Constitution, Europe, External Affairs and Culture Committee

Meeting date: Thursday, June 9, 2022

Official Report 648KB pdf

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Scottish Government Resource Spending Review

Item 2 is the Scottish Government resource spending review. I welcome to the committee Kate Forbes, Cabinet Secretary for Finance and the Economy, and Angus Robertson, Cabinet Secretary for the Constitution, External Affairs and Culture. I also welcome from the Scottish Government Kirsty Whyte, team leader on the resource spending review, and Penelope Cooper, director of culture and major events. I thank them all for coming to the committee.

I will open with a question for Ms Forbes. Our submission on the spending review highlighted the need to reappraise the contribution of cultural activities to wider societal benefits, including health and wellbeing. The committee agreed with the evidence from the Convention of Scottish Local Authorities, which stated the need for a whole-system approach. To what extent have you factored culture into the review as part of a whole-system approach?

It is great to be able to join the committee. For me, that question goes to the heart of one of the opportunities in the resource spending review.

We have talked at length over the past few years—certainly since the Christie report was published—about the importance of preventative spend. However, preventative spend requires reform. In essence, it requires us to be able to move budget lines over the longer term knowing that, if we invest up front in certain areas—such as culture, the environment and a few other examples—we ultimately relieve pressure at the more acute end. Over an annual budget process, that can be challenging to do. A resource spending review allows us to consider a three or four-year timeframe and try to shift that.

I emphasise that the resource spending review is the beginning of the process. It is not the final budget for subsequent years, but it sets out spending parameters for us. I am sure that we will get into the discussion about some of the challenges that we face right now in the spending review, particularly in the culture budget lines. However, the review allows us multiyear reform. The fact that we have worked extremely hard to protect the culture lines—albeit in cash terms rather than real terms, because there is no way round the fact that inflation is eating our spending power—demonstrates that we are serious about trying to shift the balance.

On the back of Ms Forbes’s answer, I will ask Mr Robertson a question about the cost of living crisis and what is happening with inflation. I am interested in the national performance framework data on participation in cultural activity, particularly the lower participation of people from more deprived areas. Do you have any view on how we could increase participation, given the challenges ahead?

That is an apposite question, because it is a consideration for not only the Scottish Government but National Museums Scotland and the National Galleries of Scotland, whose trustees I met yesterday. That is one of the matters that we talked about, and the trustees made observations about the changes that they have seen over the past 25 years. There has been a change towards a much broader representation of people attending the national museum of Scotland and other museums. However, there is still a gap to be bridged.

I echo what my cabinet secretary colleague said. Embarking on the resource spending review approach will encourage all of us to ensure that we think about those things. One of the potential ways to deal with times of constraint is to increase the number of people of all backgrounds who attend and use our cultural institutions. How do we ensure that there is more school participation in museums, galleries and other cultural institutions, which could help to increase the attendance numbers of children from deprived backgrounds, for example?

Those considerations are very much on our minds in the Scottish Government and on the minds of the institutions, which see it as part of the task in the years to come. We will work collegiately to try to work out how we can help and how they will be able to manage to do it themselves.

I have a general question for Angus Robertson first. The Scottish Parliament information centre briefing with which we have been provided shows that there will be an estimated real-terms fall of 7.8 per cent in your budget between 2022-23 and 2026-27. Within that, the funding for culture and major events will fall in real terms by an estimated 4.7 per cent. You will know well how scarred the culture sector, in particular, has been by the pandemic. The committee has done a lot of work on funding in the sector. There is a major concern, particularly in the more organic, informal parts of the sector, about funding. I would like to get your response to that predicted cut in funding.

Getting through the Covid period has been an immense challenge not only for that part of the cultural world but across the whole cultural world. It was, I think, the second-worst impacted part of the Scottish economy. For people working in the cultural and arts community, it was an extremely testing time and I am proud of the level of resource that the Scottish Government made available to individuals and cultural organisations to ensure that they could get through it.

Now, we are faced with the resources within which we will have to live in the years to come and we will have to work very closely with all parts of the cultural community to ensure that we are able to protect and foster it as best we can, given those constraints. Whether one is in a smaller, organic, community-based cultural organisation or involved in a very large project that requires a lot of funding, everybody will be looking at the bottom line and will try to work out how they can manage, given the resource constraints that exist. We will all have to be innovative within the means that are at our disposal to ensure that we are able to deliver the level of cultural provision that we all want to see.

Historic Environment Scotland has a 2022-23 figure of £61 million, which is decreasing to £48 million in 2026-27. Why is that line in the review?

