you seemed to suggest that there was no cost to the public purse and that everything was fine, but the Auditor General’s report points out that £13.5 million of Scottish Government loans were written off during 2019-2020 and 2020-21. So there has been some debt write-off there. The provision for the guarantee arrangement is valued at £114 million. I accept that that is less than it was when you sat before us last year, but it is still 300 per cent greater than it was two years ago. There are things going on, and I am sure that you will have seen the Auditor General’s comments about the volatility of the situation and how things can unravel quickly. Can you give us your views on that?

Thanks. In the end, this is about accountability to Parliament.

It is a higher-than-normal level of risk, is it not, given that the supply chain banker of the organisation went into administration and the Serious Fraud Office is investigating the company because of concerns about fraud and money laundering? Unusually, the auditors that they had resigned, and the finance director walked. It is not just another company; it has been under considerable scrutiny from parliamentary committees, this one included, because there are real, grave concerns about the business model that it operates on.

I am afraid that you cannot get away with mentioning Prestwick airport without Willie Coffey wishing to come in with a question, so I invite him to put his point.

Thank you. For us, it is not just about the £52 million but about the governance arrangements, the outcomes, the whole way in which it operates and whether there is any displacement effect, for example.

Yes. I do not think that I was suggesting that people are not working hard, permanent secretary; I was asking whether we are prioritising, whether the strategy is right and whether the leadership is there. Many of us remember the Christie commission, which had a full-scale agenda for reform involving early intervention, doing things differently and investing at the right time in order to have the most effective outcomes. Much of that remains underutilised. To quote the Auditor General again, I note that he has spoken at various times about the “implementation gap”. The stated aims are very worthy, but the question that we are bound to ask is what is going on out there on the ground.

We are short of time, so we will move on to questions from Craig Hoy.

The reason why that is important is not least that, as we reminded you last year when you had just arrived in your post, permanent secretary, it has been on-going since 2016. We were promised whole-of-public-sector consolidated accounts in 2016, and here we are in 2023 at stage 1. In his report, which we are discussing this morning, the Auditor General says:

“The continuing absence of a devolved public sector consolidated account means it is difficult to assess the overall health of Scotland’s public finances at a time of greatest need.”

There is quite an urgency—this is quite imperative. Will you reflect on that after today’s session? I do not sense the urgency that we think is necessary to be applied so that we can get a full picture of what we own and what we owe, which is the expression that the Auditor General has used.

I move on to another area, which is capital borrowing. Back in 2018, I think, the then chief financial officer—it was not you, Jackie McAllister, but one of your predecessors—was able to provide to the committee a list of assets that attracted capital borrowing. Is the Scottish Government able to provide a list of underlying assets for which it uses capital borrowing today?

Thank you. We have two or three more critical areas that we want to cover before the session ends. One of those is public sector reform, which I think Alison Cumming alluded to a few minutes ago.

We know that, following the resource spending review, last May or June, an outline of public sector reform priorities was set forward by the Government that spoke about

“New approaches to public services (such as the development of the National Care Service)”,

“Reforms to public sector capacity and pay”,

“Efficiencies for the public sector, including further use of shared services?and efficiencies in the management of the public sector estate”,

and

“Reform to Scotland’s 129 public bodies.”

What progress have you made with that agenda?

The main business this morning is consideration of the Auditor General for Scotland’s section 22 report on “The 2021-22 audit of the Scottish Government Consolidated Accounts”, along with his briefing on “Scotland’s public finances: Challenges and risks”.

It is almost exactly a year since we held our previous session on this subject, and I am pleased that, this time, all the witnesses are in the room with the committee. I am pleased to welcome the permanent secretary, John-Paul Marks. Alongside him from the Scottish Government are Colin Cook, director of economic development, Alison Cumming, director of budget and public spending, and Jackie McAllister, chief financial officer. Welcome to you all.

We have a range of questions to put to you, but, before we get to them, I invite the permanent secretary to make a short opening statement.

On that positive note, I draw this morning’s evidence session to a close. I thank the witnesses—the permanent secretary, Colin Cook, Jackie McAllister and Alison Cumming—for their input. We did not quite get to some areas because of time, but we might follow those up in writing, if that is okay, and I think that you have undertaken to look at some of the issues that we have raised in the session and come back to us. I thank you very much for your time and your contributions.