 A chweb wnaeth o'r ffordd roi cyfwyrnau cyntaf o'r m modernau cymryd yn 2023. Cadw'n gweithio hynny. Felly, yna Alice Rowley yma. Felly, yna Jackie Bailley, sy'n cerddog ar y ddweud. Jackie, rydw i'n rhaid i gydig i gyfwyrnau allu'r ffordd i'r gweithgors? Rydw i'n rhaid i gydig i gydig i gydig i gydig i gydig i gyflydd y Curtin! Fygedig i'r grefwyrnau chyfwyrnau cymryd yw hanfrockwn i'r gweithgors. executive committee will look at monitoring COVID-19 recovery and I'd like to welcome to the meeting Al番 Trigvedaughtyr, the lead spending review and machinery of government, and Indra Bimballett, junior policy analyst from the organization for economic cooperation and development, both of you join us remotely this morning. Good morning. The session will run up to 10 past 10. Each member will have approximately 10 minutes to speak to witnesses and to ask their questions. I'm keen to ensure that everybody gets an opportunity to speak. So I apologize in advance if time runs on too much, and I may have to interrupt all witnesses in the interests of brevity. Can I invite Alfron in order to briefly introduce himself. Alfron, do you want to I go first, please. Thank you very much for the opportunity to be with you here today. My name is Aldrin Trifodl-Dead, and I am a senior policy analyst at the OECD, and I'm leading the work, as you said, of Spending Reviews, my senior government and performance budgeting. Thank you, Alffra. Indra, would you like to come in? Hello, everyone. I'm Indra Momoleide at the OECD on performance budgeting and spending reviews. I'll now turn to questions. If I may begin with the first question. With the Covid-19 rules and restrictions lifted in Scotland, there's obviously been a reduction in the quantity and the quality of available data, although I know that data is still being published on a weekly basis and still offers some insight into Covid-19 trends and cases. I'm interested, Alffrin, in your view of the Scotland Covid-19 recovery dashboard, both during the height of the pandemic and currently following the lifting of restrictions. Yes, thank you very much for this very interesting question. I mean, this is something that we have been discussing quite extensively with the countries that we've been working with, and I want to note to begin with that, unfortunately, we've not been able to directly work with Scotland on a bilateral basis, but of course we are quite familiar with the system in Scotland. We have worked with neighboring countries, such as Ireland, for example, but we wanted to note that, I mean, the dashboard is obviously excellent, and I mean, what we found really relevant for the dashboard you have in place is how regularly it's been updated. I mean, that's really good. How frequently you update the data. And I mean, I would say that it's quite similar to what many other countries have been doing. Many OECD countries have been doing something similar, but I think that most countries are not updating the dashboard as frequently anymore. I mean, of course, as they're heading out of the pandemic and other more important things have been happening that need to be responded to. So, I mean, that's what we see and just to give you a bit of a context of how Scotland compares to other countries. We also wanted to note that, I mean, it was, of course, extremely important to have the dashboard during the, when the pandemic reached its peak, so to say, but what we see in other countries is that now they are kind of, as I said, focusing a bit less on updating, doing such updates to a COVID dashboard, but more on kind of what can be learned from the pandemic and how countries can recover now. I mean, that's the most important thing, how to get out of the pandemic. So, this is what we see, just to give you a broad context of that. Yeah, so this is, I don't know if Andrew you want to add anything, but I mean, I think now we really see that what we interestingly see is that countries are focusing on the public finances side. I mean, what has been spent during the pandemic? Is it the one-off expenditure? And how do you, if it's one-off, how do you find ways to kind of like get that, I would say, is it needed now when countries are trying to recover from the pandemic? Thank you, Alfred. That's really helpful. And you've actually answered my second question with that as well. And I know in the previous session, Alfred, in September, you gave evidence on the committee's pre-budget scrutiny. And I know that you mentioned that many of the nations are now looking at scaling up their spending review process. First of all, can I ask you how simple would this process be and how well do you think the Scottish Government is placed to do this? And just on another note, for this to happen, would it need to come from both changes from the both UK Government and the Scottish Government? I don't know, Indra or Alfred, if you want to come in on that. Yes, we'd be happy to comment on that. Yeah, I mean, this is a really relevant topic that we are working closely with many countries on exploring, so to say. And I want to note, first of all, as you discussed the last time I met you, the Scottish spending review process, similarly to the UK's spending review process, is a bit, it's not quite the same as what most other OECD countries have in place. And there are both pros and cons to the process that you have in place. I mean, it's extremely linked to the budget process. As you know, I mean, you just like it's a part of basically setting the budget. So I mean, you discussed with ministries or spending entities that you have to, you have to, I find, I mean, X amount of savings and then you do that. I mean, what is the, I would say the weakness within the Scottish spending review framework is that I mean, there's this lack of focus on baseline or existing expenditure, which is, I mean, something that definitely needs to be tackled now more than ever, I would say. And what we saw as, I mean, during the 2008 crisis is what countries use spending reviews extensively to do this. So, I mean, to scale up the use of spending reviews, yes, I mean, definitely it would have to come from the government. I don't know if the scale up is the right word in the context of Scotland, because, I mean, I think, as I said, you have an excellent process in place. It's just not focusing on what we would call a spending review we should be focusing on, which is tackling legacy spending, I mean, how to really look in the extent like, you know, what cannot the waste of expenditure. But you know what I mean, like, you know, there are so many spending areas that you can really find room to reallocate to a higher spending priority area. So, I mean, that's something that I would encourage Scotland to look into, because you both can have this process that you have in place today, which is really good to have this as part of the budget setting process, and then also put in place kind of this. And I think if the government would explore something around those lines, it would be really beneficial for Scotland. Thank you very much, Alfred, and that's really helpful. I'll move on to Mudo Fraser, please. Thank you, convener, and good morning. Thank you for your evidence this morning. Can I just pick up on a couple of the issues that the convener started by highlighting? You mentioned a moment ago, Alfred, the comparison with 2008 and how countries responded to the financial crisis at that time and the differences that we've seen. Can I just ask you to expand just a little bit more on that and all lessons we can learn from the responses in 2008, and is there a different approach being taken now, either in other OECD countries or in Scotland? Yes, thank you very much. I mean, this is an extremely interesting question and something that we've been analysing or looking into at the OECD. I mean, it's the important thing of learning from crisis. I think that's what we did not do extensively after the 2008 crisis, how to respond to crisis, and I think that's quite obvious today. That's kind of what we see, at least with countries. But I think that the difference, of course, I mean, the main difference I would say between those two crises is that, I mean, immediately after the 2008 financial crisis, there were just fiscal consolidation measures right away. I mean, that's kind of what happened at that point. Now, we see that, of course, during Covid, countries just have been spending a lot of money, and no one really knows where the money has been going or how it's been used. I think that's the problem now. And now, countries are kind of like, I mean, what are we, like two years and two or three years afterwards? Countries are waking up and thinking, okay, now we really need to do something to respond because there's not enough, there's not any space to respond to any extra public financial needs. So I think that's, of course, the biggest difference between the two crises. And this, I mean, I think like the sharp fiscal consolidation measures that took place in 2008 and talking about spending abuse in that context, I mean, they were just used to cut expenditure rapidly. And I mean, that's also not really good because they were not really maybe done in the correct way, so to say. I mean, it really hit countries afterwards. So I think, I mean, I think we would say just that's the biggest difference between the two crises. But we are kind of afraid that now, I mean, countries will be having this sharp fiscal consolidation measures this year, next year. This will really be hitting hard. And then, of course, with, I mean, the energy crisis and everything else on top of the Covid crisis, that's even more expense than it for some sort of fiscal consolidation measures. And that's why we are talking to companies about the importance of having a really, I mean, having basically good budget practices in place. I mean, you need solid spending review practices. You need to be able to analyse baseline expenditure. You need to have good, good structure around the budget. And importantly, I have to note also that after the, what is the good thing that's happened after the 2008 crisis is that, I mean, many countries really improved their budget structures and implemented medium-term expenditure framework spending reviews, performance budgeting. So this is really proving to be beneficial today. I don't know if this completely answered your question, but this is, I'm happy to take any further questions that you have. Yes, thank you. That's really helpful. And just to follow up on another point you made in response to the convener. I mean, you suggested that there were areas of spending pre Covid that perhaps were not as important or perhaps not as well targeted as they could have been, and these have just been carried on with. There's not really been an attempt by the government to look at how effectively money has been spent. Have you got anything particularly in mind when you say that? Are there any examples you give us of areas of spending you think perhaps needed to be looked at more closely rather than just being rolled forward? That's a really good question. I mean, I would say, I come from, I'm a former budget person in the Ministry of Finance in Iceland, and I would say like every spending area needs to be, I think there's waste within every spending area. I mean, so I don't know if there's anything really specific that can't be mentioned in, I mean, in context of Scotland, but of course, I mean, I guess that countries are similar in that way, but I mean, there's just been, in every country, there's been steep increase in, like I'm talking about, of course, OECD countries now, there's been just an increase, gradual increase in every spending area. I mean, I think that's kind of what really needs to be touched upon if you are, I mean, you really need to just take stock and say, now you have to think about where is this like, because you have the same discussion you have, there is not enough money in the system, but still you have the increase in the spending, and basically I would say every spending area. So, I mean, I think this is really what governments need to take stock of and say, like, if there's an increase in spending and there is still this, the gap between the need and expenditure, what can we do to respond to that? Is spending, I mean, is it not being used as it should be used? I mean, that's a question that I think every policymaker should be asking themselves today, but I don't know about anything specific. I would say that's my kind of, just like in every spending area, there's quite a lot of waste. I mean, yeah, you can find room basically everywhere. Okay, okay. I appreciate that. Probably wasn't a very fair question to ask you. It's really our job to find the waste in the Scottish Government's