I underline the distinction that my cabinet secretary colleague made between a resource spending review and a budget—they are not the same thing. That is point 1. Point 2 is that Historic Environment Scotland is an organisation that is significantly better funded in global terms than other parts of the portfolio, and it is fair to say that everybody has to play their part in making sure that we are able to live within our means.

I am the first to acknowledge that HES is an organisation that has particular responsibilities. The specific nature of the estate that HES has to look after is an area of significant challenge.

Point 1 is that this is a spending review and not a budget. Point 2 is that this is the beginning of a process of working with all organisations, including HES, to work out how we can manage through the next years. We need to be imaginative about whether there is the potential for additional and parallel funding streams—I am extremely keen to explore that area—so that, we hope, not everybody will have to deal with the constraints that the resource spending review points to, as an envelope. I am highlighting the point that it is not a budget projection.

Is one of the reasons that the HES figure is decreasing to do with increased visitor numbers? Is the Government grant, as it were, decreasing in the hope that visitor numbers will go up?

Yes, that is certainly part of the consideration. Committee members will realise that all our institutions that have a high throughput—a high number of visitors—have in recent years seen that income fall off a cliff. I do not have the HES numbers at the forefront of my mind, but I can share an example that I can remember. Yesterday, I was at the national museum of Scotland. Before Covid, its annual visitor numbers were 3 million, and in the past year, it managed to recover that figure to 1.5 million.

That is an illustration of the fact that there is still a way to go, but there is a huge opportunity if we—I say “we” in the royal sense, meaning the institutions, Government and everybody else that is involved in the culture and arts sector—can give people confidence to go back to museums, galleries and events. We should do what the convener highlighted, which is to make the most of the untapped and thus far not-included parts of the population who have not been able to make best use of things. Doing that will have an impact. I hope that for those whom the sector is an income stream, doing that will put them in a better financial position than they would have otherwise been.

I will follow on from Donald Cameron’s question. I take your point about the hope that visitor numbers go up as we recover from the pandemic, but I am concerned by the properties that Historic Environment Scotland manages that are not reopening. The discussion paper asks what will happen to those properties. Should we let them face managed decline because of climate change? They are part of our history and culture. You say that we should not worry because it is only a spending review and not a budget. Is that a suggestion that capital investment might flow to Historic Environment Scotland so that it could repair and keep those buildings fit for purpose?

I am not saying that there is no reason to worry. I care passionately about our heritage—as do all the members of the committee, I suspect. Our built heritage, much of which is very old, is facing environmental degradation. That leads to instability and dangers, which lead to the requirement to maintain and support castles and other old buildings and all the rest of Scotland’s built heritage. That was going to be a challenge with or without a resource spending review, and would have been a challenge if we were sitting here discussing the budget line, which we are not.

09:15  

I acknowledge that there is a major challenge for Historic Environment Scotland in general, because of the nature of the estate and the nature of the decline in the built infrastructure, so we will have to work very closely together to work out how we can maximise the resources that HES has, from us and from elsewhere, to make sure that we can protect our historic sites around the country. To stress a point that Kate Forbes and I have made already, I say that those issues are at the heart of discussions with cultural organisations, trade unions, trustees and so on. Those conversations are happening because of information that we now have from the resource spending review.

It behoves all of us to be as imaginative as possible in working out what we can do to protect the built heritage in Scotland, with the resources that we have in constrained circumstances. I am the first to acknowledge that it will not be a simple task; it will not be easy not just in a financial sense, but in relation to all other considerations, given the size of the estate for which HES is responsible. We could probably spend the whole evidence session just on HES and the nature of the challenge that it is facing. It is absolutely at the top of my inbox and is an area in which we in the Government need to work with our agencies and arm’s-length external organisations to ensure that they can do what they are supposed to do.

Thanks for that. This is about the buildings and land, as well as the staff, so thinking about those budget lines is critical.

It has been said that this is about the whole Government responding. When we had the Cabinet Secretary for Health and Social Care at committee, there was a lot of talk about social prescribing, as the convener has said. One thing that has come out in relation to the resource framework is local expenditure on culture. Evidence from Audit Scotland said that, if we look at the local government benchmarking framework data, we see that culture and leisure services have taken the biggest cut—almost 30 per cent—over the past decade. In the local government budget, how will we fill that gap? There is a need for social prescribing, including using local community arts facilities. Who will pay for that, given the huge pressures on local authorities? Can the finance secretary comment?

That is an excellent question. Again, I will not sit here and say that the outlook is anything but challenging. I have been open and honest that there is a challenging outlook across the board. The only way to achieve our objectives on social prescribing, on preventative spend, on protecting culture and so on, is to ensure that we are not working at cross purposes in the public sector landscape. We need to be as good as possible at joined-up thinking.

