Chamber and committees

My next question follows on from the answers to some of John Mason’s questions. Although applying the Welsh model in Wales projects that the Welsh budget will increase, it does not do the same thing for the Scottish budget if we apply it in Scotland. It means that the decline is not as severe, but we would still be worse off than if the current set-up had not been put in place.

When the Scottish Fiscal Commission’s report came out, prior to the budget, everyone was taken by surprise at how significant the lag in income tax growth was in Scotland compared to in England. That is the fundamental driver. Why is that the case? Why is income tax growing more slowly in Scotland than it is in not just the UK as a whole but pretty much every other region in the UK, including Wales? What levers are available to the Scottish Government to address that?

Chair, the witnesses have just touched on resources. If you are going to ask a question about that, I might be better coming in after that rather than pre-empting your question.

Thank you for bringing me in here, chair. I did not want to pre-empt your questions with my follow-ups, which follow directly on from those questions.

Stephen Boyle has quite rightly said in the public domain that it is vital for the Scottish Government to act with transparency in the planned expenditure of Covid-19 money and how that spending is delivered. Indeed, the submission talks about following the public pound. Following on from previous answers, I wonder whether Audit Scotland, too, is doing that. I accept that it might not be about designating people to do the so-called Covid-19 work, but surely you are undertaking certain activities because of Covid-19. A discrete set of individuals or resources might not have been allocated to Covid-19 activities, but you must be able to identify the percentage of work in each audit or in other pieces of work that have arisen because of the pandemic. Are you identifying and tracking that? Do you need to look at what activities you are having to undertake because of Covid-19 to ensure that you can track and manage that work?

I wanted to come back to something that Stephen Boyle said. Perhaps he can repeat what he said in his answer.

I am interested in the delay to the audit work. What is the broad balance? We can understand that there is complexity because you are having to do audit work remotely or with social distancing. There is an inherent productivity issue because of the Covid restrictions. What is the split between that issue and the fact that the nature of the activities being undertaken by public bodies, and the way that they are being funded through extraordinary Covid funding, is making your audit work more complicated? In other words, it is more difficult to follow the audit trail because of the nature of the work. Do you have a sense of that split? Have I missed anything else in my assessment of why audit may be taking longer?

Is your connection okay, Professor Alexander? Should I come back in with a question, chair?

I will leave it there, chair. I have one more question that I may ask later in relation to investment. However, it may be covered by one of my colleagues.

My colleagues have covered the major issues. I want to raise an issue that may seem slightly niche and left field. The shopkeeper in me could not help but look over the figures for the Parliament shop, and I have some observations.

The shop’s revenue was £250,000 in the year preceding Covid, and footfall in that year amounted to around 260,000 visitors. That revenue strikes me as very low. It is important, in these times, that we ensure that the Parliament maximises not just its ability to control costs but its revenue.

I also observe that, in your forecasts, the gross profit margin is going to jump from 44 per cent to 50 per cent. Although 50 per cent is a better profit margin for a gift shop, any forecast that sees a gross profit margin increasing by 5 per cent would make me ask how that will be achieved. I also observe that the forecast does not really account for the true cost of operating the shop—there are no utilities and no hypothecated rent. I suggest that, if you were to add those things on, the shop would probably be running at a loss, given that it is anticipated to make a profit of only £17,000.

Is it sensible for the Parliament to directly manage the shop? Might it not be better to lease or license it? It could be let to a third party operating under a licence to use the Scottish Parliament branding. There are other public sector providers such as museums and art galleries that run very successful shops.

There is a lot there. The broader theme is the question of whether we are making the best use of the visitor shop and whether we could generate more than the 80p per visitor that we seem to be generating with the existing set-up.

I will come on to that point in a moment, but I agree that what we should all be focused on, in essence, is getting more people earning money and getting those people who are already earning money earning more. We can all agree on the need for that to happen, and for it to happen as fairly as possible.

I understand the complexity of the reconciliations: the mechanism of block grant adjustments is simple when we see it on a flow chart, but it is complicated when we look at the different time lags. However, I feel that your answer was more about what happens within a given year, whereas I am really asking about the broad trend and the broad envelope, which will need to be addressed over the next three, four or five years. I recognise that you cannot predict the precise numbers that will drop out of those streams, but the overall picture that is painted by the Fiscal Commission involves placing downward pressure on budget lines that are not social security, does it not?

I am referring to figure 3.19 in the SFC’s report, which presents a crude aggregate picture of total pay growth between February 2020 and September 2021.

Indeed; that is the only reason that I pressed the point. It is highly important.

I am conscious of time, but I have one last question, which is relatively broad. I would like to get the cabinet secretary’s response to Stephen Boyle’s comments, which were issued with the audited accounts last week. In reference to the Covid funding in 2020-21, he said:

“While there is some high level details about how this money was used, the government needs to be more proactive, open and transparent with the provision of this important detail.”

Critically, it strikes me that the budget is a balancing act between business as usual, immediate response to Covid and recovery. That is difficult, and to do it effectively, you need transparency, not just over what you have spent in the past, but on an on-going business basis. As well as responding to Stephen Boyle’s comments, can you say how the Government will track the Covid spend between those three poles?