budget, not yours. I've just got one more question if I can, and that's trying to look ahead. We've been through the Covid pandemic. We may have more variants of Covid, more strains, we may have another pandemic. Do you think governments across the OECD and including here in Scotland are doing enough to plan ahead for a potential future pandemic that might come? My gut, like I would say, no. I think that's the biggest, and that might be what I wanted to mention also in relation to the first question in the beginning of the session on the dashboard. I mean, I think now it's really important to learn from the crisis, and I think that's the most important thing. I mean, I think we all agree if another pandemic were to hit countries around the world, we would not want to respond the way we did the last time that Covid hit. I think that's a really important thing too, and I think we have to learn, countries have to learn in many ways. I mean, both, I mean, and just from the budget side, I mean, it's really important to what, because we know what goes into the budget is really difficult to get out of the budget, and I think that's the most important, like how do you really see what is the urgent need, one-off expenditure, and then what really needs to be in the system for a longer time? So that's just something that really countries, I think, they really need to. So my answer would be no, I don't think countries have been doing enough, but I think they might have done maybe more if there wasn't kind of a crisis on top of a crisis. I think kind of if they would have been able to follow through with the Covid and the wouldn't have been another crisis on top of the Covid crisis, maybe then, but I think then we come in. I mean, it's also a responsibility of international organisations such as the OECD, the IMF and more to really be able to assist countries in that way. Okay, thank you. Thank you. Can I bring in Jackie Baillie, please? Thank you very much, convener. I wonder whether I could ask you about Scotland's national performance framework and how you think that's linked to policy decisions, if at all? Maybe if I just quickly start, and I'm sure that Indra, who's the performance budgeting expert, will also jump in. But I mean, I think our country, we were looking at it this week, the performance framework. And as I said in the beginning, unfortunately, we have not actually worked with Scotland, hopefully in the future. So I mean, we haven't analysed it in the details that we would have wanted done. But I think the most important thing is that, I mean, you have an excellent performance framework in place. That's, I mean, you have, we would say you take all the boxes and like, you know, you have, you have good indicators, you integrate other aspects into the performance framework. But what is the missing link from our side and feel free to correct us if it's not right, is the missing link to the budget. And I think that's kind of like, you know, you have this two standalone framework, so to say, the budget process, and then you have that really good performance framework. And I would say for parliamentarians and other decision makers, there would be, need to be a clear link between the two frameworks. So I mean, that's the first thing we wanted to say that at least from our kind of analysis we saw. So what you appear to be saying is that the framework is good. There's sufficient level of detail there, but it's the linkage with the budget that's missing. Is that similar in other OECD countries, or are we outliers? You're definitely not outliers, but what the countries are trying to do, I mean, I think like, what is the, so, I mean, you have, you have the countries that implement performance budgeting as you have done, and they just directly implement it within the context of the budget, which we would say is, is, is good. And then you have the countries, such as yourself, that have kind of like two separate frameworks, which we would say is like, it gets difficult to take into account what's put in the, in the performance framework when you're making decisions around the budget. I mean, you don't have to, and I know this is also to be noted. I mean, if you fully integrate the two processes, of course you risk, there's overflow of data. And I mean, it's going to be difficult to analyse, but doing it in a kind of like a subtle way, and at least highlighting key performance indicators, what's driving the main kind of the big spending areas is really important to have within the budget. And then also just so integrating those. You're not an outlier, but I want to still say that countries are striving to integrate those two processes. So I would say many, and I mentioned Ireland earlier, we've been working actively with that from actually doing this exactly. So I mean, and then many other countries are also trying to do the same. In order to achieve that, and given what you know of our national performance framework, is there a level of more detail required certainly for, on public display, or is the broad form kind of detail that is there sufficient? I would say that you would need to dig a bit deeper, I mean, for the performance information. I mean, because it's good to have information about the broad, the big picture, so to say, but I think if it drill down and you can actually working on kind of like the level of detail you need for each, I mean performance, what can you say, layer? So I mean, I think if you really, I mean, because you have the budget, you have the budget allocations, and it would be really good to see some link between performance data, performance indicators, and the allocations more in more detail. And then, of course, also on top of that, it's really excellent what you have within the framework, which is, I mean, information on, on SDGs, green, et cetera. So I mean, it's, it's, but I think the level of detail would be, have to be a bit more, it would be, have to be a bit more level of detail to be able to reflected in the budget. Thank you very much, convener. Thank you. If I can move to Jim Mason, please. Thanks so much, convener. Maybe this term, this, the spending review that we're using, and you've said it's a little bit different from other countries, I just wonder if we're comparing like with like. Because from what I can see, a spending review for us means a few years, it's the overall budget looking at the big picture. Whereas I think one of the examples given was in Germany, they'd had a spending review on transport, or in fact, one part of transport. So it seemed to be a much more specific area, just one area that they were looking at, but looking at it in a lot more detail. And as you said, seeing whether the spending is being useful or not. So are we really comparing like with like when we use this term, spending review? No. I mean, yes, you are correct what you say, you're not. I mean, what we are saying like the UK, and I think like when you Google spending reviews, I mean, the first thing that comes up is of course the framework in the UK, that's, I mean, they use it, that I would say, no, you're talking about the budget setting process. I mean, basically, you're just starting the budget and then you think you could talk about spending review. So it's, it's definitely not, it's correct what you note. But what we, when we hear the word spending reviews, I mean, we think about analysing existing expenditure, having like, it can be, it can be comprehensive and you can analyse, I mean, you can have a government coming in and they can decide we need to, you know, get, I don't know, 20% spending cuts or something in order to do that. We need to analyse transport, health, education, I don't know, just whatever areas that you need. And that's, as you say, as you note the Germany, it's more targeted, so to say. So what I was trying to say earlier was that, I mean, I think the UK and Scotland could have both processes in place. I mean, you could also implement this more targeted spending reviews that other countries are using on top of what you basically call a spending reviews, what we would call the budget setting process. Yes, I think, I think that makes a lot of sense. Because I think, I kind of feel, my feeling is that we do need both. And I'm not sure if someone's screen has frozen, but anyway, I'll keep talking. I mean, for example, if we take health, which is our largest area of expenditure, you know, I think we know that we're spending too much on reactive health spending like hospitals and not enough on community spending like general practitioners and other community health. But, you know, the challenge we find is how to kind of switch from one to the other. And, you know, I don't know if you think your kind of, or other countries' kind of spending review would help us if we were to somehow do that better. I definitely think that it could be useful for you to have in place this kind of, as you say. I mean, that's at least a way to be able to analyse the important, the big spending areas in a way that you would really target something specific within that area. And that's what we see in countries that they are doing. And I mean, you could find ways to find savings and reallocate the savings to other spending areas or whatever would be that decision of the government in case. But I think, I mean, because you have to, governments have no way of, like we know how the budget process works. You're always just focusing on the margin. You're just focusing on the additional money that's needed to tackle some issues that spending entities have. And you're never focusing on the entirety of the spending that is in place. So, I mean, spending reviews in that way allow governments to do that. So, I would definitely encourage Scotland to look into ways to implement this kind of a process to the country. I mean, because I think it's really the only tool that governments have, as I said, to do, to analyse existing expenditure. And definitely, there is always room to find some savings within the system. And could you give us any examples of countries where, you know, that kind of review has led to quite major changes in the way they do things? I mean, I'm particularly interested in what we call preventative spending, that we spend more to prevent things happening, be that health or crime or anything. But we've struggled, and I think other countries have struggled as well, to disinvest from the kind of secondary expenditure. So, I mean, the prevention is a really interesting point. I mean, because you have, I mean, you were saying that you would want to tackle a certain spending area and you would want to analyse the need to spend something more on that. Is that the point? Is, I think, most of us, across the political parties in Scotland, most of us agree that we should spend more on preventative spending and less on reactive. But we just, because we're already putting the money into hospitals and prisons, we find it difficult to change that. Yeah, okay, exactly. So, I mean, yes, that's a really, I mean, you want to be proactive instead of reactive. And I think that's the nature of most budget processes in most OASD countries. You're constantly in reaction mode. You're just reacting to crisis all the time and you don't get the chance to really analyse where the need is. And I think, yes, I mean, we have some examples and we'd be happy to send you some more details after this meeting. But I mean, Canada is one country that's done this. I mean, they've been actively using spending reviews specifically, I mean, it was specifically done after the 2008 crisis to really analyse and detail spending and be able to be, I mean, spending reviews is basically a tool to be able to be proactive. I mean, you analyse spending areas and you see, okay, there's not the need any more for money in this spending area, but there's more need in this area so we can move around. I mean, we have plenty of examples. Canada, we have the Scandinavian, I mean, Norway, Denmark has been extremely good with doing this. Ireland was quite active after the crisis. They are using spending reviews in a different way now, but actively analysing spending areas. Yeah, there are many countries that have good processes in place to do this. Unfortunately, what we see also is that, I mean, spending reviews, they come with crisis and then they kind of fade away when you don't have a crisis situation. They don't fade away, but they have a different purpose than you're more kind of like looking into effectiveness and value for money, kind of like instead of just being also proactive when there's not a time of crisis because that's kind of when the government just thinks that they have endless amount of money and they can just spend on whatever as we were talking about earlier. But this is what we