Chamber and committees

I think that there is an appetite, which is evidenced by the fact that almost £300 million was spent to support that investment. It will be dependent on everybody’s circumstances, which will be different, but the ability to save on energy bills makes a significant difference. The cost of energy is very relevant; individuals will find themselves in a place where that investment could make a huge difference over time to their energy bills and to the quality of their housing and their lives—not to mention the net zero impact. It is an important investment and clearly there is still an appetite for it.

That goes back to the point that I made earlier about looking through that lens. Last year, for the first time, we identified what the corporate costs were across the public sector. That pulled out a number of approximately £5 billion, which has driven the target of £1 billion of savings that we are identifying. The issue is that it is spread across every portfolio in every public body and across Government. Corralling that into one place so that you can see it in a separate virtual pot is an important piece of the mechanics, but it adds another layer of complexity to how you look at those budget lines.

The answer to your question is that, throughout the accounts, the budgeting process is developing to set those corporate cost-reduction targets as part of portfolio budgets. For every portfolio, you will see what has been done previously, what the new budget looks like and, on your corporate costs, whether it is projected that there will be savings. That will be different for every portfolio, depending on the profile, but now that we have the information, we are able to do that.

The pay policy is in place over three years, which is what we are working to, but you are speaking as though spending money on paying public service workers is not public service; of course it is. Half, or more than half, of the budget goes on pay for the person-centred services that people receive, whether that is nurses, doctors, teachers, or police officers. If we are to retain those numbers and hire and recruit to those services, it is important that we pay people. That is precisely what the public would expect us to do in order to maintain the quality of those services.

The 9 per cent is clear and everyone understands that. The negotiations happen with trade unions; each situation is different depending on the circumstances. We have had discussions and reached those agreements in the context of the three-year policy for current pay deals. The policy is clear.

What is important is where the money is spent and the impact of that money on outcomes and services. If we want to compare sets of numbers, it is important that we compare apples with apples. To do so, we need to compare figures at the same point in the process—either before transfers are made or after they are made. That will give a more accurate reflection of how trends are operating. We are very transparent in setting out the transfers and the need for them. We can agree on that. From our perspective, the split between policy and delivery is important, and we are transparent in articulating that. As I said, to compare apples with apples, we need to compare figures at the same point in the process, rather than at different points in the process, so that we can see what shifts have taken place.

That represents less than 1 per cent of the total budget.

The Scottish Government balances our budget every year. There are rules about how consequentials relating to pensions operate, and those funds are transferred from the UK Government. I am not pretending that the process is easy, but the Scottish Government works on a weekly and daily basis to ensure that, when we get to the end of the year, we balance our budget, as we are required to do.

The question is how much is transferred and how that transfer co-ordinates with other work that is happening in that portfolio. Those are important considerations. As we take forward the public service reform agenda, our approach is to recognise that it is more about outcomes than it is about inputs. We recognise that getting budgets in the right place requires them to move between silos. We are breaking down those silos as we focus on, for example, where corporate costs are deployed, how we deploy digital costs across the piece and how we move towards a preventative budget. I can only see it getting more—rather than less—complicated, and we need to work together to understand how best to deal with that. Putting money into portfolio silos and leaving it there is a great way to focus on inputs, but it does not really help to co-ordinate outcomes in a way that breaks down silos.

I absolutely recognise that we want to be supporting that. As I said, when it comes to economic growth and economic activity, we can pull a number of levers. One of them is the investment that goes into the enterprise agencies, the Scottish National Investment Bank and others. I think that that funding is effective when it comes to delivery. We would, of course, like to spend more but that would be a conversation about the shape of the budget in general. There are competing pressures and it is a question of balance.

A lot of the specific underspend is to do with historical issues regarding European structural funds, which were running down.