You will know that the local government budget lines that we have published are at level 2, which means that you do not see all the transfers that go from the Scottish Government to local government. Some of those are very substantial, including those for education and social care. However, a host of other lines across portfolios are transferred, which I know sometimes frustrates the Convention of Scottish Local Authorities. We are working with COSLA to look at how we can remove ring fencing from more of those lines. The challenge then will be that certain funding will not necessarily deliver the aims that we intend. There is a fine line between the Scottish Government determining funding for purposes including culture, leisure and so on, and giving maximum freedom and flexibility to local government.

Angus Robertson can speak more about how things join up from a policy perspective; my job is to ensure that thinking is joined up from a financial perspective. There is more that we need to do; the resource spending review provides us with a framework for doing that, because it does two things. First, it boils things down to our core objectives and asks us to ensure that we are actually achieving the objectives, and it asks the wider public sector to get better and more flexible at working together to achieve aims. That applies across public culture bodies, but it also applies across Scottish Government and local government. We must ask where we can be more joined up, rather than working at cross purposes.

There is the view through the other end of the telescope, which is of cultural organisations and institutions coming forward and saying that they have something to offer in this space. That can and, I hope, will come out of the exercise. We are having to rethink how we can deliver priorities across Government, which will be done by working in partnership with organisations. Sarah Boyack is absolutely right to highlight how important local government is in that, but it is also about what cultural organisations do.

I go back to my example of the meeting at National Museums Scotland yesterday and asking its trustees what they are thinking about. Our museums—they are not all in Edinburgh; they are in various parts of the country—lend themselves very well to providing services that social prescribing can offer. There are other institutions across Scotland that can do it, as well. That means that institutions will have to think about how they can make services accessible and understandable to practitioners who would prescribe them. Committee members will remember my evidence session with Humza Yousaf, at which we began to explore what we will need to do next to ensure that people who are likely to want to use social prescribing know what facilities are available to them.

That is why we have exercises such as the review. It is not an unforeseen consequence—it is actually at the heart of the matter and makes everybody ask where we need to be more innovative. It is not necessarily about cash or constraints; it is about asking what we can do differently to ensure that we use the resources of our museums, galleries and so on to fulfil that purpose.

I appreciate that. Are we at the point at which we need a strategy to pull things together so that people know what will happen next and the process is accelerated, given the points that the finance secretary made about the Christie principles? The evidence that we got from University College London included mention of the importance of access to the arts for children and people who have mental health issues, and use of the arts to reduce physical decline in older people.

We are working together on the matter. I am happy to give Sarah Boyack comfort on that; officials in the culture directorate and others are discussing how to take all this forward.

I took the opportunity to highlight something that should not be lost in all this: there are actors other than the Government, so we need to make sure that we involve all of them, and we need to do that at pace.

This goes back to the first question on preventative spend. Whenever I set out a budget or a spending review, all the focus is on lines that decrease. However, if we are serious about preventative spend—for example, in relation to what Sarah Boyack touched on and ensuring that we are investing up front with a view to reducing pressure on acute care—it is inevitable that some lines will go down if other lines are going up.

That shift requires much more mature debate among politicians. As I have said in the Rural Affairs, Islands and Natural Environment Committee, members know what the debate would be like if I were to shift budget from, let us say, acute care to investing in parks, our environment or our culture.

This is as much about Government being scrutinised about getting it right as it is about having a more intelligent general debate about the issues that Sarah Boyack has touched on. That is the only way that we will get through the next few years, which will be challenging.

I look forward to seeing the strategy and I hope that it is produced soon, and not far into the future.

Ms Forbes mentioned that the shift is about a step change in attitudes. Although we have all accepted that the Christie principles are the right way forward, progress has been really slow. The spending review figures are at level 2 because of inflationary pressures, so it would not be tenable to go further at this stage. The review is also outcomes focused. How will you measure the outcomes on preventative spend, wellbeing and the Christie principles?

The review is intentionally outcomes focused. We have prioritised certain areas. You have heard me say what they are, but I will repeat them. They are tackling child poverty, transitioning to net zero, resilient public services and economic recovery. Three of those were included in the budget. We added resilient public services to the spending review because when we boil down priorities we see that there are areas in our public landscape that might not obviously lend themselves to being in the other three priorities, but we fund them because they are important.

We already have metrics in place to measure outcomes. The resource spending review is not independent of, for example, the tackling child poverty plan, which sets out clearly what we measure. That runs through the spending review. For example, the employability line in my economy and finance portfolio is going up because it is funding commitments that we have made in the tackling child poverty plan. We know what our metrics are for transitioning to net zero and we have set out measures for economic recovery in the Covid recovery plan.