see in countries and, as I said, we'd be happy to send you more details on those countries if needed. Okay, thank you. That's very helpful. To move on to Covid more specifically, the Scottish Government's intention was that they would have a Covid recovery strategy, which would end this coming summer in 2023. I was just wondering what your opinion was on that. Is that too soon? Should we be looking at Covid recovery lasting longer, or do we just kind of put that aside and just more deal with general problems from here on? I would say that it's a bit soon, but I mean, that's just kind of my gut feeling. I mean, we haven't been able to analyse it in detail, but I think in order to be able to learn from the pandemic, and I mean, maybe the smartest thing to do now is to shift a bit, like, you know, instead of, I mean, how can you learn from the pandemic? How can we act? I mean, because we're definitely still, countries are still trying to get out of the pandemic. So, I mean, that's at least when we were analysing this recovery strategy this week. I mean, I think it would be good to have it a bit longer. But as I said, I mean, we would, we would, we don't have, it's just something that we see as kind of like what we would in compared to other countries, and just learning a bit more from the pandemic and having some lessons, clear lessons out of the pandemic to pre-back this from happening again. Okay, thanks very much. Thanks, Gavira. Thank you. Can we move to Brown Middle, please? Thank you, Gavira. Good morning. Thank you for your evidence. I'm actually going to just follow on from my colleague's line of questioning there. We understand the cost the front-line cost of dealing with Covid. We know what the investment was in that. I'm interested in dealing with the fallout from Covid and the spending required on the fallout from Covid. One of the things we do know is that the cost of Covid was higher because of our poor health report card. A lot of people who suffered from Covid and tragically lost their lives were also tied in with things like obesity and type 2 diabetes and heart conditions. But in dealing with Covid, one of the things we had to do was drop focus on other conditions. Looking forward, those conditions like long Covid, like non-Covid-related conditions, but were affected by Covid restrictions like cancers and elective surgery and mental health, obesity and physical fitness, across the OACD countries, where is the priority here? Are we going back and looking at those conditions again and having to reinvest, or are we reinvesting back into those conditions and how we deal with those that fall out? I think that many OACD countries after the Covid pandemic, hopefully after, are thinking about mental health issues. That's a big issue in many countries. I think the problem here is, as we talked about earlier, that countries haven't really been able to take stock and stop and just think about what needs to be done to tackle those issues that have been the results of Covid, the pandemic, because of a crisis on top of crisis. Governments are just generally in reaction mode at the moment, and it's been difficult to tackle those issues. I think that's the general feeling we have with countries, with the energy crisis and everything. It's just been really difficult for countries to focus on those issues, unfortunately. Given that response here, in terms of looking ahead at this planning for the next pandemic, we're seeing we're reactive. Governments are really looking at what's in front of their face right now, rather than looking down the line. So that whole preventative agenda really has been parked for the greater thinking about that. Is that something that you would agree with? Is that something we need to try to lift our heads and look further down the track? Yes, definitely. I think that 2022 was a reaction mode, just like trying to figure out how to deal with a crisis on top of the crisis. Of course, we are hoping that now, this year, countries will take stock and think a bit about how you can learn from the pandemic. As we were talking about spending, we are also thinking about taking a bit deeper and being able to be proactive instead of reactive, as we were talking about. It's not been parked yet. Maybe it's been parked for a bit. I just don't think that most Governments have had to deal with such big issues. I'm not saying that the others are not big issues. They definitely are. They really haven't been able to tackle how to prevent and learn from the pandemic. I don't know if you feel the same in Scotland, but this is just the general feeling that we have. There's definitely willingness within OECD Governments to learn and do better if something like this is to happen again, but there's just not been the scope in most countries, unfortunately. My last question on this would be about the collection of data. Are we collecting the right data to be able to detail not just the impact of Covid in terms of the population, but the impact of Covid on non-Covid-related conditions? Are we able to disaggregate that kind of data just now to be able to plan ahead? I think this question is exactly the center of what needs to be tackled, the data issue. My feeling is that, no, we don't have the data. I mean, not on this specific issue that you were mentioning, but this is really the important thing to have. I mean, this is what countries need to now focus on. Talking about data, many countries are just in general struggling with access to data, how you gather data, how do you use data within the budget process, as we were talking about with the performance budgeting framework you have in place? I mean, how do you reflect the correct data? Do you have the sufficient IT structure to be able to create dashboards and have it kind of user-friendly? So, I mean, yes, I think this is definitely a big issue and something that needs to be tackled to just to gather the correct data and having this data to be able to analyse and learn from the crisis. I'm going to say I'm listening to all of the answers and the questions and it gives a very kind of splattered picture of where we are, certainly in my mind anyway. So, we've got a spending review, which isn't actually a spending review, it's a forward planning, but we're not actually looking back to see have we spent that money wisely. I'm sorry, you're going to have to bear with me because I'm trying to piece all this together as I'm going along. Relating back to Murdo Fraser's questions, the 2008, you talked about the fiscal consolidating that was done in 2008 and then in Covid we've just spent money regardless that it was just paid for, but there were lessons learned from the 2008 crisis. Taking, and I know that's quite a big ask, but taking the war in Ukraine out of it because of the energy situation that that gave us, could the current cost of living crisis, although it's been exacerbated, have been predicted from the lessons of 2008 by knowing that this massive spend that was happening during Covid plus the stopping of economies from working as we went like putting a dam in water? Once you lift the dam, the water flushes, what's the effects going to be? Could we have better predicted the cost of living crisis that we're in because of what we were racking up during Covid? Yeah, I think we could have definitely told ourselves that this would happen regardless of what's happening in Ukraine, definitely. I mean, I think, I mean, it was at the moment in Covid that like interest rates were really low in many countries. I mean, you were just like thinking that money was for free and then I mean, we know what happens after crisis. We know what happens when government spent a lot. There is like a day where you have to, you know, there's a payment day that you really have to look into what you've been spending. So definitely, I think everything's set aside. Yes, this could have been, everyone knew what was about to come. But I mean, I don't know if the reason was that governments just didn't want to tackle that at the moment. There was too much to tackle at the moment. But I think like, you know, and I think this is just exactly what the economists around the world were saying. I mean, there will be a day where you need to pay back. So I mean, this is, this is definitely, this is a really, and it's a really good question because yes, I think, I mean, when was it like, for the first year of the pandemic, just money was flowing everywhere. Governments were just like, you know, putting money out. It was not only health. It was like so much bigger than that. So, I mean, and we knew that how central banks were responding to the crisis as well, which was quite different from the 2008 crisis. I mean, so definitely this, everyone, everyone should have known that, I mean, we would be in this situation now in 2023. But then on top of that, I don't know if it's a way to just, it's a good shield, so to say. I don't know if that's the thing or if it's just something that, I mean, then other things happened that were, and now it's just more difficult to tackle the crisis. So, I mean, that's kind of my response to that. Okay, so we've got the kind of feeling that we could have been better planning ahead. And that then takes me on to my further confusion, which there is a lot of through this session, I have to tell you. We've got an excellent performance framework that the missing link is to the budget. There are other countries who do this where they link to. What other countries do it the way Scotland does? And why is it being done that way, as opposed to linking the budget to the performance framework? Sorry, not from Scotland's point of view, from other countries that you're dealing with, because I know you haven't had a direct link to Scotland. Yeah, so, I mean, we have one example, the Netherlands. They used to have quite a good link to the budget between the performance, like the performance framework and the budget documents, but now it's faded away. I don't really know why. Maybe it was just not political will or something. I don't know. Maybe it was too much to have. And I don't know if, Indra, if you have any other examples of countries that are doing it similarly to Scotland. Right, okay. I think he's trying to bring in, Indra. So, to just jump in, countries that have like a performance frameworks completely separate, I think that countries are actually striving to establish the link with the budget. So, the countries that, you know, in the past had it separate, it's likely that now they are trying to find the right link to the budget. For example, there are countries that, like Greece or France, they are really striving to find the right date to decide what date is the right date to put in the budget, how to be presented, and so on. So, I think it's better to look at the countries that managed to establish this link and managed to have decision-making tools and have, yes, so that the information is within the budget. But if you look, for example, in Ireland, your neighbours basically, they have a lot of performance information in the budget. But what is the right information that is included in the budget is another question. And we always talk with countries that they should be very selective of what information should be in the budget, because if you just take your framework and include all the information within the budget, it's the question is, is it usable and can parliamentarians and then your committee can make sense of it, you know. And then there is a question who develops that information. Is it ministerial finance or is it, like, who are the people that develop that performance information to be included in the budget? We always talk with countries that it should be the spending entities that develop that information to have ownership, and that's where a accountability angle comes in. So, I think I have shifted away from the main question, but let me know if you want to. You've actually led me very neatly on to when you're talking about what date is actually there, what the information is there, because Brian has just stated that we've got a bigger cost during Covid because of our particular health challenges. Is that actually correct that Scotland has had to pay more through Covid because we have particular health challenges in Scotland? Is that correct? Ae, are we paying, has it cost us more financially than other countries because of Scotland's health challenges? That's the question I'm asking. So you would say has the health cost been higher in Scotland because of the previous challenges within the healthcare system? Yes. No, I would say no. You're facing exactly the same challenges as most other countries. Okay. I mean, the problem area is health spending in most countries, so yeah. Okay. Right, I've got time. If