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Chamber and committees

Meeting date: Wednesday, January 9, 2019

Meeting of the Parliament 09 January 2019

Agenda: Portfolio Question Time, Animal Welfare, Life Sciences Sector, Business Motion, Decision Time, Rotary Club of Currie Balerno (Recycling Computers)


Contents


Portfolio Question Time


Council Tax (Single-person Discount)

To ask the First—the Scottish Government [Interruption.] I nearly called Derek Mackay the First Minister. [Laughter.] Actually, Kate Forbes will answer the question. Even better. Nearly there, but not quite. Maybe some day.

To ask the Scottish Government what plans it has to review the single-person discount for council tax. (S5O-02729)

I call the minister—Kate Forbes.

At the moment.

I am more than delighted to answer that question. The Scottish Government has no plans to review the single-person discount for council tax.

I am delighted that the Scottish Government has no plans to do that at present, because the single-person discount is particularly important for pensioners who are on fixed incomes. It is good to hear the minister indicate categorically that there will be no change. It is vital that we have that clarification, and I look forward to that continuing. Thank you.

Minister?

I confirm once again that we have no plans to review the single-person discount.

I wish everyone a happy new year. Will the minister confirm that when council tax benefit was devolved, the United Kingdom Tory Government devolved only 90 per cent of the funding, which left the Scottish Government and local authorities with a £42 million funding gap? Does she agree that that is typical of the bad faith that is shown by the Tories in respect of devolved powers? They take every opportunity to cut Scotland’s resources, regardless of the impact on the most vulnerable people.

I confirm that it is typical of the Scottish Government’s efforts that we continually work to mitigate Tory austerity and to invest in public services.

I also confirm that when council tax benefit was abolished by the UK Government in 2013 it transferred £328 million to the Scottish budget, which corresponded to 90 per cent of the projected costs of delivering council tax support in that year. However, working in partnership with local government, we responded quickly to put in place transitional arrangements to plug the resulting £40 million funding gap.

I asked the current First Minister to rule out any changes to the single-person water discount and the single-person council tax discount at question time on 8 November, but she refused to do so. Given that those two benefits operate in the same way, the legitimate concerns are that the Scottish Government’s proposal to remove water discounts is the thin end of the wedge, and that council tax discounts for single people are next. Will the minister rule out any cuts to the single-person water discount as well as to the council tax discount?

I repeat my answer that the Scottish Government has no plans to review the single-person discount for council tax. However, we have consulted on amending the present single-person discount for water charges, which are quite different. That consultation closed on 28 September 2018, and a summary of the responses was published on 19 December 2018. Having listened to feedback from customers, we intend to undertake further research, consultation and engagement before making a decision on whether to amend the existing discounts.


Economic Growth (Forecast)

To ask the Scottish Government how the Scottish Fiscal Commission’s forecast for economic growth in Scotland over the next four years compares with that for the United Kingdom as a whole. (S5O-02730)

The Scottish Fiscal Commission forecasts economic growth in Scotland to be faster than the Office for Budget Responsibility forecast for the UK in 2018. Comparing the forecasts, economic growth per person will be similar in Scotland and the UK over the next four years, but overall gross domestic product growth will be lower in Scotland as a result of slower population growth. That certainly underlines the importance of Scotland being able to develop a migration policy that is tailored to our needs, rather than to those of the UK Government.

I thank the cabinet secretary for that answer, in which he failed to make it clear that the SFC’s forecast shows that Scottish economic growth will lag behind that of the UK as a whole for the next four years.

The Scottish National Party is always keen to blame its failings on the UK Government or Brexit—and sometimes even on the weather. Can the cabinet secretary tell us, in simple terms, how Scotland’s growth rate being lower than that of the rest of the UK can be due to anything other than the SNP?

It is very interesting that Liam Kerr has forgotten that in some of last year’s quarters, Scotland’s economic growth and GDP outperformed those of the United Kingdom. Surely the same logic applies: Scotland’s economic growth outperforming the UK’s is because of the SNP Government. In truth, the reality is that a large part of macroeconomic policy is still in the hands of the Westminster Government, although we would like that to be changed.

The biggest threat to the economy just now, and the main reason for the subdued figures in forecast economic growth, is Brexit uncertainty. Who has caused that? It is the Conservative Party.