That is how we measure outcomes. The spending review is about trying to align inputs with the outcomes that we have set out. Normally, in a budget, we start with the inputs—we start with the money that is available and we try to squeeze as many commitments as possible into that funding. In the review, we work backwards from our commitments and priorities.

That requires a lot of innovation. The culture sector has led the way in demonstrating effective innovation: think about commitments and objectives that I have set out on innovation and maximising value to the public from our assets, and think about efficiency. The culture sector can teach the rest of the public sector a lot about how to do that well.

I have a supplementary question about innovation. When Mr Yousaf was before the committee, we talked about how to ensure that there is buy-in to social prescribing and spending to save, not just in Government—which there clearly is—but in agencies that deliver healthcare, not least the health boards. What work is being done to ensure that there is, in health boards, the cultural change that would facilitate that?

Forgive me: I should probably have mentioned health boards in my reply to Sarah Boyack about the partners that are part of the process. I go back to my telescope metaphor. Regardless of which way you look through the telescope, you are going to work back from the individual, to who thinks that an individual needs intervention or support in a form that has not conventionally been prescribed. That will involve a number of organisations—national Government, local government, health boards, the culture sector and individual general practices. There are probably other links in the chain that I have not mentioned. Everybody will need to play a part. Sarah Boyack’s point on strategy was well made. For me, it is important to have confidence that all the links in the chain will play their part.

We can have as many strategies as we like, but social prescribing is relatively new, in terms of adoption of successful models that have made it happen. We are trying to introduce it as quickly as possible. However, making it work will involve a lot of organisations, institutions and—at the end of the day—individuals.

In the evidence session with Humza Yousaf, we talked about GPs in the Western Isles, for example, taking out their little contact books to tell patients the organisations that are available that they could make use of in social prescribing. We have to make sure that social prescribing is available everywhere and not just in some places. I acknowledge that a lot of links are needed in the chain to make it work and that there is a broad geographical spread. We need to make sure that it is available to all, because healthcare should be there for everybody, everywhere, at the point of need.

The point is well made that this is something that we need to get on with. However, there is also awareness that if it were simple it would have been done already. A mixture of pull and push will be required to make sure that it happens. To go back to the conversations that I was having yesterday, I note that people are very aware of that and are turning their attention to how they can play their part.

Those have been interesting responses from you both on the prevention question. It is difficult to see, though, within the RSR, exactly how that preventative approach is being driven through. You talk about culture and about changing how public services are working, but it is hard to see a budget line shifting within health towards culture or wellbeing or whatever.

Is part of the issue about the timescale that the budgets are addressing? It is hard to show the impact of preventative spend within one year; it is probably very hard to show it within three to four years as well. Is there something about needing to take a longer-term look at this, as we have with wider strategies? How do we then frame that within the short-term budgets that we always have to look at, including the RSR?

It felt challenging enough setting out a four-year spending review at a time like this, so setting out anything longer would be really difficult. However, the four-year period has allowed us not only to set out spending parameters but to have some very important conversations internally. As you can imagine, the process for getting to this publication is not simple.

We took a very different approach to the spending review than the approach that we normally take to budgets. A budget process, internally, is normally a case of telling people what their allocations are—based, presumably, on last year’s allocation plus an inflationary uplift—and asking them how much they can achieve for that budget. With this, we said that before we get to the numbers, let us look at outcomes, at the need for reform, and at the post-Covid, post-Brexit landscape in relation to what we want to achieve. We started with those cross-ministerial discussions about outcomes and then built the budget around that.

There is a limit to that, because you still have to maintain public services. That is why I worked extremely hard to try to protect budget lines—in cash terms, I accept—across the board, but you will also see a particular focus on the core objectives. That is about starting the process. I hope that subsequent budgets will reflect that priority. I hope that future settlements—in other words, in advance of next year’s budget—move in a more positive direction than we think. One would hope so, because we must remember that this spending review is based on the United Kingdom Government’s spending review of autumn last year, when inflation was 3.1 per cent. It is now 9 per cent and, based on Bank of England forecasts, it is going up to 11 per cent.

I assume that the UK Government will have to take inflation into account, so there might be an uplift, although that uplift might not translate into spending power, because it would accommodate just the inflationary uplift. However, in that event, we will continue to invest along the lines of our objectives.

As you have heard more times than you can count, my appeal is that, when we get to that point, we have the sort of intelligent debate in the Parliament that nearly always happens in committees. Let us accept that, if we are serious about preventative spend, that will mean budget lines moving. You might see acute services releasing some funding to elsewhere, because we know that, ultimately, that reduces the pressure on the acute line.

