 Good morning, and welcome to the 17th meeting of the Economy, Jobs and Fair Work Committee. I have apologies from committee member Jackie Baillie, and let me welcome today Keith Brown, Cabinet Secretary for Economy, Jobs and Fair Work, and with him are also Chris Stark, director of energy and climate change, Mary McCallan, director for economic development and Hugh McAllun, who is the head of youth employment. Welcome to our guest today. The first item on our agenda is a decision by the committee to take item 4 in private. Are we all agreed on that? Yes. Thank you very much. We will start our evidence session by giving the cabinet secretary an opportunity to make a brief, that is five minute statement before we then move into questions. Thank you, convener. Delighted to be with you this morning, and I welcome the chance to give evidence of how, in particular, my portfolio of spending helps to meet the Government's manifesto commitments. Our aim is to drive progress towards economic and productivity growth and also to create a more competitive and inclusive economy. As Derek Mackay made clear in the budget last week, this has been done in challenging economic and political circumstances and at a time of global economic uncertainty. Between 2010, 2011 and 2019-20, Tory austerity will see our fiscal departmental expenditure limit budget, which funds discretionary spending and capital investment fall by more than 9 per cent, or £2.9 billion in real terms, with a share of a further £3.5 billion of cuts by 2019-20 still to come. However, this Government places the utmost importance on the issues that my portfolio seeks to address. Despite the challenges that I have mentioned, my portfolio budget has risen overall in 2017-18, rising to £384.5 million, which is up 4.3 per cent on 2016-17. The emphasis for us remains on the four strategic priorities identified in Scotland's economic strategy. That is internationalisation, innovation, investment and inclusive growth. To grow Scotland's economy and to ensure that it remains resilient. Key actions that will take to those ends include supporting Scotland's manufacturing base through continued delivery of the manufacturing action plan and will continue our work to develop the business case for a new manufacturing centre of excellence. We have attained funding support for the delivery of the forthcoming innovation action plan, boosting innovation to improve productivity. We will also further deliver the Glasgow region, Invernessshire and Highland and Aberdeen City and Shire city deals. We are also ensuring a continued emphasis on fostering the entrepreneurial culture that encourages everyone to reach their full potential. That includes activities that are specifically focused on encouraging greater entrepreneurial activity among women. Following the result of the referendum, it is vital that we continue to demonstrate that Scotland continues to be a very attractive location for business growth and inward investment. We are committed to further funding to establish and embed innovation and investment hubs in London, Brussels, Dublin and now also in Berlin. We will also ensure that the distinct needs and priorities of Scotland's businesses and investors are reflected in wider training activity by doubling the number of people working for SDI in Europe. All of that integrates with our trade and investment strategy, which was published earlier this year. The First Minister has announced the appointment of Nora Senior as one of the first members of our Board of Trade and will announce the further appointment shortly. This year's budget is the first of a multi-year £500 million investment towards the delivery of our commitment in the programme for government to Scotland's energy efficiency programme. The portfolio's contribution is over £27 million for non-domestic energy efficiency and low-carbon heating, a £3 million increase on 2016-17, helping to fund commercial and industrial projects, including pilot projects, destructing and energy efficiency loans. The Government has also consistently recognised the sizable competitive advantages that we have in renewable energy and low-carbon sectors. In 2017-18, we were raising the level of support for low-carbon demonstrator projects and activity designed to bring an increased number of projects to investor readiness. We will also continue our work in existing areas, including in relation to fair work. We approached the task of creating more inclusive growth and fair employment by the increased resources being allocated towards that, which is demonstrated by a doubling in funding. Of course, other activities such as PACE have to be funded when that is being called into action, as we have seen recently in relation to a number of redundancy situations. Beyond that, I am delighted that we are funding the delivery of devolved employment support services in Scotland from 1 April through our transitional employment service for some of the most vulnerable people in society. That is ahead of delivering full employment services in April 2018. We will also meet our commitment to develop a new programme to specifically support young people who have been in care into appropriate work, training or educational opportunities. Finally, I am pleased that my portfolio will contribute to the establishment of a flexible workforce development fund, part of a uniquely Scottish response to the introduction of the UK Government's apprenticeship levy. The budget is once again, I believe, a robust plan to deliver it on the priorities that the Government has developed in its economic strategy. I am happy to answer any of your questions. Thank you very much, cabinet secretary. I will start with a question from Dean Lockhart. Thank you, convener, and good morning, cabinet secretary. Thank you for coming along this morning. Under the draft budget, based on the spice briefing papers that we have, the total budget for Scottish Enterprise will be reduced by 33 per cent or by 28 per