we're talking about how we're looking forward to another pandemic, okay? So we want to plan for another pandemic. We want to tackle the current health problems that we have, but we also want to put money into preventative spending. If I was a finance minister looking at that right now, I'd be saying I'm going to have to quadruple my budget in order to make all of these things happen. How does a Government take all of this data, all of this information and all of these challenges and make it fit? How do you do that? It's not a trick question. It's generally... So if you were a finance minister, I mean, I think if I was a finance minister, wouldn't we just say to other ministers, I mean, isn't there any way to find some savings within all the money you have in place? I mean, do you really... That's also linked to, I mean, the importance of data. The needs of citizens, are they the same as they were in, I don't know, 1990 or something, like with the tech... What's been happening in many areas? I mean, because, as I said, like what goes into the budget rarely goes out of the budget. So if you really looked into the budget in Scotland and in any other country, I think there is quite a lot of room to make some spending cuts within... So, I mean, I think a finance minister would well ask the question, can we find some informed spending cuts? And that's where spending abuse, they come in handy because across the board spending cuts, I mean, you never get to analyse and you're just like where really you can make the savings. So, I mean, I think that's the question I would at least ask if I know it's easier said than done. But to ask that question, I think we can all find some savings within our envelopes. That's a really interesting point you just made, what goes into a budget never ever comes out again. So, once it's tied in, it's baked into the future spending so that that money's never lost. But, and this is anecdotal from a local authority point of view, it's one of these things where they will spend money at the end of a financial term in order to get rid of it so that they don't lose it out of the budget. So, if we've got spending reviews which are actually forward spending reviews, what you're saying is we could help to tackle those issues by having previous spending reviews to look at how the money was spent and did it give us value for money. Is that what you're saying? In very simplistic terms. Yes, definitely. That's one way of saying it. You can look at how spending has been performing over time. That's one way of using spending reviews in that way. As you say, the December fever, every kind of spending entity is like, we have to spend everything so the Ministry of Finance doesn't think that we don't need the money next year. There are no incentives and I think that's another thing that's really important to have in place. I mean some incentives for underspending. I mean, what do you like, you know, how can you really bring that to the table? And that's one thing that actually we learned from the 2008 crisis is that countries try to implement new frameworks around budgeting where actually the work kind of like trying to put in place some incentives for more accountability of spending entities incentives to really set if, et cetera. But this is really the problem because like, you know, you just focus on the margin, you always think like I need more and you never think about how am I spending all the money that you have in place. Yeah, hugely understood. Thank you very much. Thank you. That brings us to a close. I thank Alfred and Indra for your evidence and giving us your time this morning. If you'd like to raise any further evidence with the committee, you can do so in writing and the clerks will be happy to lia is with you and how to do this. I will now briefly suspend the meeting to allow to allow a change over witnesses. Thank you. I'll now turn to agenda item number two. Under this agenda item, we'll take evidence from the Scottish Government on the Scottish Government's budget for 2023 to 2024. And I'd like to welcome to the meeting John Swinney, the Deputy First Minister and Cabinet Secretary for Covid Recovery. Simon Mair, Deputy Director of Covid Recovery and Public Service Reform. Christine McLaughlin, Director of Population Health and Jamie MacDougall, Deputy Director for Budget and Public Spending. Welcome and thank you for your attendance this morning. Deputy First Minister, would you like to make any remarks before we move on to questions? I'll make some brief opening remarks. I'm grateful to the committee for the opportunity to discuss a number of matters relating to the impact of the 2023-24 budget with regard to the Scottish Government's Covid Recovery strategy and the Covid-19 strategic framework and any other issues, of course, on the minds of the committee. The Scottish Government's 23-24 budget took place in the most turbulent economic and fiscal context most people can remember. The impacts of the pandemic, coupled with Russia's continued illegal invasion of Ukraine, have created a disruptive set of financial and economic challenges that every Government must address. Energy and fuel prices are surging and inflation has reached a 40-year high. Further, the UK Government is responsible for additional uncertainty and instability. Brexit has impacted our labour supply and undermine trade with our nearest neighbours. Those are incredibly difficult times in which to manage public finances, and the constraints of devolution mean that the Scottish Government cannot borrow to meet additional costs that arise during the financial year. In that challenging context, the 23-24 budget focuses on reducing child poverty, supporting a just transition to a net zero economy, and delivering ffiscally sustainable person-centred public services. Those priorities are aligned with the principles of the Scottish Government's Covid Recovery strategy, which focus on addressing systemic inequalities and supporting those that are most disproportionately affected during the pandemic. Since the Covid Recovery strategy was published, the worsening cost crisis has made it even more critical for the Scottish Government to focus its efforts on supporting those that are most in need. The Government has consistently taken decisive action to prioritise spending where it is most needed, including in the emergency budget review. The 23-24 budget demonstrates the Scottish Government's continued commitment to prioritising those who most need support. For example, we are extending and increasing the Scottish child payment to £25 per week. Uprating all devolved benefits by 10.1 per cent, widening the warmer homes fuel poverty programme and freezing rail fares until at least March 2023. In total, the Scottish Government has allocated around £3 billion this financial year to contribute towards mitigating the increased cost crisis. Over £1 billion of that support is only available in Scotland, with the remainder being more generous than that provided elsewhere in the United Kingdom. With regard to the on-going response to Covid-19, the Scottish Government published a revised strategic framework in February 2022, which set out a long-term approach to managing Covid and its associated harms. The Scottish Government remains alert to the threat posed by potential new variants of Covid-19, and I welcome the national respiratory surveillance, variants and mutations plans that have been published by Public Health Scotland, which set out the processes that will be undertaken to identify and assess any future risk. We are supporting those plans with direct investment of approximately £7.4 million and £3 million respectively, with up to £3 million available for wastewater surveillance. The Scottish Government continues to work with partners and is ready to respond to any increase in the threat posed by the virus, whether that comes from waning immunity and new variant or other factors. In any future response, we will apply careful judgment to ensure that responses are appropriately targeted and the necessary resources prioritised. I included further details of funding arrangements for ongoing pandemic response in my recent letter to the committee. I will continue to keep the committee updated on in-year changes to the Scottish budget through corporate reporting and in-year budget revisions, and I am very happy to answer questions that the committee may have. Thank you, Deputy First Minister. I think we all appreciate how challenging circumstances are at the moment for the Government. If I can turn to questions and begin with the first question. Latest data estimates that one in 25 people in Scotland currently have Covid, and I know we're in a much better place than we were back in 2020 due to the vaccinations. But sadly, in Scotland in 2022, we lost 2,864 people to Covid and 81 people have lost their lives so far. Our thoughts go out to every family, but behind those stats it's a stark reality that Covid is still a threat. Can I ask the Deputy First Minister for an update on the Scottish Government's plans for the next round of boost of vaccinations, including the predicted timing, targeted groups and estimated funding requirements? First of all, the data that you record is very sobering data about the loss of life in relation to Covid. It demonstrates the importance of taking all necessary measures to protect the population against Covid that are appropriate in the context. The commitment that the Government has given to the vaccination programme has been a significant protection for wider population health in relation to Covid. When we look at the vaccination programme, it is essentially set out and targeted at a range of particular groups that are identified by the Joint Committee on Vaccination and Immunisation. The Scottish Government continues to do what it has always done, which is to follow the clinical advice that is given to us by the JCVI. The programme of Covid vaccinations is available to a wide variety of groups, older adults in care homes, people who are aged over 50, frontline health and social care workers and those in the five to 64 age group who are at risk from Covid. The vaccination programme is targeted towards those individuals. Obviously, we have a variation in uptake at different groupings. For example, in the older adults in care homes, the uptake in Scotland is 89.3 per cent. Amongst the over 65s, it is at 90 per cent. It is aged 50 to 64. It is at 64.3 per cent. The frontline health and social care workers vary around about 50 per cent. There is a variety of different, but these are generally pretty high levels of uptake of vaccination that we have available. In relation to cost, convener, the expected expenditure on vaccinations in this current financial year is expected to be around about £170 million. That is not including the cost of the vaccinations themselves. Those costs are dealt with as part of the four nations programme. If we were to opt out of that programme, we would be likely to get a consequential but for reasons of efficiency and procurement. We have habitually taken part in a four nations programme on flu vaccinations, for example. That is essentially the cost of the delivery of that programme in Scotland. We anticipate and are planning on a relatively similar amount in the 23-24 forecasts. The final point that I would make, convener, is that in relation to the advice from the Joint Committee on Vaccination and Immunisation, we have followed that this year. We would expect to follow that next year and to fund it accordingly. We, of course, await any further advice from the JCVI about their view about what are the appropriate steps to take for a vaccination programme for the next year. We anticipate the current programme to end at the end of March. Can I ask the Deputy First Minister to provide an update on the news reports that the ONS coronavirus Covid-19 infection survey for Scotland could be shut down in the spring and what implications it will have on monitoring Covid and also the recovery from Covid? I invite Christine McLaughlin to provide some information on that, but I think that the one point that I would like to make to the committee is that the nature of where we are with Covid now is that we have a significant amount of population health protection as a consequence of the effectiveness of the vaccination programme. Therefore, the necessity to have in place the scale of arrangements that we had in place during the height of the pandemic is unlikely to be the case, even if we have a new variant of Covid because the level of population protection is so high because of the vaccination programme. Having said that, it is, however, important that we have effective surveillance and monitoring arrangements in place to ensure that we can