We are making a lot of effort to enhance and accelerate our economic growth. We have referenced only the SFC’s and OBR’s forecasts. As a matter of fact, the SFC economic forecasts for 2018 were wrong, because Scotland has outperformed them. What is more, the SFC had to revise upwards the economic forecast for the Scottish context.

I welcome the work of economists in forecasting economic growth. We will do everything that we can to stimulate economic growth. However, the biggest threat to that right now is Brexit mismanagement at the hand of the UK Government.

For the record, will the cabinet secretary confirm what Scotland’s GDP growth was predicted to be over the past year and what it has been?

The answer to Mr Lyle’s question will add further detail to the point that I made about Scotland having already outperformed the SFC forecasts. Of course, there will be revisions and a further estimate for the final quarter, but in December 2017 the SFC forecast was that GDP would grow by 0.7 per cent in 2018. The full-year growth figure for 2018 is not yet available. However, in the first three quarters of the year, the economy has grown by 1.2 per cent, so in 2018 we have had growth that has been higher than was forecast.

Oh!

I hear that Richard Lyle is delighted by that news. Growth for 2018 is now forecast to be 1.4 per cent, which is double the original SFC forecast.

We have much indigenous talent in Scotland that could well boost our economy, but financial assistance tends to be given to larger companies. What will the Scottish Government do to encourage and grow our talent, and to support small and medium-sized enterprises that are more likely to stay here?

I welcome the question and appreciate the point. We want to scale up businesses, get more businesses exporting and have more diversity in that regard. I do not think that Rhoda Grant was in any way trying to imply that we should not also rely on or encourage further migration to Scotland as a welcome addition to our economy, because population is a huge issue for economic growth.

I am directing the enterprise agencies to do even more on scaling up and supporting small and medium-sized enterprises. There are other efforts and there is the economic action plan. I take Rhoda Grant’s point on board.

Even though unemployment is at a record low of 3.7 per cent, which I had thought Labour members would welcome, we can do more on reskilling and encouraging back into the workforce people who have been removed from it. Therefore, there are efforts being made around gender and reskilling.


Scottish Reserve

To ask the Scottish Government what the size is of the Scottish reserve. (S5O-02731)

The balance of the Scotland reserve that was reported in the fiscal framework outturn report in September 2018 was £192 million.

The cabinet secretary proposes to draw down from the Scottish reserve the maximum available sum this financial year. Given that the Scottish Fiscal Commission forecasts a deficit of £472 million in income tax receipts for the current year, would not it be wise to top up the reserve at this stage, rather than to run it down?

Jeremy Balfour puts across a legitimate view. If that is the formal view of the Conservatives, so be it. However, not drawing that money down would mean further reductions in spending on Scotland’s public services in the financial year 2019-20. It is a legitimate view to suggest putting more in the reserve for a rainy day, for reconciliation or for any other matter. My judgment is that, right now, the economy needs stability, economic stimulus, certainty and sustainable public services. Therefore, the budget that I have proposed relies on that transfer.

Other levers are available to the Government in the event of a negative reconciliation. Of course, we would use the most recent fiscal figures to do that. However, there is a choice. If I were now to follow the Conservatives on tax alone, that would mean a £500 million reduction in funding to Scotland’s public services. To follow Jeremy Balfour’s advice would further reduce spending on Scotland’s public services in 2019-20 by not using reserves in the fashion that I have proposed in the Scottish budget.

Does the cabinet secretary agree that it is utterly hypocritical for the Tories to take that position, given that we saw today in papers from the Office of Budget Responsibility that every penny that is going into the national health service, which has been mentioned by the Prime Minister, is coming from borrowing rather than from a Brexit dividend?

It is still true to say that the UK Government has short-changed Scotland’s NHS by giving us £50 million-odd less resource than was previously committed. The UK Government’s mishandling of the UK economy and the Brexit negotiations has meant that economic growth has been less, and that it is having to borrow more than it first thought it would. The UK Government actually had more firepower in terms of reserves that it could have used to stimulate the economy, but it chose to hold them back.

However we look at it, the Tories’ economic credibility is shot to pieces—it is just gone. The Tories have no economic credibility whatsoever any more. That is what is subduing the economic forecast for the UK and—for that matter—for Scotland.