I am not sure that I have much to add to that. The logic is sound, but making it work in practice is the challenge and we will have to be mindful of that. This will be the subject of the committee’s deliberations, as part of which the cabinet secretary and I will come back on a regular basis to look at whether the switch is beginning to happen. If we can see some bite or progress being made on those things, that will give the committee the confidence to say at what point a particular strategy or approach, which is certainly being pursued, is working. When will we begin to see that happen? That depends on how quickly we get up and running with doing some of those things.

Another observation that does not necessarily make things easier is that some things might take longer to change than some other things do. I do not know which those might be and how long they might take, but that echoes the point that Kate Forbes was making about having a mature debate about some of those things. If we are agreed in general terms that this is the best way to go forward—and I think that there is large-scale consensus that it probably is—we have to find our feet by working our way through the process. I know that I am committed to making it happen.

As I have said to the committee before, I am very interested in any ideas or pointers that you and other colleagues on the committee have about how we ensure that the Government thinks about how it can make some things work faster and some things work in different ways. Are any areas being missed as part of the process? It is one of the models of how the Scottish Parliament is supposed to be working. In that sense, we are a collegiate whole, which is trying to make sure that we are able to deliver, particularly on big cultural changes in how we do our business.

For example, do you see a role for a future generations commissioner to take that very long-term view about wellbeing and investment, whether that is in culture or wider wellbeing?

I would not rule anything like that out. We need to be open to suggestions of how we make sure that we understand things as well as we can and that we are doing everything that we can. I would need to know more about the proposal but, as I said a moment ago, I am open to suggestions about ways in which we can ensure that we are leading the change that we know is necessary.

I have a couple of specific questions. One is about national cultural events. We are all looking forward to the world cycling championships coming to Scotland next year. Looking at the marketing for that, it is noticeable that there does not seem to be a contribution from the UK Government to an event that will still largely be seen as a GB sporting event. Can you give us some background on why that is the case? Has that been a conscious decision?

You have raised a question before about the Scottish Government playing a significant role in funding that from a public sector point of view. I would need to write to Mr Ruskell about where we are with UK Government funding in relation to that.

I would say, in general terms, that a great deal of work is going into the world cycling championships. The committee will be aware of this, but people watching the proceedings might not be: the event is the first example of a world cycling championship bringing together all the different cycling disciplines—I think that there are 13; please do not ask me to name them all—and it will take place at venues throughout Scotland. It is unprecedented in scale—I think that I am right in saying that it is of the order of the Commonwealth games. It is a huge event. A major part of the considerations around it involve how it is organised and how it is funded in these constrained times. However, an awful lot of thought is also going into what the societal benefits of such an event should be and what the event will do to make more of us use our bikes and change our attitudes to health and wellbeing. There are cash questions—absolutely—and I will write to you with the latest statistics on them. However—and this goes to the heart of the points that we have been making—there are health and wellbeing considerations that cannot be enumerated in cash terms.

The Scottish Government and local government are constrained in the tools that they have to raise revenue. One tool that could be available to national parks and local authorities would be a visitor levy. I am interested to know what your thinking is on that and how such a levy could be used to invest in cultural assets and visitor experiences. I imagine that, for example, the hundreds of thousands of people who visit Skye each year would probably not baulk at paying a couple of pounds each to support car parks at the fairy pools, better toilet facilities or investment in cultural heritage on the island. What is the Government’s thinking on that? In these straitened times, how do we get visitors who are enjoying Scotland to make that contribution to our communities in a way that can help them to thrive?

I can give you an update on the visitor levy, and Angus Robertson might want to add something on the culture side.

Skye is an excellent example of the point that Sarah Boyack was making about bringing together community, local government and Scottish Government. With a little bit of investment in infrastructure and a requirement to raise revenue from parking facilities and so on, the infrastructure has massively improved, as has the visitor experience and the experience of locals, and there is now a revenue stream for the local community that it can invest in things such as, for example, the community bus that it has bought. That kind of thing is not necessarily covered in the resource spending review, but it is the smaller pots of money that can absolutely unlock community empowerment.

We are committed to introducing a visitor levy, and I set that out in the letter to local authorities about the budget that has just passed. We said that there were two caveats: we need to consult with industry; and we are conscious of the impact on the post-pandemic situation of the tourism industry. The visitor levy has to be a feature of the fiscal framework review that we take forward with local government. We have stated that the levy would be local. Local authorities, communities and businesses could use it to release a bit of funding for greater investment that would improve the experiences.

The bottom line is that we are still committed to introducing the levy along the lines that we have talked about, taking into account those two caveats.

If I, as the MSP for Edinburgh Central, can join the MSP for Skye in talking about Skye, I will say that I am strongly in favour of the visitor levy. Such levies are the norm in parts of the world that have significant tourist numbers. As people who travel, we are used to that, and I am perfectly content to make a financial contribution to the places that I visit to ensure that the visitor experience is everything that it can be and that the quality of life and the public services of the people who live in that place are as well supported as possible.

