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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 4 May 2021
  6. Current session: 13 May 2021 to 4 November 2025
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Displaying 978 contributions

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Finance and Public Administration Committee

Financial Memorandum for the Children and Young People (Scotland) Bill (Post-legislative Scrutiny)

Meeting date: 21 June 2022

Daniel Johnson

Graeme, I apologise that the preponderance of my questions have gone to your colleagues.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

I will leave it there.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

I do not think that I was suggesting arbitrary targets or that the timeframe was 12 months. I appreciate that the timeframe is four to five years. You might not want to put a number on it, but if you are going to maintain the health service head count in broad terms, albeit with some change, and if you have that macro figure but are going to protect the half of the increase that is in the health service, other areas will have to be reduced by more than the figure than they increased by. That is an arithmetic necessity, is it not? You do not necessarily need to put a figure on it, but the head count reduction in the civil service will need to be more than the 3,800 it went up by in the Covid period.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

Let me avoid the figures altogether. If the aggregate point is going to come out at 29,500 and some areas are not going to have to return to pre-Covid levels, other areas will have to go further. Is that a statement of fact?

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

Even if we consider spend on employability, it is really only in the past year that that has gone up by any significant amount. Therefore, you have four budget lines which—certainly in the early years—will all probably experience significant real terms cuts. Almost certainly, on aggregate across the five years, skills spending will have an aggregate cut. If you want to drive up average earnings, is that not inconsistent?

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

I understood that, but it is a useful clarification. I guess that the danger is that you fall into the trap of thinking that we have always had the extra consequentials and expecting to have them again in future. I take that point.

On the difference between the OBR growth forecast and the forecast growth in Scotland, I want to unpack what is contained in your forecast. We have had a change. I understand the points about holding the thresholds rather than inflating them, and about the decision at UK level to have a 19p basic rate in future years. However, if we strip those out, it appears that, since December, the commission’s forecast for earnings growth in Scotland has deteriorated. Certainly, it is clear that earnings growth in Scotland is slower than that in the rest of the UK. Can you provide any insight into what changes have occurred since December and what the likely consequences are?

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

Following directly on from the point about future Barnett consequentials, are you confident that the Government’s approach is sufficiently robust? It sounds almost as though it is being too granular and that there is therefore quite a large contingency in those forecast consequentials in future years. Is that the position that the commission has taken or the fear that the commission has?

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

I am merely trying to clarify the choices that you have made, and this is clearly one of them.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

Just to clarify, my assumption was drawn from figure 3.17, where the teal line, which is your latest forecast, is significantly lower between 2021-22 and 2023-24 than the yellow line, which is your December forecast.

10:30  

We all understand the underlying issues with oil and gas in the north-east. Your December forecast included quite a detailed regional breakdown that showed that that trend was also apparent in the south-east of Scotland, a place that we might have expected not to be in the same situation and which we might have expected would benefit from some of the same things that have benefited the south-east of England, such as the financial services industry. Has the Fiscal Commission carried out regional analysis and what does it show? Why are all the regions in Scotland suffering that lag, which seems to be more pervasive than in just the north-east?

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Daniel Johnson

Earnings growth and employment growth are fundamentally underpinned by growth in productivity. Figure 3.13 shows a downward trend in productivity growth since 2010. You state quite starkly in paragraph 3.39 that

“productivity growth has stalled in Scotland since 2015.”

I assume that that is largely tied to falling levels of investment in oil and gas. More fundamentally, you seem to imply that there is an inflection point in this financial year when we will start to see productivity growing again in Scotland. What lies behind that assumption? That almost gives us a hockey stick. I am always slightly concerned when I see such things in forecasts rather than in retrospect.