General Revenue Funding (Aberdeen City Council)

To ask the Scottish Government what general revenue funding it plans to provide to Aberdeen City Council in 2019-20. (S5O-02732)

Aberdeen City Council will receive almost £336 million of general revenue funding in 2019-20. Using its council tax powers could also generate an additional £3.7 million to support the delivery of essential local services, which would mean an extra £10.7 million or 3.2 per cent of revenue funding in 2019-20 compared with 2018-19. In addition, Aberdeen City Council will receive its fair share of a further £233 million following agreement on the distribution methodology with the Convention of Scottish Local Authorities.

The minister will know that most of the sums to which she referred come not from general revenue funding, about which I asked, but from non-domestic rates. In The Press and Journal today, a Government spokeswoman confirmed that, this year, the council is expected to collect over £255 million in business rates compared with a target of less than £228 million—a difference of nearly £28 million. Can the minister confirm that Aberdeen City Council will be able to retain every single penny of that additional business rate income this year, as her representative also told the The Press and Journal? If so, will she apply the same principle to the next financial year?

I can confirm unequivocally that local councils keep every penny of revenue raised through non-domestic rates.

In my constituency, Northfield has a child poverty rate of 33 per cent while Bridge of Don has a child poverty rate of less than 5 per cent. When the city is looked as a whole, the affluence of the latter community masks the poverty of the former. Does the minister agree that, as well as looking at local authority revenue-raising powers, it is time that we looked at how local authority finance is calculated and how need is calculated?

I am sorry, but I am afraid that I missed the question.

Mark McDonald may repeat the question.

I mentioned two communities in my constituency: Northfield and Bridge of Don. One has a child poverty rate of 33 per cent; one has a child poverty rate of less than 5 per cent. When the city is looked at as a whole, the affluence masks the poverty. When looking at local government finance, as well as the debate that is taking place on local authority revenue-raising powers, is it not time that we took a long, hard look at how revenue for local authorities is calculated as part of the funding formula?

I thank Mark McDonald for repeating the question. Local authority funding is allocated using that needs-based formula, but the member raises a good point about the importance of ensuring that the funding that is raised goes to the areas of greatest need. Of course, the formula is kept is under constant review and is agreed each year with COSLA to ensure that no local authority, including Aberdeen City Council, receives less than 85 per cent of the Scottish average on a per capita basis. The Scottish Government introduced that funding floor in 2012 to ensure that there was fairness.

We have a further supplementary question from Tom Mason.

I remind the chamber that I remain a councillor in Aberdeen City Council.

Despite the minister’s warm words for local authorities, according to the Convention of Scottish Local Authorities, the settlement is insufficient and will send councils towards a “cliff edge”. Conversely, between 2010-11 and 2019-20, rates for businesses in Aberdeen have almost tripled, going from £84 million to £258 million. That represents an increase of 207 per cent, compared with a 52 per cent increase in Glasgow, for example.

Does the minister think that it is acceptable to simply shift the responsibility for his local government shortfall to hard-pressed local businesses?

As the responsible minister, I have ensured that, for this year and for the next two years, there is a transitional cap on non-domestic rates so that offices in Aberdeen and Aberdeenshire do not see a significant increase in their business rates immediately but instead experience a transitional phasing.

The member knows fine well—particularly as he is a councillor—that it is misleading to quote the general revenue grant funding alone, because the Scottish Government guarantees every local authority, including Aberdeen City Council, the combined general revenue grant and non-domestic rates income. All of that money is spent on public services that matter to the people of Aberdeen, although, of course, the council has freedom to decide its priorities for the coming year.


Bus Services (Financial Support)

To ask the Scottish Government for what reason its draft budget proposes a reduction in financial support for bus services. (S5O-02733)

Financial support for the bus industry will not be reduced. The draft budget maintains the same level of investment through the bus service operator grant of £54.2 million. Last year, the budget included a one-off allocation of £10 million of financial transaction loan facilities, which were not used, as no viable option for their use was identified with the bus industry. This year’s draft budget includes an additional £3 million of capital grant funding for the bus industry.

It is my understanding that funding has fallen from £64.2 million to £57.2 million.

Ministers are often keen to quote Professor Philip Alston’s United Nations report, which was critical of the United Kingdom Government. It said:

“Transport, especially in rural areas, should be considered an essential service, equivalent to water and electricity, and the government should regulate the sector to the extent necessary to ensure that people living in rural areas are adequately served.”

The vast majority of public transport journeys are taken by bus, but patronage has fallen. How can the Government justify making a cut of £7 million to the funds that support the services that many of our communities depend on?

