Chamber and committees

I want to follow up on your point about the structure and composition of the income tax base in Scotland. In response to a question from the convener, you discussed the particular issues around the intermediate rate and how that works. You said that research had been undertaken. Could you point the committee to that research? This is a pivotal but underexamined point. Are there things that we should be looking at in relation to that issue?

Emma Congreve, I have a question for you about addressing child poverty, which is one of the explicit objectives of the review that is being undertaken. We also have statutory targets. Given that it is such an explicit and overarching objective, will you provide some context for how we are proceeding against those statutory targets and whether we are on track to achieve them, even with doubling the child payment?

Sure—but you do accept this, though. I understand how we got here; it is a matter of reconciling the budget from this year into next. What if we had not got the information that you have just provided orally, that there was a gap? In future years, we should be aiming not to require that narrative to reconcile one year’s budget moving into the next year’s budget. Is that a fair comment?

I have two things to say about that. First, I understand the how. Secondly, it is not about the information that you have provided, but is about how the situation presenting that information is being managed. That is the critical difference. I hope that minister accepts that it is a good illustration of the point that Audit Scotland and others have made that it is incredibly difficult to track and manage from the budget through to announcements through to outturn through to consolidated accounts.

As somebody who has run a business, I recognise and am very familiar with the difference between budget forecasts and cash management. However, when they are so far apart, it always causes concern, and that should be investigated. Do you recognise that as reflecting the broader point from Audit Scotland? That follow-through is the important point.

The level of delta was about £600 million—that is what we get if we add £98 million to the £511 million—which is 15 per cent, crudely, and that is quite a big variance between the budget and what you are saying the actuals will be.

In a similar area, examining the context again, I think that the whole committee was struck by the Scottish Fiscal Commission forecast of employment growth and wage growth, and what that was going to do for the medium-term outlook for income tax revenues and therefore the block grant adjustment. It looks as though, within the next five years, we will receive around £400 million less than we would do under the Barnett formula. The other aspect that sometimes gets missed in the commentary is our social security commitments, so the totality looks like a shortfall of about £700 million.

Do the documents that have been produced thus far have sufficient focus on that medium-term issue? Is there sufficient analysis of the linkages? That shortfall is not just an outcome; potentially, levers are available that could impact wage growth and the number of jobs in the economy. Are those sufficiently examined in the documentation that has been published so far?

Perhaps unsurprisingly, I will pick up on comments from both the convener and Douglas Lumsden.

I am most interested in the answers that you submitted to the committee’s second question. The convener asked you a little about the evidence that you alluded to in your answers. A number of comments and submissions have questioned whether the three top priorities that have been identified are sufficient. I do not think that anyone has questioned whether it is right for those priorities to be there, but questions have been raised about whether they fully capture the picture. In particular, with regard to the third priority, which is

“• Securing a stronger, fairer, greener economy”,

that one bullet point is doing an awful lot of work.

If you were to add one or two bullet points to that list of priorities—obviously, one would not want to add dozens—what would they be? Likewise, I would be interested to hear what you think an analysis of the drivers might look like, to supplement what you have said about the use of the SIMD as a data source.

I am looking again at COSLA’s answer to question 3, which talks about the need for recognition of the long-term pressures on public services. A comprehensive spending review, which is essentially what this process is, is not about simply mapping out how you intend to spend money over multiple years; it is also a point for reflection on how effective your spending has been in the past.

I wonder if you are saying that there is insufficient recognition not only of the role that local government plays in making things better across the three priorities but of the fact that underfunding of local government is making those things worse. Is that a point that you want to make? If so, are there any particular examples that you want to pull out with regard to where the financial situation in which local government finds itself makes those things better or worse?

Does Eileen Rowand want to add anything?

Does Eileen Rowand have any final comments before I hand over to colleagues?

That link between the planning system and productivity in the economy is often overlooked.

After making that comment, I should probably advise members that my wife is a planning lawyer. That does not prevent me from railing against the planning system when I am at home.

I just did a quick word count of the resource spending review framework document, and I was surprised to find that “jobs” appears only once, “employment” appears only twice and “productivity” appears only once. Do witnesses agree that the framework and, once it is produced, the review should probably feature those words a few more times than that? It is a slightly flippant question but I want to put it to you.