Chamber and committees

Absolutely, that needs to be delivered. I understand the point that you are making. Part of the answer is that we might bring in information technology staff, for example, who are well paid because of their skills, but that is significantly cheaper than hiring contractors or contracting a third party to deliver those services. That has been a significant aspect of the increased bill for those pay grades, but across the whole budget it has delivered significant cost reductions.

The civil service is now operating on a total operating cost that is to target. That is one of the changes that we are making as we go into next year. Something that adds another layer of complexity, which the committee wants to get its head around, is that, traditionally, the total operating budget for the Scottish Government has been allocated by portfolio, so the budget for the core Scottish Government has been a small part of much bigger portfolios’ budgets. We are looking separately at that, through the lens of the total operating cost, and at setting budgets for that. That means that the Scottish Government core civil service has not only workforce targets but financial targets that have been laid out.

Which other areas?

They are operating costs for the SQA. That budget needs to be reset to reflect the reality of its costs. That is an issue that we need to address.

I think that I am coming back next week to talk to you about that.

We are very conscious of the cost pressures that house builders, particularly SME house builders, are under. There has been extensive engagement with Homes for Scotland and round-table meetings have been held with SME house builders on that. We recognise that a number of legislative and regulatory cost pressures are impacting on the cost of delivering housing units. I look forward, with interest, to seeing the evidence that you are taking on that this week and I will reflect on that before I talk to you next week.

There are different parts to it. If you go through the public service reform agenda, there are 18 workstreams in there. I will not go through them all, but some of that is about core efficiency, whether in estates, procurement, digitisation, automation, and so on. A lot of that is in the corporate space. However, when it comes to looking at the size of the prize, you will see that there is a significant amount about how we do integration more effectively, how we join up services and how we invest in prevention.

The whole-family support work is an example of integration. It is about getting a number of agencies in a local area to work together to understand how they interact with the individual and the family they are all supporting—it involves joining up those services. What do you need in order to do that? We also have a workstream on data sharing, so that the same story does not have to be told multiple times. Different agencies and parts of the public sector are then able to provide support because they have the full set of information on the people they are working with. It also means that budgets might need to move between silos at a local level to best corral the resources and deploy them in the most effective way.

There is a whole range of stuff in there on leadership, culture, empowerment and data sharing, as well as on the corporate cost savings.

As you will be aware, recruitment has been significantly focused on ensuring that we are only bringing in absolutely essential staff, or staff for which there is a cost saving by bringing them in, because we are replacing more expensive contractors or third-party services that are more expensive. There has been a reduction in each of the last two years in the total Scottish Government workforce. This year, the reduction has continued, and we are on target to deliver another significant reduction. I do not have the numbers to hand, but the Scottish Government has fewer staff now than we had at the start of the financial year and we have fewer than we had two or three years ago. That reduction is continuing.

I cannot remember the exact percentage, but there was a significant reduction in the first part of the year. I go through the information with officials every two weeks and look at updated numbers every month. We are on target to deliver another significant reduction this year, which will continue in the next five years. We have committed to that reduction.

I do not have to hand the figure on that underspend, but officials can pull up the specifics of that. Again, what is important is outcomes, and we continue to outperform the rest of the UK in terms of inward investment. We also have strong export growth. Yesterday, I had the pleasure of opening a premises for a Scottish biotech business in Glasgow—a spin-out from the University of Glasgow—with world-leading technology. It is one of many, many businesses in that space, and Scottish Enterprise is supporting its move to new and larger facilities.

That support is there, and it is impactful, but it is important that it is targeted, effective and cost effective, and that we get results from that.