cent, depending on how you look at the number. Overall, the reduction in spending for Scottish Enterprise is approximately £85 million, based on the spice briefing. In the notes to the level four figure set out in the budget, you explained that funding for Scottish Enterprise through the draft budget has changed to better reflect the level of planned activities relative to funding and income streams, and the reduction will be negated by Scottish Enterprise's reclamation of funding from the European Commission for Expenditure, associated with delivery of the SME holding fund. Can you explain to the committee what amounts you expect Scottish Enterprise to reclaim through European funding? Will that amount be reclaimed? Will it make up for the shortfall in direct funding from the Scottish Government? There are a number of different elements to that, if I can say first of all, and you have more or less the right figure, £84.61 million, the figure that I would offer. In recent years, the last three years, we have asked Scottish Enterprise to make savings of around £17.3 million through the strategic forum. You will see that in the previous budgets. We have not asked for that. We have taken that, but we have not asked for that. We have made those savings in each of those three years, so that is now embedded. We have also affected a £20 million cut in the capital that has been allocated. We have also cut the amount that we are providing in terms of depreciation. We have cut that by £10 million, and also in relation to the financial transactions and monies. Within that, the actual grant in aid cut to Scottish Enterprise is about 7.5 per cent, around £11 million. There are, as you mentioned, quite rightly other sources of capital that would replace much of that. For example, the £40 million small and medium enterprises holding fund should be possible for Scottish Enterprise to access up to £28 million of that, which in turn could leverage around £250 million. We would also suggest that the other measures that we are taking are also supportive of enterprise, although not directly Scottish Enterprise. I have mentioned in terms of city deals. We have previously provided £30 million to Glasgow. We have nearly the same amount again, slightly less than that for the two additional city deals that have been provided for this year. We have also provided for task forces. We have also increased the money available for innovation funding by about £2 million. Of course, we made provision for the manufacturing centre of excellence £1.65 million for the business plan in the first place. I think that the figure on European funding was about £117 million, but my colleagues can correct that. The basic point that has been made is that it is quite a complicated picture of money moving around, and a straightforward cut is not how we represent it, given the other aspects. However, perhaps my colleagues could merely ignore that. If I could just on the £117 million, I just wanted to clarify that that is actually about, SE is in a position where it has access, obviously, to grant and aid from the Government, but it also has access to a substantial amount of income that it has generated from its own activities, of which, this year, an approximate figure is £117.7 million. That is another factor that has been taken into account in this budget. If we look at the totality of all those moving parts, will the budget for Scottish Enterprise increase year on year compared to last year, if you fight to account the sources other than from the Scottish Government? I do not think that we can say that at this stage. I mentioned, for example, the £28 million. That is a potential figure, and it depends on how much is drawn down in relation to that. You would see an increase only if you take into account those other things, which are not going through Scottish Enterprise's budget. In relation to city deals, which I have mentioned, and innovation, that increases the amount, but I think that you will still see a cut in relation to direct grant and aid to Scottish Enterprise. Thank you. Do you have a concern, cabinet secretary, that, given the need to stimulate the economy and some of the concerns that are expressed over Brexit, we should be significantly increasing the budget for Scottish Enterprise? For every £1 invested, Scottish Enterprise tells us that they get £9 generated for the benefit of the economy. Is this not a time to be increasing significantly the budgets for Scottish Enterprise? I must add. I am not responsible for the HIE budget, but in relation to Scottish Enterprise, I would say that, first of all, the budget that we have is around a 5.8 per cent cut this year. It is about an £800,000 cash increase but a real-terms cut of around 5.8 per cent, so we have to live with our means in relation to that. I am confident that I agree with your fundamental point that, in a time when we are facing the pressures of Brexit, we see report after report telling us about projected fall-off in investment, employment, confidence and so on, that we should be stimulating the economy. I am confident that the other measures that I have mentioned are not part of Scottish Enterprise's budget. If we want to fund the city deals—I know that you are very interested in the Stirling and Clot-Manshawn in particular—if we want to fund the city deals, we have to find money for those things. That is essentially a further devolution, a resource transfer to local authorities. We should fund innovation as well. It is not part of the Scottish Enterprise's budget, but we are increasing the amount that we spend in relation to that. The manufacturing centre of excellence is additional money as well. The reduction in business rates is also additional. Although I appreciate that it can be confusing the relationship between SDI and SDI in terms of the finances, there is an increase of around £2.1 million for SDI to fund the additional staff. I agree with your basic point that, at this time, you want