Chamber and committees

First, there is, of course, a dedicated rural affairs, land reform and islands portfolio, but we also recognise that rural affairs interests are supported across a range of portfolios. In certain areas, we have sought to be more effective in getting money out the door earlier through, for example, the basic payment schemes and greening advances.

As for the decision-making process, with a set of circumstances such as those that we have faced this financial year—and, indeed, the previous financial year—we have to look for opportunities to generate efficiencies that can then be returned to the centre to support the in-year fiscal position, particularly to meet emerging pressures such as public sector pay. The particular example that we are considering here relates to the rural affairs, land reform and islands portfolio, but opportunities to generate savings will be looked at across Government. Sometimes that can mean rephasing or reprofiling particular budget lines, but the aim is to generate revenue internally in order to support the in-year budget position to meet challenges.

For example, if you have a demand-led scheme but demand is not what was forecast, that provides a source of revenue that can be redeployed. If there is slippage, perhaps in a capital project, that, too, provides an opportunity for redeployment. It is a continuous, on-going process that is part of the in-year budget management process.

Is there anything that you want to add, Niall?

As that is a technical matter, I will ask Craig if he wants to explain.

I am not in a position to give a detailed answer, but I will ask my officials at the Scottish Public Pensions Agency to contribute to a response to the committee and see whether they can shed any light on the matter.

Thank you. I will ensure that the points that you have highlighted are reflected in the correspondence.

I very much want to thank the committee for its constructive engagement and to thank officials for the work that has been undertaken to get us to a position where we have been able to take the financial update forward. This is a process, rather than an event, and we are always keen to get feedback to ensure that we are presenting information as transparently as possible. It is all part of an on-going discussion and a process of refinements. I am grateful for the committee’s input, and I will certainly ensure that the points that you have highlighted on financial memoranda are relayed to relevant officials and ministerial colleagues.

With your permission, convener—and this also applies to some of the questions that Mr Mason asked—I would be happy to respond in detail in writing when I have had the chance to have further discussions with officials and to look at the matter in some detail myself. The committee has raised an important point that warrants a more substantive response than something extemporised by me at this stage in the session.

First, I want to make it clear that we seek to maximise our capital spend; we realise that it is fundamental to economic growth and supporting innovation and development. Our capital borrowing powers afford us one of the limited flexibilities that we have under the devolved fiscal arrangements, and decisions around capital borrowing are taken very late in the day. That means that we can have the most up-to-date position, reflecting the most recent in-year budget position. We recognise that, with capital projects, there can be slippage and delay for a range of reasons that are outwith the control of any individual organisation or, indeed, the Government.

Niall, do you want to provide a bit more detail on some of that decision-making process?

I am not able to speak about that in any detail. My officials might want to come in on that.

As ever, convener, those are fair and reasonable points. I previously set out in committee the rationale for the approach that you touched on in your question. In the context of the discussions that officials have been having with the committee, we are considering those points in detail in order to meet the ambition for improved transparency as part of our deliberations ahead of the budget for the forthcoming financial year. That is under active consideration and it is being done in the context of the Verity house agreement, given that a number of transfers to local government take place. It is very much a live issue, to which we are giving active consideration.

Clearly, we would not want to do anything to unintentionally harm transparency, but the points that you make are fair and we are considering how we can address those matters and how that will inform the presentation of the forthcoming budget.

Thank you, convener. Good morning. I congratulate the committee on its award, and I congratulate Michelle Thomson on her award. However, having been in front of the committee several times, I know that praise and flattery will not get me off the hook, so I will get on with the matter at hand.

The Land and Buildings Transaction Tax (Green Freeports Relief) (Scotland) Order 2023 provides for relief from LBTT, in part or in full, for qualifying transactions in a designated green freeport tax site. Green freeports are designed to support businesses to create high-quality and well-paid new jobs. The successful bidding consortia are currently developing business cases that will set out plans to establish hubs for trade, investment and innovation, to promote regeneration and to make a significant contribution to achieving our net zero ambitions.

The Scottish and United Kingdom Governments have made a commitment to deliver a green freeport model that meets the needs of the Scottish economy and offers all the benefits that are available to those who are situated in freeports in other parts of the UK. LBTT relief is offered on that basis. It is part of a package of incentives for green freeports and is designed to be equivalent to the stamp duty land tax relief that is offered to other UK freeports, which will ensure that the overall objective of parity of treatment between freeports and green freeports is met.

The LBTT relief supports the wider programme by encouraging investment in specific tax sites on land that is underdeveloped or undeveloped. The legislation enables businesses to start to benefit immediately from the relief when the tax sites are designated, and the relief will be available for up to five years.

I welcome the evidence that has been submitted by a range of organisations in response to the Government’s call for evidence and the Scottish Government’s consultation on the draft instrument, and I look forward to members’ questions.

As you will appreciate, on the specific point about how individual local authorities choose to engage, it would not be appropriate for me, as a minister, to comment on decisions that are properly for them. Certainly, the Government’s broader approach, both on the development of fiscal economic policy and on wider industrial relations, is to have close engagement with our trade union partners.

I ask Laura Duffy to provide some background on the broader engagement that has taken place in the process of developing the proposal.