I recognise the importance of bus services, particularly in rural areas. As I said in my first answer, last year we worked with the bus industry to identify a use for the loan funding, but an attractive option did not emerge. Should a suitable option emerge in our 2019-20 discussions with the bus industry, we will assess the possibility of accessing a financial transaction loan. However, it is important to say that we continue to spend more than £250 million a year on supporting the bus network and funding concessionary travel, and the current programme for government commits to providing stability for bus services, which was one of the industry’s requests, with funding over three years.


Inclusive Growth (Ayrshire)

To ask the Scottish Government what action it is taking to ensure inclusive growth in Ayrshire. (S5O-02734)

The Scottish Government and its agencies continue to support significant levels of investment in Ayrshire, in key areas such as housing, transport and skills, to drive inclusive growth. An immediate priority is to press the United Kingdom Government to join us in agreeing a growth deal for Ayrshire, so that local communities there can benefit from the same transformational investment that is being made in our city regions.

The Ayrshire growth deal, which has inclusive growth at its heart, is crucial to the economy in Ayrshire. What more can parliamentarians and the Scottish Government do to ensure that the UK Government turns its warm words into action and signs the deal to bring much-needed investment and jobs to our Ayrshire communities?

I suppose that all parties in the Parliament can unite to continue to call on the UK Government to take that action. As the finance secretary, I have certainly done so when I have met my colleagues in the Treasury, and I know that, in December, the Cabinet Secretary for Transport, Infrastructure and Connectivity wrote to the Secretary of State for Scotland, urging the UK Government to match the ambition that has been shown by Ayrshire partners to have the heads of terms agreed by 25 January. At the moment, it appears that the UK Government will not be able to do that. We will continue to press for the heads of terms to be agreed as soon as possible, and all members across the chamber should continue to do so, too. Ayrshire has waited too long for its growth deal and we want to get on with it.

Yesterday, it was announced that Hourstons department store, which first opened its doors in Ayr in 1896, is to be the latest casualty in the decline of our high streets and is to officially close on 7 February, resulting in more than 80 job losses. Is the Scottish Government aware of the issue and has it been in communication with the store management to see what support—if any—can be offered to the store and its staff at this difficult time?

I will make two points on that. First, Mr Hepburn, as the business minister, will be involved and, as in any situation of redundancies, partnership action for continuing employment—PACE—will be involved. There will be Scottish Government involvement through Skills Development Scotland and PACE.

Secondly, retail is under pressure right across the United Kingdom, which is part of the reason why, in the draft budget, we propose to give relief through the poundage for business rates. That measure, along with the small business bonus and other reliefs, is important in helping retail at this point, particularly in town centres, and 90 per cent of all properties will pay less than they would if they were south of the border. That is an important point about business taxation, but we are also investing in our town centres, with a proposed £50 million town centre fund.

Specifically on Emma Harper’s question, there is Government awareness and involvement through our agencies. More generally, all members should support a Scottish budget that is trying to set competitive non-domestic rates so that we can provide stability and stimulus for our economy as well as support where it is required.

A fair work action plan that aims for inclusive economic growth would be welcome and could help people in Ayrshire and throughout Scotland. Ministers gave a commitment to publish such a document before the end of 2018. Will the cabinet secretary update us on when the Scottish Government intends to publish that important document?

We continue to engage with trade unions, and the publication is imminent. It is important that we get the document right, and we have worked closely with partners on it. I look forward to the Labour Party welcoming the action plan, because we share many of the principles on fair work that we want to extend across society in Scotland.

Question 7 has not been lodged.


Business Leaders (Meetings)

To ask the Scottish Government when it last met north-east business leaders, and what matters were discussed. (S5O-02736)

The Scottish Government continues to engage with business partners across Scotland to ensure the best environment for business to thrive. Most recently in the north-east of Scotland, the Minister for Public Finance and Digital Economy met Scottish Council for Development and Industry members in Elgin on 22 October, I met Aberdeen and Grampian Chamber of Commerce on 29 November and, on 11 December, the Minister for Energy, Connectivity and the Islands chaired the triannual meeting of the oil and gas industry leadership group in Aberdeen.

A wide range of topics were covered during those discussions, including skills, the impact of technological changes, opportunities from the circular economy, population growth in the Highlands and Islands, exports, Brexit, innovation, investment, decommissioning, low carbon and fintech.