accurately predict whether we have a wider problem that has to be arrested. Of course, some of the information that I have placed on the record in my opening statement sets out the type of societal assessment that we are undertaking routinely to ensure that we have those preparatory arrangements in place. I invite Christine McLaughlin to say some things about the ONS survey. Thank you, convener. Discussions are still on going across the four nations because the ONS study has been, as you will know, a four nations consistent approach. No decision as yet that I am aware of has been taken on that, but certainly it is part of the considerations for the right scope and shape of the surveillance programme going into next year. However, what it would say is that the ONS study has been leading and it has been very useful to have that data, but it is one of several sources of data that we have. I think that you had the Public Health Scotland before talking to you about, in particular, the surveillance approach that we have. We have invested in some new areas of surveillance that we did not have in place before or not at that extent. Things like the community surveillance programme, where there is a rolling programme of tests within community settings. Similarly, within acute hospital settings, there are samples taken every week and tested and sequenced. They are also part of that surveillance that we have. Wastewater testing is a technology that you will know that we did not have before and has been so successful that not only are we looking to maintain it but we are looking at other uses for wastewater testing. Testing for polio being one that we have put in place recently. We can now even sequence wastewater samples. That is a technology that I think that certainly our public health teams are seeing as really valuable going forward. We have also got the siren study, which is routine testing that healthcare workers take part in. For us, surveillance is all of those things taken together. The ONS study has been a very unique component of that. It is also a very expensive part of the surveillance when you compare it to things like the community and the hospital surveillance. It just needs to be looked at in the round. The strength has been that it has been consistent across the four nations, so you can see what is happening and you can understand data into regional components. We never look at ONS on its own. We always look at it with the other sources of data to see whether they are all saying the same thing. If the ONS study was not to continue either at the same scale or we did not take it forward in the four nations spaces, then we have already been working through with our Public Health Scotland and colleagues whether we would look to bolster some of the other surveillance that we have in place. I think that the weakness might be that you would not then have consistency across the four nations as we go forward. It is very much a live part of our discussions, and we are a partner in that rather than it being a sole Scottish decision at this point in time. I think that we have taken evidence on surveillance, so the committee is familiar with it, but I will move on to my refresher, please. Thank you, convener. Good morning, Cabinet Secretary and colleagues. I am just exploring a little bit further just how Covid-related measures will be funded in the budget for the coming year. You mentioned the booster vaccination scheme that we had in exchange in the chamber yesterday about that, you will recall. Is it expected that, in the coming year, there will be another programme of the booster vaccination scheme? Has funding for that been set aside in the budget for next year for that already, or are we just waiting to see what happens elsewhere? We are working on the assumption that there is a further booster programme that will come forward, and, as indicated in my earlier answer to the convener, the sums of money that are around about the same level that we have had in the budget for this year is predicted to be deployed in the next financial year to support a booster programme. Obviously, if we get advice that says that it is not necessary, that is not required, but a prudent assumption at this stage would be that there will be a booster programme. If we go to a situation where there was another variant or perished the thought of another pandemic that occurred in the coming financial year, and there was a need to step in with new interventions such as bringing back track and trace and so on, is there anything in the budget to fund that, or would you be reliant on Barnett consequentials from what was happening elsewhere in the UK? Essentially, we are making provisions in the budget for what I would describe as a baseline level of preparedness for further challenges from Covid. Although I do want to make a distinction in responding to Mr Fraser's question between a new variant and a new pandemic, because those are two fundamentally different propositions. A new variant, on the basis of what we know just now and the variants that are taking place, the level of population-wide vaccination protection, we would be fairly confident would enable us to withstand the effects of a new variant. Given the level of protection adherent in the vaccination and given the nature of variants that are emerging at this present time, a completely different proposition or a completely different pandemic, if I use my language more precisely, is a different matter altogether. That could conceivably require us to put in place the type of arrangements with which we have had to have experienced in the course of the last three years. Obviously, we hope that that is not the case. However, in enabling us to be able to respond to all those scenarios, we have certain provisions in the budget for the surveillance activity that Christine McLaughlin has put on the record to the committee this morning. We have provisions for a level of testing that is in the budget. We have provisioned for the delivery of a further vaccination programme. We also have provisioned for a level of workforce capacity, PPE issues, equipment considerations and some wider factors that are built into the budgets just now. That is funded from the overall budget that is available for the health and social care portfolio, which is in excess of £19 billion. Obviously, there is a certain amount of consequential funding from the United Kingdom Government that comes generally for health and social care priorities as a consequence of decisions made in the autumn statement and announced by the Chancellor of the Exchequer. However, the Scottish Government is putting in more than those Barnett consequentials into the health service. It was an explicit part of the budget statement that I gave to Parliament in December that I was making tax changes and applying tax increases to enable me to be in a position to better fund the national health service that we have been able to do. That money has been set aside in the overall health budget. Should that money not be required, that could then be redeployed elsewhere, could it? On the level of provision that we have here, I do not really think that that is the case, to be honest. The level of PPE preparedness, the committee will be familiar with the importance of the PPE provision in general within all aspects of the health and social care system, so that would be expenditure that I would expect to undertake. I cannot be certain, but it is likely that we will have a booster vaccination programme, so I think that that money will be spent. The testing arrangements are a level of preparedness so that we maintain a capacity to undertake testing, to be able to increase testing from where it is just now. Obviously, that creates a platform for us to increase very significantly, should we be required to do so. I think that the best answer that I can give is that my expectation would be that this expenditure will be required during the financial year, but of course we undertake regular monitoring. As the committee will appreciate from the updates that I have provided in the wider financial situation, there can be very, very wide variation in demand and pressures on the budget in general for the Government over the course of a financial year. Even if we did not have to spend the money on that, I would imagine that there will be something else that will come along that will demand further expenditure. Okay, thank you. Lastly, can I ask about the Covid recovery strategy, which is currently due to wind down by the summer of this year? Is that still your intention to wind it down on that timescale? I am not sure that I would express it in the way that Mr Fraser has expressed it, because I understand where he is coming from from the 18-month perspective. However, if one was to look at the themes of the budget that I set out in December and look at the Covid recovery strategy, I think that a dispassionate observer would see a very strong link between the themes of the Covid recovery strategy and the themes of the budget. The way that I would probably express it is that the Covid recovery strategy is being mainstreamed within the Government's budget and policy programme, so that, for example, the emphasis that we place on the shift to person-centred public services is absolutely central to the budget programme. The emphasis on eradicating child poverty, which is implicit in the Covid recovery strategy, is central to the budget priorities that I set out in December. I think that the best way to express it would be that the strategy is being mainstreamed, and many of the indicators, the focus of the strategy and the indicators of performance are very much part of the performance framework of the Government. I am very conscious that I understand the difficulty and the uncertainty in predicting what is going to happen with the pandemic, particularly as new variants are being experienced, but what I see is population testing largely ended. What I also see is the Lighthouse Labs closing. Antiviral medication has been suggested to me not getting to people in time, and so far in Scotland we are not yet using prophylactics. All of these things will vary depending on the prevalence of Covid at any one time. What I want to do is explore the flexibility and surge capacity beyond what you have said that would allow things to be flexed up really quickly. I am also wondering, in response to the murder that you talked about, additional funding for the health budget. Are those measures covered by existing Covid consequentials, or have you had to add to them? I will try to deal with quite a number of the issues in there. First of all, just as an observation, Jackie Baillie set out her personal experience of antivirals. I have some personal experience of antiviral distribution and I cannot complement the health service and the arrangements more for the experience that my family had of the availability of antiviral drugs, which stunned me, frankly, about the efficiency of the delivery and the impact of the antivirals for which we were certainly profoundly grateful in our household. On the flex capacity, it is a very careful judgment to be made here. What I would like to reassure the committee about this morning is that the Government's strategic approach and our budget provisions are designed to create an appropriate platform from which we could increase provision. It is a higher level of preparedness than was there prior to the intelligence on Covid. It is an appropriate platform that is available. Christine McLaughlin has gone through the information on wider population surveillance, which we have developed technologically in a very short space and time remarkably and provides us with a very significant level of intelligence that can be established. Obviously, we are wanting that information carefully to see any signs of development and deviance of performance that raises concerns. We obviously are plugged into international networks on new variants and are wanting those very carefully. There is then a level of testing capacity, which is—we have maintained the laboratory at Gartnavel—which has the capacity to process, as things stand just now, 60,000 tests a day, so that is a formidable level of testing capacity. We also have testing laboratories in—sorry, 60,000 a week, my apologies. There are also regional PCR testing arrangements that we have in different parts of the country. We have stocks of lateral flow devices that can be deployed for the emergence of a new variant. Obviously, the new variant plans that can be brought forward should be required. Of course, we are following closely the thinking and the expertise of the pandemic preparedness committee that is led by Professor Andrew Morris, who has given evidence to the committee