Obviously, this issue gets to the heart of the debate about empowering localities to make appropriate decisions for their locality and the extent to which there is national guidance around what are the good things to be thinking about in that regard. No doubt, we will be talking about these issues at greater length at another time, but I think that the literally millions of people who visit places such as Edinburgh will have little to no difficulty in paying the kind of levy that they would be paying in any other capital as part of their overnight costs. I think that that revenue stream could be transformational in many ways. However, getting maximum benefit from such a funding stream will involve local decision makers having innovative ideas and focusing on the right areas.

09:45  

Kate Forbes talked about increased UK Government public expenditure. Does she accept that there is a tricky balancing act in that regard, because increased UK Government public expenditure will also fuel inflation, which means that although it would be a benefit in cash terms, it could be problematic in real terms?

Yes and no. There is a principle there, which I understand. However, on the other hand, right now we are eating into our own budget to a greater extent because the UK Government’s spending plans have not been updated in light of inflation. I think that it is inevitable that inflation will have an impact on UK Government capital initiatives and it might even have an impact on things such as pay policy. There is no avoiding the fact that citizens are struggling with the cost of living and that inflation is having an impact on spending. My difficulty is that our most recent information on UK Government spending plans came last autumn. It would be really helpful if we could have updated spending plans on which I could build a spending review.

We already have a bit of a challenge with different forecasters. The most recent forecast from the Office for Budget Responsibility was in March, which was on the cusp of the war in Ukraine, and the Scottish Fiscal Commission’s most recent forecast, which is what we base our figures on, came out last week. The point that I am getting at involves the different timescales that we are looking at. It is inevitable that the UK Government will have to update its spending plans but, at the moment, all that I have to go on is something that is about nine months old.

I understand and accept the principle that you have touched on, but the UK Government will be contending with the same inflationary impact that we are, and it would be enormously helpful to know how that has changed its spending plans, which it will inevitably have done.

I will perhaps open up the issues more widely. On the issue of the potential for increased visitor numbers to ameliorate some of the cuts to cultural organisations, has there been any assessment of whether that is a realistic proposition, given the impact of the cost of living crisis on consumer spending, which, in this case, is not driving inflation?

That issue shows why we have the right priorities in the spending review. With regard to our response to the cost of living crisis and the requirement to tackle child poverty, we have, for example, funded a fairer social security system. We are proud of our commitment to increasing the Scottish child payment and we have increased the employability line in my economy and finance portfolio in order to help more people into work. All those things are designed to try to alleviate some of the cost of living pressures—we cannot alleviate all of them, because we do not have control over things such as energy. We know that, if we can raise people out of poverty or prevent them from falling into poverty—that is, essentially, what you are talking about in terms of the cost of living crisis—that will reduce pressure on public services. Further, as I discussed with the Finance and Public Administration Committee on Tuesday, we know that those people will be more likely to spend, too. There is a balance to be struck in relation to targeted funding and the people who are likely to spend as opposed to those who are likely to save.

I am trying to carefully articulate the point that if we target our spending at those who need it the most and who are more likely to spend it, that not only protects them from poverty or takes them out of poverty, which is the intention, it also reduces pressure on public services and has an economic boost, because consumers are spending.

I will add to that. Maurice Golden has thrown a pebble in the pond. When I talked before about the visitor numbers for the national museum of Scotland being at 1.5 million rather than 3 million, a light went on for me—I do not know whether it did for anyone else. Given that we have not seen the full return of international visitors, it seems that we are seeing that domestic visitors have more confidence. We may call it a staycation, or it may just be people not travelling very far to go to different cultural institutions.

That gives us hope that part of the small-c cultural change that there has been because of the Covid pandemic is that people are more open to exploring what is on their doorstep. Perhaps there is an opportunity in that for us all in realising that that phenomenon is happening, and that it brings societal advantages if absolutely everybody is able to make use of cultural institutions. I thank Maurice Golden for asking the question in the way that he did, because it has made me want to understand that situation a bit better. It should not just be a passing fad; there is a way of keeping that change while also attracting people to come back. We are all beginning to see more international visitors on our streets, and they are very welcome. The question is what we can do to ensure that people who have previously not visited cultural organisations and institutions close to home are indeed doing that.

Incidentally, people were queuing outside the national museum of Scotland yesterday before it opened, which I thought was a tremendous straw in the wind. Walking past, I could hear that there were international visitors, but also a lot of families and people who were clearly from here or not far from here and wanted to wait in the rain on Chambers Street to go to the museum. That is a good sign. There is something in Mr Golden’s question that is definitely worth better understanding.