The minister will know of Aberdeen City Council’s recently published “Aberdeen Economic Policy Panel Report”, which highlights the important role played by people who come to the north-east from elsewhere in the European Union. The report highlights that Brexit may

“impact on the flow of key skills to the North East economy.”

Does the minister agree that Brexit poses a serious risk to businesses in Aberdeen and that the United Kingdom Government must act to protect the flow of workers with key skills to the north-east?

I absolutely agree. The issue of Brexit and the inevitable harm that it will do to our economy reinforces the importance of all the steps that we are taking to support businesses. We are intensifying our preparations for all EU exit possibilities, including launching on 1 November last year the prepare for Brexit multi-agency campaign, which offers free advice and tools to support businesses to be ready for Brexit. In 2016, there were 128,000 non-UK EU nationals living and working in Scotland. Those individuals and their families play a hugely important role in our economy and society and are critical to many key sectors, including the hospitality and agriculture sectors.


Budget (Support for People in Need)

To ask the Scottish Government how its draft budget aims to help people most in need. (S5O-02737)

The draft budget includes investment of at least £351 million in the council tax reduction scheme; £64 million in discretionary housing payments to mitigate the bedroom tax in full, for example; and £38 million in the Scottish welfare fund.

In addition to those measures, the budget proposes that £826 million will be made available to support our 50,000 affordable homes target, 35,000 of which are for social rent. That is a £70 million increase on the equivalent figure for 2018-19. There will also be resources for our tackling child poverty delivery plan, which outlines a number of key investments that the budget will support in the period to 2022, including intensive employment support for parents and our new financial health check service.

Given that there has been a real-terms cut in the total Scottish fiscal budget by the United Kingdom Government over the past decade, what additional investment has this Government been able to generate through its tax and borrowing powers for Scotland’s public services, in order to support people who are suffering from on-going politically driven Tory cuts?

UK-imposed austerity has meant that there has been a real-terms reduction in the total Scottish fiscal resource budget of £2 billion between 2010-11 and 2019-20. [Interruption.] I have said that before, and Murdo Fraser knows the statistics well. Our decisions on tax and borrowing have reduced the real-terms reduction to the total Scottish fiscal budget from 6 to 3.8 per cent between 2010-11 and 2019-20, which has generated an additional £712 million for investment in public services.

The cabinet secretary will be aware that the Convention of Scottish Local Authorities gave evidence on the budget to Parliament’s Local Government and Communities Committee this morning. At the meeting, its representative said that councils have done all that they can to make efficiencies, but that the core is simply crumbling. When they were asked what services would be cut as a result, increases in fees and charges for leisure, culture and sport services and employability support were all mentioned. Councillor Macgregor said that, in many of those areas, the effect will directly impact on people from more disadvantaged backgrounds. Is it not clear that, if the budget is passed in its current form, the people to whom James Dornan’s question refers—those who are most in need—will inevitably bear an intolerable burden of cuts to the services on which they most rely?

No—the opposite is true. If the Scottish budget is not passed, local government will have less resource in cash terms and in real terms. That is the alternative. The budget will allow a real-terms increase in resource and capital to Scotland’s local authorities—£11.1 billion is at stake. If the budget is not approved, there will be less resource to Scotland’s local authorities. That is what Parliament will be voting for if it does not vote for the budget. If Parliament votes for the budget, there will be a real-terms increase, which we should set in the context of the UK settlement for Scotland.

If we exclude the health consequentials—which is reasonable because we have said that we will pass on the Barnett consequentials and the UK Government short changed the national health service—Scotland would have had a reduction in all other portfolios. The consequence of the budget will be a real-terms increase for local government, as the Scottish Government is proposing. That increase is before local government even uses its powers on the council tax, which, if it is raised by 3 per cent, would generate a further £80 million for local government.

This morning, the cabinet secretary told the Local Government and Communities Committee that councils will need to find efficiencies. The reality is that councils will need to make cuts if the budget is passed in its current form. South Lanarkshire Council, for example, faces making cuts of £17 million, which would mean cuts in jobs and services and pain being inflicted on local communities. If the cabinet secretary wants to help those who are most in need, he needs to radically rethink his local government settlement, so that the budget supports local communities rather than provides them with cuts.