to ensure that we are maintaining an approach that is appropriate to that level. As I said in my answer to Mr Fraser, there are a variety of other investments that are made routinely within the budget programme on PPE and other factors. Lastly, on the question of consequentials, it is a difficult question to be precise about. Essentially, if we look at the statement given by the Chancellor of the Exchequer in November, a rising out of that was, if my memory says me right, a consequential for health and social care of something—I think it was about £300 million of that order. It was in fact a—we have added to that to uplift the budget by about £1 billion. As Jackie Baillie knows, the UK consequentials do not come with a badge on them other than a badge of health, and we have generally taken the consequences of health and put them into health and social care. They do not come with a badge saying that Covid consequentials or whatever the uplift is in the UK—in the English departments gives rise to a Covid consequential into the Scottish Government. We have increased that by the contributions that we have made. Can I ask about long Covid? I should say that, in relation to the actual costs of the vaccine, that is handled by a four nations agreement with the UK Government, handled outwith all the sums of money that I have talked about there. In theory, if we were to say that we are not part of a four nations arrangement, we would get a consequential for that. On a whole variety of different vaccination programmes, we have generally worked on whether it is flu or Covid, we have generally taken the view of the logistical and procurement advantages of seeing in a four nations arrangement. No, I understood that from your previous response, but that is helpful clarification. Long Covid, I think that we would agree as a considerable challenge, not just in health terms, but actually in economic terms. The number of economically inactive people has increased substantially as a consequence. There was 3 million announced this year for NHS services to help with this. That is when there were 77,000 people affected. There are now 180,000 people affected. Given that this is not just a health intervention, but it is an economic one, what plans are there to perhaps increase the amount that is available for the treatment of long Covid? I agree about the importance of long Covid and ensuring that individuals who experience long Covid are supported in their recovery. I would challenge Jackie Baillie on the point about a significant increase in economic connectivity, because that is not what the data says. The data was published just on Tuesday. The economic connectivity in Scotland has reduced by 0.8 per cent over the course of the year. That is a larger fall in Scotland than in the rest of the United Kingdom. I appreciate that there will be ebbs and flows. There will be people who are become economically inactive because of long Covid, but just for the accuracy of the data that the committee has provided, that is the position on economic connectivity. I think that there has been a significant amount of discussion about what is the appropriate means to address the experience of long Covid that individuals have. Fundamentally, there will be a need for health interventions to support individuals to do exactly that. It is very difficult to disaggregate what is being spent within the health service on supporting people with long Covid, because that will be felt in a whole variety of different areas, whether it is in the services of community settings, in the work of general practitioners or in more specialist clinics where people will be having support to provide them in addressing the experiences that they have. There will be a need for the health budget. As I have said, the health budget has been increased by more than £1 billion in the course of the year to provide the capacity to enable us to meet the health needs of the population, which will of course include people who have experience of long Covid. It is important that individuals who have that experience are supported in the appropriate way. Jackie, can I move on to John Mason? We will come back to you if we can get... No problem. We are just short of time, John Mason. Deputy First Minister, you answered the convener earlier about vaccinations for this coming year or how they are currently going. The figures for over 65s and older adults in care homes seem very good. Some of the care worker figures do not seem quite as strong. You said around or below 50 per cent specified front-line social care workers 39.8 per cent. It seems quite low. Do you have an explanation for that? I cannot give a definitive explanation to Mr Mason. For example, in front-line social care workers, the uptake rate is 63.2 per cent. There are other categories that give a slightly lower figure that is involved. A lot of that can be done with convenience and access to services. Some of it can be done with the fact that people performing these roles might have to take time to go to do this when they will be under pressure to fulfil their social care tasks. That is quite a conundrum for individuals. Those are people who are on low pay. Therefore, they have difficult dilemmas about how they spend their time. You do not think that there is an active resistance to them or that misinformation continues to come to me in social media. That is not having an impact. I do not think so. My sense would be that the numbers are increasing week by week. We are not at the end of the programme. We are in January. We still have two and a half months. We are trying to make it as easy as possible for people to access those opportunities. The clinics are widely available across the geography of the country, but I accept that for people in a low-income situation who might have to travel somewhere else, which might involve the cost of travel, it is a difficult thought. That is why we are trying to take all the practical steps that we can to support people in those circumstances. When the committee wrote to you, you replied on the 20th of December in your letter and annex with the questions. The first question was about Covid recovery and the cost crisis, and specifically the committee had been asking about whether the inflationary pressures, the cost crisis, are negatively impacting on the Covid recovery strategy. We have a page of an answer, but I was not very clear having read it. Can I press you on that point? Is the inflationary pressures impacting on the Covid recovery strategy? I will sharpen up my language for Mr Mason, because my long and detailed text is designed to say that, of course, the inflationary pressures are putting enormous pressure on the Government's budget in general and will inevitably put pressure on the Covid recovery strategy. Mr Mason, from his membership of the finance committee and his assiduous following of financial matters in the Parliament, will be pretty familiar, I think, with my current worry list. Top of my worry list is the fact that, because of the fact that there has been no restatement of the budget available to the Scottish Government during 2022-23, given that there has been no additional consequential funding since the start of 2022-23 to deal with inflation, which was—the budget was set when inflation was expected to be 2 per cent. Inflation was at 10.5 per cent yesterday, so there has been no consequential funding to assist us, so therefore the Government—and the Government—is interested to wrestle with legitimate pay claims from public sector workers. As a consequence, I have had to take some very difficult decisions to reduce public expenditure and to try to balance the Government's budget. At the same time, I have made provision for the Government to increase the value of the Scottish child payment to £25 a week, which is a direct investment to support families struggling in the cost crisis, which I know will be of benefit to many of Mr Mason's constituents. After all that, Mr Mason will be familiar with the fact that I am still wrestling with a predicted overspend on the Government's resource budget in this financial year of between £200 and £500 million, which is unprecedented for a finance minister to be wrestling with a problem of that magnitude so late in the financial year. I completely agree with that. Is there anything specific in the Covid recovery strategy that you would say has suffered because of all of this? I think that the pace of development is perhaps a challenge there, although I would counter that by saying that the fact that we avoided local authority industrial action significantly across the country helped to maintain the impetus around the delivery of the Covid recovery strategy. The fact that we have avoided industrial action in the health service so far is a welcome consequence of the Government taking on the additional financial strain of wrestling with the public sector pay claims that we have satisfactorily addressed. On that point, the suggestion had previously been that the public sector staff numbers as a whole would go back to pre-Covid levels. Has that commitment been affected by the pay increases and so on? No, we will have to work carefully with trade unions and staff associations over the course of the four-year profile of the spending period that we have available to reduce staff numbers. We face a situation in which the profile of the four-year spending envelope that is available to us would be characterised as less challenging in the first two years, extremely challenging in the last two years. Those are the provisions of the current United Kingdom Government. The opposition in the United Kingdom Parliament has made it clear that it will sustain those numbers should the election result in a change of government. I think that we have to prepare on the basis that we will have to, in dialogue and partnership with trade unions and staff associations, carefully reduce headcount over the course of the next four years. On a slightly different issue, we just had a session with the OECD. I do not know if you were able to see any of that because you obviously came in straight after that. It was quite an interesting discussion about spending reviews. I think that we kind of established that their definition of a spending review is slightly different from our definition of a spending review. Their definition is more that other countries look at a specific area. One was Germany, they looked at transport and had a spending review of transport and really looked in-depth at what they were already spending and to see if they could make savings and move forward. I was asking them, do you think that that is something that we could do with the health service to say, well, how can we are spending all this on reactive spending? We would like to move more into preventative primary care. Is that something that we could learn from? I think that the feeling overall was that maybe we could learn from other countries. Do you think that there is anything in that space? I realise that that is a new topic. Do you think that we can do anything about examining present expenditure to see if we can free up more, or are we already doing that? I feel as if I am living in a perpetual spending review, to be honest, because all of those elements of challenge that Mr Mason has put to me, we are wrestling with on a constant basis. When I talk about the public service reform agenda, which I spoke of extensively in the budget statement in December, that is us actively challenging the way in which public bodies are operating with the objective of delivering greater efficiency. Other committees of Parliament, I was at the economy committee yesterday, and I was being challenged on some of the spending envelopes that are available to enterprise agencies, for example. Those spending envelopes of their own volition essentially challenge the existing way of working. They require savings to be made to ensure that organisations can live within those spending envelopes. In the health service, the pressure of increased demand and increased pressure from pay settlements force a requirement to constantly review the efficiency and challenge the efficiency of how we operate. There is also a fundamental other element of thinking, which is the work that is going on on a continuous basis to essentially deliver, for example, the Christie principles, which Mr Mason will be very familiar with, which essentially operate on a presumption of the earlier we can make an intervention, the better it can be, and the more that will help us to avoid acute interventions, because acute interventions, wherever we bads them, are expensive. I think that it would be fair to say that we have struggled with that, haven't we? No, I don't think that we have struggled with