Thanks for that. I have a specific question for Angus Robertson. As you will be aware, one of the initiatives that is facing a funding reduction is the culture and business fund Scotland, which faces a 33 per cent cut in funding for 2022-23. It makes funding, which is matched by business, available to cultural sector organisations, so that cut is a double whammy for the cultural sector. Could the cabinet secretary explain the rationale behind that funding cut?

My colleague Neil Gray has been dealing with that matter, and internal communication is circulating on that. It would probably make more sense for me to write to the committee, because I am sure that Mr Golden is not the only member of the committee to want to understand the background to all that.

However, I make the general point that, over the coming years, funding constraints will impact organisations that do good work. Would I wish it to be so? No; I would far rather that we did not have the constrained circumstances that we have. I underline this point as we come towards the end of the evidence session, because it is important: we as the Government have to live within our means, because this Government does not have the normal levers at its disposal that other Governments do, such as the ability to borrow. Would I wish for us to be able to maintain our spending commitments as had been envisaged in less constrained times? Absolutely. Will issues come along where people, quite rightly, want to know whether the appropriate decision is being made? Yes; that is a perfectly legitimate approach to take, but I acknowledge the fact that difficult decisions will have to be made.

One of the challenges, which are also opportunities, on which we will have to be as good as we can be in Government is, if there is a traditional funding line that has supported a good organisation—Maurice Golden has highlighted one—how we ensure that there are other, parallel funding streams that might be able to bridge the gap. I am not necessarily saying that that is the case in the instance to which Maurice Golden referred, but we need to ensure that we get maximum value out of the resources that we have in order to maintain and support the organisations that are operating. However, I commit to writing back to the convener on the specific case so that Maurice Golden and colleagues can have better insight into it.

That is reasonable. The spending review, which we are discussing, does not go into the detail of Mr Golden’s question, so we look forward to getting that response.

We have focused rightly in this evidence session on how cultural organisations can continue to do what they are already doing. However, business as usual is clearly not acceptable when it comes to achieving net zero.

Despite the climate of a reduction in expenditure, there is also a requirement for our cultural organisations to invest in energy efficiency measures, which will be extremely challenging. Could the Scottish Government assist with assessment of that expenditure for cultural organisations directly or through its agencies? Is consideration being given to exemptions for certain buildings or organisations, although that would need to be squared off as a whole with meeting our wider net zero targets? What are your thoughts on that, cabinet secretary?

That relates to the questions on Historic Environment Scotland that Sarah Boyack asked. It is much easier to retrofit a relatively recent building to reduce its carbon emissions. It is more and more difficult to do that the older a building gets. There is a sliding scale of challenge in that.

On whether different allowances should be given for that reality, I would want to be better advised about how we are doing that in the first place. I observe that—I had this conversation yesterday—many organisations that have begun to go down the path of making the changes that we will all have to make have started with the lowest-hanging fruit. There is a general understanding that the closer we get to the more testing targets that we have, the more difficult will be the decisions that we have to make as we go along.

That fits in part with the appeal that Kate Forbes made for us to try to protect a space to have a mature debate about how we do that. If all we do is retreat into our ideological trenches and not allow ourselves to think in new ways in all directions, we will probably not be able to answer some of those really big questions.

I am not sure that I have to hand the answer for the question that Maurice Golden asked but I acknowledge that some buildings, specifically older buildings, will be next to impossible to upgrade to the latest environmental standards whereas most that are being, or have recently been, built are at it. I am content to consider how one accounts for that difference.

I will turn to the vexed question of spending on the independence referendum. This is neither the correct time nor the correct forum to talk about the rights and wrongs of that and I do not expect that we will agree on it. However, as a matter of fact, do you think that a referendum will happen by the end of 2023?

That is the intention and it is certainly what we are working towards.

Yes. I am sorry to take issue with you, Mr Cameron, but I am not sure that it is a vexed question. We can differ honourably—as we do—on how we would vote in such a referendum but I hope that, as democrats, all of us believe in having democratic votes. When a Government is returned in an election on a platform for a vote to be held, as democrats, we should all agree that that is what should happen.

10:00  

There is a cost associated with a referendum, and there are costs associated with Scottish Parliament elections and UK Parliament elections. Is somebody reasonably suggesting that having Scottish Parliament elections is a vexed question? I hope not. Is somebody reasonably suggesting that having UK Parliament elections is a vexed question? Of course they are not. Those are democratic votes and, as a democrat, I respect the results of the Scottish Parliament elections last year, in which a majority of the parliamentarians who were elected believed that there should be a vote. The people voted for that.