I have just been asked by the Labour Party to rethink my budget; I ask the Labour Party to think about a budget. Sources in the Labour Party have said that it is not even going to put forward a credible plan this year. That is a shambles. How am I meant to take that rhetoric from the Labour Party in any way seriously? At least other parties such as the Greens will engage constructively, but from the Labour Party, I will have a shambles; I will have nothing; I will have no alternative—[Interruption.] I have noise and rhetoric from the Labour Party deafening me right now, but no serious suggestions are being made.

By the way, I point out that witnesses at today’s Local Government and Communities Committee meeting—in this case, the COSLA resources spokesperson—described the Scottish Government as having excellent priorities. Those were her words. We are investing in the kinds of things that the Parliament asks us to invest in, whether it be the extension of free personal care, mental health, education or social care. We have important priorities, and we are putting more into resource and capital and giving a real-terms increase to local government. The alternative is to vote against that and give local government less resource. That is the alternative to the budget that I have proposed to the Scottish people.


Productivity

To ask the Scottish Government what action it will take to improve productivity growth in Scotland, after a report from the Scottish Fiscal Commission has highlighted that it is set to fall. (S5O-02738)

The Scottish Government’s economic action plan, which was published on 24 October, sets out the range of actions that we are taking to support inclusive and sustainable economic growth, including increasing productivity. Conservative members might be interested to hear that, in the latest 12-month period, Scottish productivity has increased by 1.3 per cent, compared with growth of 1 per cent for the United Kingdom.

We recognise the impact of Brexit, and the Scottish Fiscal Commission has forecast slow productivity due to a period of uncertainty. As a result, the economic action plan lays out several actions to address productivity, including the development of the Scottish national investment bank and the establishment of the national manufacturing institute for Scotland, which will make us a global leader in advanced manufacturing and support productivity improvements.

Regardless of the impact of the UK leaving the European Union, the Fiscal Commission is concerned about Scotland’s long-term growth, which is predicted to be only 1 per cent per annum when we might reasonably expect it to be nearer 2 per cent. The commission says that the trend is unlikely to end in the near future, even when isolated from other factors. Is the cabinet secretary concerned about that? What actions does he feel we as a country and the Scottish Government need to take to turn that trend around?

First, I could go on at length about the detail of the economic action plan. Instead, I encourage all members to look at it online, because it contains a range of actions for supporting productivity growth in our country.

Of course, this is not just about the public sector—much of it relates to the private sector, too. Productivity growth is also about business enterprise research and development, which is at record levels; and foreign direct investment, in which we are second only to London and the south-east of England. We are doing more on investment, innovation and infrastructure, but the productivity of our people is a significant issue, too, and I note that, in addition to the issues that we are taking action on, our economy faces a population challenge, and to address that, we need more powers and flexibility over migration.

We have set out and proposed further changes and responsibilities to try to ensure that the population challenges are appropriately dealt with. For Scotland, that means having population growth and not turning migrants away; for the UK Government, it means creating a hostile environment for migrants. I encourage Michelle Ballantyne and other Conservatives to contact their own Government and to support us in having the flexibility that we require to improve productivity beyond what we have set out in the economic action plan.


Fair Start Scotland

To ask the Scottish Government how many of the 38,000 people that fair start Scotland aims to support it expects to participate in each year to 2020. (S5O-02739)

The Scottish Government published statistical information on the early performance of fair start Scotland in November last year, and it showed that we have made a strong start, with nearly 5,000 people joining since April 2018. The Scottish Government continues to manage individual providers robustly to ensure that, over the period of the service, we reach our ambition of supporting a minimum of 38,000 individuals into employment. Information on fair start Scotland will continue to be published quarterly, and I have also committed to regularly report progress on it to Parliament.

I thank the minister for that response, but he did not actually answer my question. As the minister has pointed out, the Scottish Government has said that, in the first six months of the programme, just under 5,000 people have taken part in it, but the pace will need to be picked up if the 38,000 figure is to be hit. We therefore need to know how many people are expected to participate and when they will do so. Perhaps I can try again: how many people does the minister expect to have participated in fair start Scotland by the end of its first year?

I reemphasize that we will continue to update Parliament. By the end of this year, we will know precisely how many people that will be. However, I say to Brian Whittle that I did not hear one shred of welcome from him for the fact that our programme, which is voluntary—unlike the United Kingdom Government’s programme, which compels people to take part in employment—is supporting 5,000 people across the country into employment on a personalised basis and on the principles of dignity and respect. That is a significant achievement that should be welcomed by all.


