Chamber and committees

Thank you very much.

Forgive me, Deputy First Minister, but, in my previous life, I spent a long time looking at financial and project plans. If a project or a programme plan was at 20 per cent variance within six months of its being published—here, in essence, we are talking about a variance of 15 or 20 per cent—something would have changed somewhere. You may say that that will not have a significant impact on a programme that is scheduled to cost well over £1 billion. I accept that, but I do not accept that there has been no change and that there is nothing to see.

I am simply trying to understand what has altered in the Government’s planning, thinking and assumptions to result in the projected costs for the financial year undershooting what was in a plan that was published only six months ago. It is not a major point, but I think that something must have changed.

Again, we are talking about a financial year that, in your own estimation, will be incredibly tight. Therefore, understanding how the Government is controlling costs is important. We might be talking about a relatively small amount of money in the grand scheme of things, but such things add up. However, if you are not willing to go into it any further, I will be happy to move on.

I am interested in understanding the risks and the parameters of this budget. There is a great deal of unpredictability. Again, wearing one of my previous hats, I always look at a budget in terms of fixed and variable costs—those that are under our control and those that are beyond it. I have questions on payroll and also on energy and material costs. Very approximately, of the £45 billion of resource spending in the budget, around half—£21 billion, I believe—is going on payroll costs. Do you anticipate that that figure will go up or down in the coming year?

In addition, no public sector pay policy accompanies what we are looking at. I would like to understand whether the £10.50 pay floor that was introduced with the most recent pay policy will continue—or, indeed, increase—in the coming financial year.

I apologise for being very technical, but those are significant organisational and budgetary exposures. Those aspects could be overlooked, so that is of interest the committee, given its remit.

I have one final question; I am happy for you to get back to the committee on it, as I do not expect you to have this information to hand. One of the key points in your introductory remarks was the number of demand-led budget lines being a source of uncertainty. Do you have a global figure for the proportion of the Scottish Government budget that is demand led?

The committee having an understanding of the risk profile and uncertainty would be helpful—thank you very much.

Initially, I want to follow up on the answer that you gave on the cost for the national care service in the coming financial year, which you stated was approximately £50 million, excluding the cost of increasing pay for social care workers.

The current financial memorandum to the National Care Service (Scotland) Bill sets out the set-up costs for the national care service over a five-year period. The costs for the coming financial year, 2023-24, range from £63 million to £95 million, which would be for the establishment phase of the service’s central administration. The running costs for that five-year period would not start to kick in until the five years were almost up. If the plan was to spend between £60-odd million and £90-odd million, and you now say that you will spend £50 million in the coming year, does that imply that there will be a delay in the full implementation of the national care service? If so, what is being held back? What are you rephasing in that plan?

That it is helpful. I will come to energy policy in a moment but, just to round out the conversation on payroll, a number of other costs can be attributed and, again, it is important to manage such things. For example, vacancy rates can have a cost, as they can lead to a supplementation through agency staff, third-party contractors and other outsourced resources. Have you set broad parameters for the use of agency staff and third parties; what is the level of vacancy across the public sector—certainly, in particular, those bits that are directly under your control—and how are you managing those things?

At the risk of continuing a technical line of questioning, I will mention energy costs. Everyone is familiar with the issues around those rising costs. All organisations are facing them, and the public sector in Scotland is no different. What is the total energy bill? What is the exposure in relation to gas in particular? The UK Government is ending its energy support arrangements in April. What will the implications of that be for the public sector? Do you have a broad sense of the public sector’s risk exposure to the volatility of gas prices over the coming budget year?

I understand that any financial memorandum is stated broadly. Members are used to such memorandums not necessarily turning out to be 100 per cent accurate, if I might put it that way. However, it strikes me that the memorandum to the bill was published only six months ago or thereabouts. It implied that there would be costs not just in the coming financial year but in the current one of not insignificant amounts. However, you are now saying that the amount that will be spent is almost 50 per cent of the upper end of the range; it will certainly be lower than the lower end of that range. It just strikes me that—