The Government has set out its timetable. I gently suggest to Mr Cameron that it would be helpful if his UK Government colleagues were not just as amenable but as respectful of democratic election outcomes in Scotland as the former Prime Minister David Cameron was. That would be helpful, because it is not a vexed question. The decision has been made. The electorate has asked for a referendum, and that is what should happen.

On the back of that, there is a question about the timetable. We await a referendum bill, and we know that that has to be consulted on. Legislation takes time, and there is the potential for litigation. It is possible that the timetable will slip or that a referendum will not happen. If that transpires, will you redeploy the £20 million funding within the culture portfolio, given the significant and severe challenges that that portfolio faces?

Of course, Mr Cameron left out the other option: that the UK Government respects the result of the Scottish Parliament election and the Prime Minister, Boris Johnson, acts in exactly the same way that his predecessor, David Cameron, did. As the Mr Cameron who is on this committee knows, Scottish politics is full of UK Governments saying no, no, no, yes. I invite him to work with me to persuade the UK Government to live up to its democratic undertakings. After all, the UK Government is particularly keen on going around the world saying that the UK is a democratic country that upholds the highest standards of human rights, democracy and the rule of law. It would be really nice if it did that in this case as well.

Will you redeploy the funding, cabinet secretary?

We are going to have a referendum, are we not?

I do not think that we will take much more from that discussion this morning.

For the record, I do not have any relevant interests to declare in this meeting.

I have one question for both cabinet secretaries. I am sure that, for anyone who read it, what the medium-term financial strategy said regarding the demographics of Scotland’s population was quite stark. That is not a new issue; as we know, it has been around for quite some time. The medium-term financial strategy document states:

“by mid-2043, it is projected that 22.9% of the population will be of pensionable age, compared to 19.0% in mid-2018.”

We have had Brexit, with its severe implications for Scotland, particularly for migration and people going back home. Has there been any update, or has any progress been made, on discussions with the UK Government on helping inward migration to Scotland to help to deal with that really important issue, which will clearly have an impact on Scotland’s economy?

Forgive me, convener, but we could spend a whole session on that. As part of my broad range of portfolio responsibilities, I chair the Scottish Government’s population task force. I acknowledge that Mr McMillan will have a particular interest in the issue, given that the population statistics for Inverclyde in particular are of great concern for elected members there.

I will answer the question in a number of ways. First, the Scottish Government is very seized of that issue, as are, understandably, local government leaders in authorities whose areas have suffered historical population decline especially. Traditionally, we in Scotland would have looked towards the north-west of the country—the Highlands and Islands—as an area in which there has been particular population decline challenges in the past, but we are now seeing those in other parts of the country, not least in Inverclyde.

That was observation one. Observation two is that we are heading towards population decline in the whole of Scotland. That is a huge challenge—and, frankly, totally unnecessary. Sadly, it is in significant part to do with UK Government policy and the restrictions foisted on us by the type of Brexit that we have, which has ended the free movement of people. Indeed, it is the single biggest contributor to our facing population decline. It could—and this goes to the heart of Mr McMillan’s question—be changed by Government policy. Our views are very well known and understood in Whitehall and Westminster and are totally ignored. The UK Government has shown no willingness thus far to be imaginative with different approaches to immigration policy or, indeed, taxation policy. There was, for example, the approach that we favoured to deal with refugees from Ukraine, which was not the same thing as immigration but was about giving people a place where they could stay and live. As we know, people in such circumstances often make a life decision to stay in the longer term, but we have a UK Government that is pursuing a refugee crisis as an immigration issue.

On all those levels, the UK is taking the wrong approach. Of course, the simple solution is to put Scotland’s Parliament and Government in charge of immigration in order to make better decisions and make Scotland an attractive place to come to and to live, work and study in. We are doing what we can. We are setting up a migration advisory service; we are doing everything we can to join up government at national and local levels to work out what we can do; we are running international marketing campaigns; we have policy ideas that we are trying to understand better; and we are working with other countries on these matters. Not long ago, I spoke to Spanish colleagues about this challenge, because it is being felt in parts of Spain. Lessons can be learned from other countries, perhaps primarily Norway, given what the Norwegians have been able to do to support population numbers in the west and north-west of their country.

There is a lot in your question, and I could give a lot more answers. Indeed, I think that the issue would be worthy of an entire evidence session. I am keen to keep up my attendance rate at the committee, convener, because it has been pretty good thus far and now that other colleagues from Government are attending with me, I do not want to slip down the batting average. I would want to have an exchange on where things are with population decline in Scotland, because it is such an important issue that brings with it very damaging economic and social consequences.

We have exhausted our questions, so I thank both cabinet secretaries and their officials for their attendance this morning.

I suspend the meeting for five minutes while we change over witnesses.

10:08 Meeting suspended.  

10:13 On resuming—