it. I think that a lot of reform has actually been undertaken, which I don't think... I think that there's a bit of a kind of commentary. I'll look at all these magazine articles about the Christie commission and all the rest of it, and I don't actually think that people have been looking at that closely at what's actually been going on within public services and the focus on early intervention and the steps that are made within our education system on early intervention, or the steps made in our health service and early intervention. Is there more that could be done? Of course there is, but I do think that a lot has been achieved. But essentially what we are trying to do is to avoid crisis and acute interventions, because the more of them we have, the more difficult the challenges that we face. If we were to look at a lot of the evidence that is being presented just now about presentations at accident and emergency in Scotland, a lot of the evidence indicates that people who are arriving at accident and emergency are much more ill, much more frail, than would have been the case in the past. That's, I think, a combination of the extension of longevity in our society, some of the ability to support people at home in the fashion that we have been able to do so, and actually the success of some of the preventative and early intervention. But if we have a population that has got, and I try to word this as carefully as I can, more older people in it than it used to have, then inevitably the pressures of frailty and old age will be more acutely felt within our health service than was the case in the past. I'll probably explore this. That's why I say demand requires efficiency within the health service. I'll move on to Brian Whittle, but I will try and get back around to members. Let's explore that, because I say welcome, cabinet secretary. In terms of Covid recovery, we know the cost of having dealt with Covid previously, and you've indicated to other members that, looking ahead, there is a budget there that assumes that there will be further Covid spending done. But in terms of dealing with the fallout of Covid, there's obviously a cost associated with other conditions that are affected by the Covid restrictions. We know cancers and elective surgery and mental health and obesity and physical fitness etc. We know this to be true, which is why I was really interested in your last answer. Given that, in terms of Covid recovery, is the budget going to reflect our ability to deal with that fallout from Covid, because it is inevitably going to turn up somewhere in the ledger? I think that the budget, in my opinion, provides the appropriate resources in a variety of different areas of policy to assist Covid recovery, because Covid recovery is about not just within the health service, but within the education system and the justice system. We have people waiting for court cases to be resolved, which have been delayed because of Covid. I have to make sure that the burden of a victim is lifted by having those cases resolved. I have to allocate resources to a wide variety of areas, and I have endeavoured to do that across the Government's budget. There is a finite sum of money available. I have chosen to expand the amount of money that is available by increasing tax on higher income earners. I know that that is not supported by Mr Whittle's party, but I have made that choice to make sure that there are more resources available to maximise the resources that are available to invest in public services. That will be the case, but I also have to be candid with the committee that it will take us some time to recover from Covid, because it has been a very significant and disruptive force within our public services and our society. We await with interest to see whether raising of taxes actually puts any more money into the budget. I can confidently say that I will do that. I have heard that conference before. I can demonstrate it without turn data, which gives me confidence about the future data. I will go back to my original question about the funding of non-Covid-related conditions as I am recovering from Covid. We know from data that in those most affected with Covid, in those with the worst outcomes, had other health conditions attached to them, like obesity and type 2 diabetes and heart conditions and many other conditions like that. Looking ahead and discussing the preventative agenda and prepping for future pandemics, given that all Governments are dealing with what is right in front of them at the moment, and it can be difficult to look further ahead. Given that we know the impact that Covid has on outcomes of those with other conditions, wouldn't it be prudent to start looking at how we tackle our poor health record in Scotland? I know that the Cabinet Secretary knows that I am very interested in it. Wouldn't it be prudent for us to start at least looking at how we can tackle that poor health record in terms of future pandemics? I want to assure Mr Whittle that we are constantly looking at how we can improve the health of the population proactively in that approach of early intervention. There are so many different ways in which we are trying to do that through the encouragement of people to carefully manage and prepare themselves and their health to exercise, to take all the necessary precautions that they can to maintain their physical fitness and their general health and wellbeing. Across Government, there will be a range of different areas of activity that are taken forward. Across local Government, in the third sector, there will be a whole range of different interventions. The topic that Mr Whittle raises with me is certainly a very important issue. I do not think that it is just pandemic-related, it is a point in general that we should be attentive to and focused on how we improve the health and wellbeing of the population. So many of the public messages of the Government, so many of our policy interventions, whether it is on minimum unit pricing of alcohol or the banning of smoking in public places or the exhortation to exercise, the daily mile, all those different types of things, are all part of that agenda. I am also not going to sit here and say that there are more things that we could do. The Government is certainly very open to dialogue with colleagues in Parliament about how we can maximise that work. I think that we agree on the outcomes that we want to have in here. I think that what is important is outcomes. Currently, we have a poor health report card compared to many countries in Europe. Before Covid, I was... This is a topic that I am really exercising with. As you said, Cabinet Secretary, I agree that a lot of positive health outcomes will be tackled out with the health service. However, where we currently stand is a... Correct me if I am wrong, Cabinet Secretary. I am sure you will. 44 per cent of our budget now is spent on health. With a reduction, it will be 27 per cent in local government. A lot of the interventions that will be required to deal with the issues that are impacted by Covid will be dealt with at local government. How do you square that circle, Cabinet Secretary? The local government budget is going up by over £550 million, so it is not being cut. It is going up by £550 million. The percentages of budget are moved. I am dealing with cash, and local authorities are getting £550 million more next year than they got this year. If we want to dress it up, that is an increase. That enables us to sustain our delivery of the type of interventions that Mr Whittle is raising with me. We do come back... I do not want to sour the atmosphere this morning, but we come back to hard choices here. That is government choices, isn't it? Precisely. I have made them, which is why I make my point about tax. That is why I am challenging you. I have made a very hard... Well, with the deepest respect, Mr Whittle is not challenging me. Mr Whittle is asking me to spend money without showing to me where it is going to come from. Unless he wants me to take money out of the health budget and allocate it to local government, he has to come up with an answer for it. I am going to challenge the Conservatives on this all the way through this budget process, because the money has got to come from somewhere. We have an ageing population. We have a population that has a larger frailer population, older grouping within it. That will therefore necessarily increase demand in the health service, which is why we are putting more resources into the health service. That is why I increased tax to make sure that I could increase the money to the health service to address those issues. Mr Whittle would also want me—he will not disagree with me—about the extra money that I have put into the court system to make sure that we tackle the backlog so that victims have their cases addressed. He will not disagree with me about putting £550 million extra into local government, but somehow I have to magic out some more money. Those are the hard realities that I have confronted them, but others I have got to confront them to. The final question, if I could, is about one of the questions that we asked the OCD, which is about data collection and deployment. One of the issues of looking forward and looking into recovery from Covid and potential issues with future pandemics is that collection of data around not just Covid-related data, but the other conditions that we discussed earlier and where the director of travel is going in. Generally speaking across the OCD, not just within Scotland, there is a lack of that data. Having gathered that data, we cannot disaggregate that data to shape the way in which we tackle the health issues associated with Covid going forward. I have talked about an IT structure many times. We do not have an IT structure that allows that to happen. In fact, in very little, few countries have an IT structure to allow that to happen. Do you think that investment in that area—would you agree with me that investment in that area is something that we should do as a baseline going forward? I think that there is a very significant role for a greater use of digital connectivity in our public services, enabling us to better manage information about the way in which people interact with their public services. People of Mr Whittle and my generation have large, complex IT systems in their minds. Of course, we all have phones that have now got very different apps on them, with all sorts of flexible information being gathered and utilised and all the rest of it. There are opportunities to better utilise that data. Indeed, if I think about some of the apps that I have on my phone and what they tell me about my fitness, my health and wellbeing, how much I am exercising, sometimes they are reassuring and other times they are a wake-up call. There is a lot that can be done to try to address those questions. I am very open to how we explore that. We collect a lot of data. We have access to a lot of data. Whether it is all the right data sets to help us to address some of those questions is a matter of debate, but I am generally open. It is a critical part of our public services reform agenda and what we are setting out to public bodies and what we are expecting of them as we go through a really challenging spending period is how a deck it is using digital connectivity to support the finding of the solutions that we are looking for. I will be very quick. I am slightly disjointed, but let me go back to the stat about economically inactive, because I think that you would accept that the previous year there was a massive surge and what happened on Tuesday with the stats is that there is a small reduction on what was a very high number. However, my question is about the national performance framework. I think that we agree that it reflects the outcomes that we would want to see and want to achieve, but it is not linked to the budget. I understand that you are planning a refresh of the NPF this year. Would you take that opportunity to commit to linking the two and generating the additional data that is required so that your money is going to what you say your priorities are? I think that that would be a significant step forward, Deputy First Minister. We went from, this is particularly disjointed to, this is a series of sweeping generalisations, if I may say so. On the economic connectivity point, the data that I put on the record is that in 12 months, the level of economic connectivity has fallen in Scotland by 0.8 per cent. That is a significant fall. If you look at economic connectivity, I think that the number is 21.3 per cent if my memory serves me right from Tuesday. I may not have heard that decimal point right, but it is of that order. Jackie Baillie said that it was much higher. I