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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 20 November 2025
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Displaying 1300 contributions

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Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

First, regarding the underspend, we are confusing a number of different issues. The bulk of the underspend was due to the final phase of the winding down of European structural funds. That addresses that point.

We are now moving into the budget-setting process for next year and I can give an absolute guarantee that economic growth is central to the Government’s mission. It is one of the First Minister’s four priorities and we absolutely recognise the centrality of skills provision in that agenda to enable us to drive growth across the economy. That will absolutely be given its place in any discussion about the allocation of funds in the budget process.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

Exactly.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

Let us explore that issue, because it is important. Let us look at the health and social care budget, which involves the biggest transfer. When it comes to the health and social care environment, the whole thesis is that it is cheaper, more cost effective, better for the individual and better for outcomes for people to be moved through the system into social care. To some extent, the reason that that does not happen is that the funding is not there for that. If we look at the health and social care budget in the round, we can see that it is more cost effective to have that money in the social care environment than it is to have it in the health environment. In order to recognise that balance, the funding is in the same portfolio.

However, the reason for the transfer is that the delivery of social care takes place in the local government portfolio. Part of the issue is that, if we were to keep those aspects of spend completely separate, that would create restrictions on spending on social care, which would affect our ability to invest to the extent that we need to in order to free up beds in acute hospitals. That is a concrete example of the policy being in one place and the delivery being somewhere else, and the need for the relevant budgets to reflect that.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

Yes—if we spread things out over 365 days, it represents about three days.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

That is what the policy is based on. Negotiations with each of the unions take place in that context. You need to reflect the fact that inflation will be higher in some years, and it will not necessarily be 3 per cent each year.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

The overall picture is that the cost of increased national insurance contributions to the Scottish public sector is about £700 million, and the amount of money received from the UK Government is about half of that. Money has been transferred to portfolios to cover those costs, including everything that the UK Government added in to support that—which was barely half of it—and additional funds that the Scottish Government has had to find to help with support for those costs.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

Yes, there was an increase of £246.8 million. That includes the annually managed expenditure provision for future national health service and teacher pension costs, which is obviously not available for day-to-day spending. At £141.9 million, AME is the biggest part of that figure. Under Transport Scotland, there is an extra £78.7 million for Scottish Rail Holdings, a non-departmental public body, for the lease costs of existing rolling stock—again, that has no impact on Scottish Government discretionary spending. There is a transfer of £24.1 million within the student loans budget line, which reflects updated estimates for student loan capital and capitalised interest requirements. That is another technical issue that does not have any impact on Scottish Government day-to-day spending.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

I will defer to officials on the technical aspects of that. Pensions are usually a complicated subject. They are affected by a range of factors.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

Indeed. Thank you for mentioning that.

Finance and Public Administration Committee [Draft]

Subordinate Legislation

Meeting date: 11 November 2025

Ivan McKee

We are very clear on this. The way in which we traditionally do budgeting—we have been doing this stuff for a long time in the public sector—does not necessarily lend itself to an environment in which there is money moving between silos and to prevention and so on. I recognise that and I am happy to work with the committee on how we address it. Indeed, workstreams 5 and 6 are all about preventative budgeting and how we configure budgets.