Chamber and committees

Our commitment to reform is not a single programme; it is a cross system approach with a focus on strategic priorities which we set out in the Budget. This work is being progressed through multiple and interconnected work-streams and requires a whole-of-government approach.

There are 5.8 civil servants working in the team that is leading the core public service reform programme.

The Scottish Government published a detailed update to Finance and Public Administration Committee on 19 December 2023 setting out our reform plan.

With actions across 4 workstreams we are clear on the work that Scottish Government is doing. We are working to build a shared vision, support efficient delivery of services, empower service providers, unblock stubborn barriers and work together with partners on models of funding and accountability which underpin the reform we need to see. Our approach balances responding to short-term budget pressures and making savings, while building the platform for wider change.

I provided an update to FPAC on delivery against the programme and the portfolio plans on 23 September 2024 and 21 December 2024, and we will continue to report on progress with the Parliament at 6-monthly intervals.

I will also be leading the process of articulating a PSR strategy within government and with partners. We will engage with public sector leaders at a PSR summit by the end of February 2025. Together this will set out the Scottish Government’s vision and expectations and invite public sector leaders to come together to inform that strategic approach and to galvanise action.

The Public Service Reform Programme was established in December 2023. Through the programme we are working to address both the efficiency and effectiveness of services, whilst also working to move the public services system to prioritise prevention.

The update to Parliament in September 2024 set out the details of Scottish Government’s key efficiency programmes and projected savings. These programmes include: Commercial Value for Money (CVfM), Collaborative Procurement, Central Government Procurement Shared Services, Single Scottish Estate, The Shared Services Programme, the Intelligent Automation Centre of Excellence and the Digital Programme.

These programmes are securing significant cost avoidance and cash releasing savings, expected to reach up to £280 million over a two-year period (by end 2024-25), with further projected savings of nearly £300 million over the following two financial years to the end of 2026-27.

In terms of further detail, examples include:

• An overall total of £36M direct Scottish Single Estates benefits have been secured in the first year of the programme. This includes cash savings of £5.5M in 23-24 and £15M in 24-25
• The Commercial Value for Money programme has delivered almost £7m of cashable and £600k of non-cashable savings.
• The Intelligent Automation Centre of Excellence has delivered 143 automations with a further 469 in the pipeline. £3.9M in cost-avoidance benefits have been achieved to date.

As the programme develops further, building on the data and capacity around savings, and the embedding of reform and efficiency in the budget process, we will look to drive and quantify other savings opportunities.

The Scottish Government cannot deliver reform alone and is working with local government, public bodies, third sector and the private sector to build a consensus and common vision for achieving sustainable public services and establishing the infrastructure that enables us to collectively make progress.

The Scottish Government has not engaged any consultancies in developing or progressing the Public Service Reform Programme.

The core Scottish Government workforce has been following a strategy to reduce in size since March 2022, to adjust to the budgetary context and the change in the profile of its work following the Covid-19 pandemic. This direction accords with the wider work on medium term financial planning and in-year path to balance, as well as aligning with wider Public Service Reform ambitions. Enhanced recruitment controls were introduced at the start of the 2022-23 financial year to achieve this strategy.

In 2022-23 and 2023-24 the total Scottish Government workforce (i.e. directly employed and contingent workers) reduced by 0.4% and 3% respectively. This is the first time the workforce has reduced in consecutive years since SG began publishing workforce statistics in 2012. For the remainder of 2024-25, the presumption against external recruitment has been further strengthened in line with the spending controls announced in August 2024. Workforce planning for 25-26 will get underway across SG teams in early 2025. The size of the corporate functions within the Scottish Government, and the services they offer to wider public sector bodies, has been part of the consideration of the optimal size and deployment of the total Scottish Government workforce.

Ongoing assessment of the size of the corporate functions, both within the Scottish Government and across the wider public body landscape, is underway and opportunities will continue to be reviewed to ensure the those functions are as efficient and effective as possible to enable the delivery of public services.

The Scottish Government is taking action to support effective workforce planning in public bodies to, including providing guidance on redeployment.

Every ‘scheduled’ award review carried out by Social Security Scotland is a light-touch review.

This means that Social Security Scotland do not require clients by default to provide information again that they already provided, that is not relevant to the changes they have reported, or that we can gather through other means.

Instead, Social Security Scotland will consider information they already hold about the client, where still relevant, and make use of appropriate decision-making tools, where needed, to reduce the need for further questions. They only ask for new supporting information in specific scenarios and take their usual supportive approach to gathering this information.

Our approach differs when a client’s circumstances or changes are more complex, or their reported level of need is unexpected. This is not light touch and Social Security Scotland will decide on a case-by-case basis what additional steps are required and appropriate to better understand the client’s needs, and to ensure they have the information needed to make a robust determination on the client’s entitlement.

Table 1 shows annual inflation as at September between 1999 and 2024 using the Consumer Price Index (CPI), as well as the annual change in the Basic, Intermediate and Higher Property Rates between 1999-2000 and 2025-2026. The rateable value threshold up to which different rates are charged has changed over time. In Scotland, there is no legislation linking the maximum possible uprating of the rates to inflation of the preceding year. Given that Scottish Ministers have chosen to set the Basic Property Rate in order to match or be below the Small Business Multiplier in England since 2007-2008, up until 2016-2017, September Retail Price Index (RPI) acted as a cap on inflationary increases in poundage in Scotland because in England, legislation used to link the maximum possible uprating of the Small Business Multiplier to September RPI of the preceding year. The independent Barclay Review of Non-Domestic Rates published in 2017 noted calls for increases in the poundage to be linked to the CPI rather than the RPI. Since 2017-18, annual changes in the rates in Scotland have been lower than the CPI increase. Revaluations are also typically designed to be revenue-neutral in real terms so both inflation and the growth in the tax base (taking into account expected appeals losses in that cycle) is taken into account when setting the rates.

Table 1: Annual CPI change as at Sept (1999-2024) and annual change to the Basic, Intermediate and Higher Property Rates (1999-2000 to 2025-26)

The Scottish Government keeps a range of measures under consideration as it develops and finalises its Budget. Final decisions are communicated with the Scottish Fiscal Commission (SFC) as soon as is practicable. The Scottish Fiscal Commission is undertaking work to cost the proposal to mitigate the impact of the two-child cap in Scotland for 2026-27. The SFC plan to publish their supplementary costings on 7 January 2025.

The Level 4 tables that were published with the draft Budget 2025-26 provide a summary of the changes from the previous year but it is not practical to list the full detail of all the changes associated with the Local Government Settlement, particularly where that detail is already available to the Scottish Parliament.

The specific details of the £1.5 billion of Local Government transfers processed at the Autumn Budget Revision 2024-25 are published in Schedule 3.1 of the Autumn Budget Revision 2024-25: supporting document.

The Finance and Public Administration Committee recommended that the Budget (Scotland) Act 2024 Amendment Regulations 2024, which give effect to the Autumn Budget Revision, should be agreed at their meeting on 12 November 2024. The regulations were subsequently approved by the Scottish Parliament on 4 December 2024.