do not actually think that it was, but I am going to go away and check the data set. However hard we try, there will be a sizable proportion of that economic connectivity level that will persist, because people genuinely cannot be economically active. Jackie Baillie and I would agree on that point. Getting a fall of 0.8 per cent of a percentage point, let's for example say that economic connectivity, the lowest we could ever hope to get it, was let's say 15 per cent, which is still a large number, but there are a lot of people who genuinely cannot be economically active. A fall of 0.8 per cent from 22.1 per cent to 21.3 per cent and the minimum level was 15 per cent, that is a very big fall in one year. The illustration though was that the surge was about long Covid. I will go and look at the data so that I can complete my view of this. As for the other sweeping generalisation, I believe that the choices made in the budget were made cognisant of working to achieve the outcomes in the national performance framework. I am certainly prepared to consider, and this is where I am not setting out my last word on this, I am prepared to consider misalignment of budget priorities with the national performance framework. When I was answering Mr Fraser's question about the Covid recovery strategy and I was saying that I would view it as being mainstreamed, I took that view because the Covid recovery strategy sits comfortably with our aspirations in the national performance framework and the budget likewise sits in there. I am very open to discussions about how there may be any misalignment between the budget and the national performance framework and I am happy to engage on those questions. I apologise, cabinet secretary. My questioning has been picking up little bits of all the stuff that has been asked, so you might get jumped about all over the place, so I apologise. It will not be an unusual experience in our conversations with the family. Exactly. That link between the spending review and the budget is one of the things that was talked about by, I can't remember her name, Alfred Trigolveditor, lead spending review machine at the Government of the OECD. Is that something that you recognise that there is a problem or do you see it as a problem or is it something that you already had in your radar to look at? That is why I am not dismissing the points that Jackie Baillie makes to me because I recognise the absolute importance of this point. What is the point of a national performance framework if we are not aligning our policy interventions and crucially the budget that goes with our policy interventions to support those outcomes that we are trying to work? So there must be an alignment there. My contention is that, I am very mindful of that point, my contention would be that in taking budget decisions I am trying to do as much as I can to align our budget with the successful delivery of progress on those national outcomes in the national performance framework. However, if there is a balance that we could strike better, if there is an approach week, if there is a level of emphasis that we could put in particular areas, I am very open to that conversation. However, I do assure the committee that that is an endeavour that the Government takes seriously. I am going to jump around. John Lennon mentioned earlier on that he was talking about the mainstream, the co-recovery strategy of becoming part of the mainstream and the link between the spending review and how you look back. It was one of the things that we picked up in the previous evidence session. The co-recovery strategy of becoming part of the mainstream, one of the comments that came out of the previous session was that a budget is created, it was done, it goes into the budget and it becomes stuck, it is there forever. And as the spending goes on over the years, that bit that you did at that particular time for a particular reason stays there and the spending review, the way we currently do it, never looks back to say, well, is that spending still relevant? And that kind of was emphasised by the fact that we are in response to Murdo, that the co-recovery strategy funding is now becoming part of the mainstream. Is there a facility for what you guys are doing? You possibly answered this when you spoke to Brian Leller on, where you go back and say, right, okay, we spend that, we put that in the budget five years ago, we put it in 10 years ago. And the point that I highlighted, I'm sorry, this is very rambling, please bear with me, the point that I highlighted is that local authorities will quite often get to the end of their budget year and go, right, we've got to spend half a million quid here to get rid of it so that we don't lose it in our budget. Is there any mechanism that the Government currently uses to say, right, are there incentives, that was the phrase that she used, are there incentives to look at your, the budgets that you're trying to spend in order to keep them, are there incentives to not spending them in that way and therefore redeploy them in a more sensible way? I'm sorry if that is very... I understand exactly the point that's been made, but I think the incentive in challenging existing spend is to ensure that spending is properly aligned to the Government's objectives. So do the spending reviews go back? All the time, finance ministers do that, I'm here in a temporary capacity but I've had to look very, very hard at financial commitments in this financial year at how we're spending money because I've had to find money, so I've actively, I've announced this to Parliament, I've taken £1.2 billion out of predicted expenditure within the Government, so I've gone to different parts of the Government and said, well, those measures can't go forward, I'm going to have to pull that money out, you're going to have to do without this or do without that. So those exercises go on, that's been done in a very abrupt sense because of the financial challenges of this year, but you know we do periodic spending reviews but we will review provisions that we are making and things we're funding, so let's take for example a programme like early learning and childcare, we've substantially expanded early learning and childcare in the course of the 15 years of this Government when we came to office, I think the level of early learning and childcare provision would be about 425 hours and we've put that up to 1140 hours. We've done that on the basis of the early intervention advice, the earlier we can engage children in good high-quality early learning and childcare, all the evidence shows their educational and personal outcomes, their health outcomes will be better. So we've made that choice, we've invested in it, if we did a spending review tomorrow I'm very skeptical that we would come to the conclusion that we're not going to do that any longer. But there will be other things that we do and that we're committed to if we might say well that there is a time limit to what we can afford in these priorities and we might change them, but that's the active purpose of a spending review to determine what more we need to do. A spending review also has to take into account changes in the population, so the point I'm making about is a deadly serious point about the increased number of elderly people in our society. There's a lot of very, very fit, healthy and energetic people who are older in our society, but inevitably there will be people who will become frailer and there will be more of those individuals and those individuals have to be supported by our public services, ideally in their own home, but in some occasions it may well have to be in an acute hospital setting, which is by its nature a very expensive setting to support. The cost of Covid to Scottish budget, as Brian was making the point, that we have bigger challenges because of our distinct health challenges, which our previous witness didn't agree with, but those challenges that we've got, the preparedness for another pandemic, we had previous evidence, I'm sorry, this was jumping around, I'm picking up pieces, we had previous evidence about PPE, do you still have the funding available to have that 12-week rolling stock? When we took the evidence, it was very much in my mind. If we're going to have a stockpile of it, it will go out of date therefore it's a waste, but we were reassured by NHS Scotland, I'm pretty sure it was NHS Scotland, who said that they have this rolling contract. Is that because of the budget repressures that you're facing? Is that under threat at all? No, we're projecting, the maintenance of that 12-week stock, which as NHS Scotland will have explained to the committee, is done on a rolling basis, is supported by the budget provision. The stock is used, but we've got 12 weeks' worth of it, and we're using the budget to enable that to be constantly replenished, but as it's replenished, at the other end of the warehouse, if I can put it that way, it's been used. Right, okay, there's two final quick points I'd like to make if that's possible. Jackie Baillie is talking about the economic connectivity, it's something that we've looked at in this committee, and it's anecdotal. From my own, after we took that evidence, I started talking to people in my peer group and my age group saying, why did you retire now, you're mid-early 50s, and there's a definite cohort that came out in the evidence session, who were simply not going to go back into employment on the basis of lifestyle, pension, provision and all the rest of it, but what I am hearing is, if employers would be far more amenable to part-time, a lot of these economic and active people who are more than capable of going back into the workforce would do so on a basis that wasn't where it was previously, and I've been given evidence of 240 jobs advertised within a big organisation and only one of them was part-time, so there's possibly something that the Government might want to look at in terms of relationships with industry, is there ways that you can change the way you're working? That's purely a comment. I think that we should be open to that, because along with the other data that I was talking about, employment levels in Scotland are at the highest level on record, and unemployment is at a very close to a historic low of 3.3 per cent. As Mr Fairlie will know from his constituency engagement, which is very similar to the profile of my constituency, you can't speak to a local employer without them in short of employees, so in whatever sector we happen to talk about public or private sector. The need for us to be flexible about engaging people in the workforce is an absolutely central challenge for us, and the Government is doing some work on that in relation to the four-day working week pilot, and various other measures of that type. There will, of course, be some complicated interactions around about pension provision, and this is particularly the case in some circumstances in relation to the health service. Some of those issues are not immediately under our control, they are more pension rules than they are employment rules, and I think that the more we can have an open and constructive dialogue with the United Kingdom Government, who will regulate many of these issues, the better to address some of those issues. Okay, one final point, convener. We took another evidence session. I can't remember which one it was, but it was about data gathering, and we have world-class data, and it goes back to the point that Brian was making, but that link between what that data is and how it is used isn't as strong as it could be in the Scottish Government. Is that something that you could look at? I'm happy to look at that, but I think we are in a strong position with the data that we've got at our disposal. If I look at some of the data that we have through our health records internationally, I have so many people commenting to me about the advantages that Scottish data holds and how it can be used. The sequencing information that is able to be applied is quite remarkable to provide us with the intelligence about how we can position various early intervention measures. It's obviously a point that's been reflected on by the Standing Committee on Pandemic Preparedness, led by Professor Morris. We will continue to look at those questions to make sure that we're using data as effective as we can. Thank you very much. That concludes our consideration of this agenda item, and our time with the Deputy First Minister. I'd like to thank the Deputy First Minister and his supporting officials for their attendance this morning. The committee's next meeting will be on 26 January, when we will be considering a draft report on the labour market inquiry, and I now suspend and move this meeting into private. Thank you.