Economy (No-deal Brexit)

To ask the Scottish Government how a no-deal Brexit could impact on Scotland’s economy. (S5O-02740)

A hard Brexit could lead to a loss of up to 8.5 per cent of gross domestic product in Scotland by 2030, which is equivalent to £2,300 per individual.

The minister will be aware of the Fraser of Allander institute report from October 2018, “Brexit and the Glasgow City Region”, which states that an estimated 20,000 of the 40,000 Glasgow city region jobs that are related to exports are in the Glasgow city area. Does the minister agree that the path that the Tory Government is dragging us down will jeopardise those 20,000 jobs in Glasgow city as well as thousands more jobs across the country, and that that is completely unacceptable?

Sandra White asked me about the path that the Conservatives are dragging us down, but I do not think that even they know what path they are dragging us down at the moment. Their cack-handedness is appalling and is having a material impact on the economy. The statistics that were articulated by Sandra White are accurate.

I encourage the United Kingdom Government to engage constructively with others to find another way through this, such as the ways that the Scottish Government has repeatedly set out in its compromise positions.


Local Government Settlement 2019-20

To ask the Scottish Government what its response is to analysis by the Convention of Scottish Local Authorities, which suggests that the 2019-20 local government settlement will result in a £237 million reduction to the core revenue budget and a decrease to the core capital budget of £17 million. (S5O-02741)

Despite continued United Kingdom Government cuts to Scotland’s resource budget, we have continued to treat local government very fairly. The COSLA analysis fails to take into account the total funding package, which includes an additional £210 million to deliver on our commitment to the expansion of early learning and childcare entitlement, and £160 million for investment in social care. That is real funding to support real day-to-day core services. Excluding it presents a distorted picture of the resources that are available to councils. The facts are clear: in 2019-20, the local government finance settlement of £11.1 billion will provide a cash increase of £197.5 million for local revenue services and an increase in capital funding of £207.6 million.

COSLA accepts that an additional £237 million is being made available to fund the priorities that the Scottish Government is putting forward. However, as the finance secretary said at the Local Government and Communities Committee this morning, while the Scottish Government has its priorities, councils have to look at what priorities they have to cut.

In Fife, parents, pupils and teachers cannot understand why more than £2 million is being cut from budgets in secondary schools in the current year. Fife Council says that, as a result of the finance secretary’s proposed budget, more than £11 million will be cut next year, and that schools will have to take their share of that cut. How can that be seen as a growth in budget?

It can be seen as a growth in budget because the analysis from the Scottish Parliament information centre is clear that the total allocation from the Scottish Government to local authorities in 2019-20 has gone up in real terms. That is real money to be spent on real day-to-day services such as schools, nurseries, the extension of free personal care, the expansion of early learning and childcare, and health and social care. During the budget negotiations, COSLA identified those as areas of pressure for local authorities. The Scottish Government has recognised the partnership approach and provided additional funding. Real people will benefit from that real investment in real day-to-day services across this country.

The Scottish Government has been given an increase in its block grant from Westminster in real terms from last year to this but, in its draft budget to Parliament, it proposes not only an increase in the tax gap between Scotland and the rest of the United Kingdom for income tax payers who earn above £27,000 but severe cuts in the core grant to local authorities throughout Scotland, which will mean real cuts to the services that our constituents get. We are being asked to pay more money, but we will get less in return. Why would anyone vote for that budget?

That is in sharp contrast to the comments made this morning by Graham Simpson, who conceded that more money is going to local authorities.

As I said in my previous answer, the analysis from SPICe is clear that the total allocation from the Scottish Government to local authorities in 2019-20 has gone up in real terms. That is in a context in which our block grant for 2019-20 will be almost £2 billion lower in real terms than the block grant for 2010-11. We have reversed a real-terms cut in our budget to ensure that we protect the public services that are enjoyed by the people of Scotland across the country.

Can the minister clarify for the Parliament whether either the Labour Party or the Conservative Party, both of which appear to want more money for local government, has suggested where that money should come from? In particular, have they suggested that it might come from the national health service? Do they want cuts to the NHS?

I believe that the only suggestion that we have from the Tories is to cut £500 million from the budget. However, they have not indicated where they would cut that money from.