to be investing further in enterprise. Even if it is not Scottish Enterprise per se, I believe that we are doing that. Thank you. Final question, convener, if I may. It is on a related issue, the Scottish growth scheme. In one of your answers, it might have been a written question, you said that you anticipate that support will mainly be in the form of guarantees, but, if appropriate, loans may be offered as well. Do you have an expectation or an approximation of the £500 million scheme? How much will that be in the form of cash and how much will it be in the form of guarantees? That depends on the demand that is there. There is work being done, diligence work being done on that, just now both within and those without government, outwith government rather, are looking into this just now. However, it will be demand led. It was primarily set up in order to provide guarantees, which was the gap that we had seen as developing in the market. In fact, it is the same argument that you used to the UK Government in relation to the oil industry, where there has been a demand for guarantees for infrastructure development, but we want to remain open to the idea that people may prefer to have loans themselves. We will not know until that demand. We might have better ideas as the work is done, and I am happy to keep you updated as to how that is shaping up, but just now it looks like it will be demand led and we expect the bulk of it to be in terms of guarantees. Am I waiting to think that the budget does not have a provision set aside, because these are contingent liabilities and therefore they will not appear on the budget until a loss event occurs? Exactly right, contingent liability, so it would not show on these kind of budgets. There are 28 national performance indicators that are relevant to this committee, 10 where performance has improved, 11 where performance has been maintained and 7 where performance has worsened. Focusing on the seven where the position has got worse includes GDP growth, exports, research and development spend. What changes would the Scottish Government like to see in enterprise agencies operating plans and budget priorities to help address those indicators where performance has not improved? If I can take the enterprise and skills review, which we have obviously announced, that is focusing on things like alignment in particular. The different agencies that come with the remit of that review, Scottish Enterprise, Hans and Hans Enterprise, SDI and Scottish Funding Council, we want to see further alignment. If you like hard alignment, whereas up until now it has been alignment by encouragement more. To achieve that, we have taken the initial step of establishing or announcing that we intend to establish a strategic board. We also want to see increased accountability resulting from that, so people being held to account on the measures that you have described for performance in relation to that. GDP, we have had growth, we have a resilient economy but it has not touched the levels that we want to see. The same is true in terms of productivity, so that is another area. We have seen an increase of around 4.4 per cent in our productivity since 2007. Just by contrast, we have seen the UK flatline in that period, despite which the UK still has higher productivity rates than we do here in Scotland. Most of our competitors in the EU have higher productivity rates than we do, so we want to see productivity increase. One of the means by which we can achieve this is to increase the internationalisation. The additional funds that I mentioned in relation to the budget for SDI will be about promoting trade from Scotland initially in relation to SDI with the increase across the EU, which we think is particularly important at a time of Brexit. Obviously, we will keep an eye on the rest of the world in India and China. It is really about concentrating on those four eyes. We have to acknowledge that we have gone through in the last 10 years a very substantial, long-lasting and deep recession. We now have the uncertainties of Brexit, so those represent challenges that we are determined to overcome by focusing on those areas. Some of the evidence that we have received from Scotland's 2020 climate group, for instance, when they were focusing on the enterprise agencies, they said that there is a need to declutter and simplify the system. Do you think that by introducing a board of trade that is actually going to help to declutter the system or make it worse? Obviously, we will be doing it in this way. I thought that it would help, and we think that it will help, and it will have a business, a substantial business element to it as well. It will also seek to tap into those sectors, which are very important for the Scottish economy, to make sure that we are as focused as we can be. I think that it is right to try and declutter, and we have something of a clutter landscape. One of the workstreams that phase 2 of the enterprise and skills review will be precisely that, to see what we do not have to continue doing, as well as the sharper focus on things like trade, which the board of trade is seeking to bring. It is right that you review that in any circumstances, but it is especially important that you do that in relation to Brexit to make sure that you are as focused as possible. You have that alignment between the different agencies and actors within Scotland to make sure that, for example, when you are going overseas to represent yourself in markets, you do it in as focused a way as possible. By focused, the different agencies involved are working together, but you do it in such a way as to get the maximum benefit. The board of trade idea is a good one, and it will bring a lot of expertise including very specific business expertise to what we are trying to do internationally. If I might just follow up with a question on that, I think that in the budget level 4 figures an increase has shown for the business liaison and networking budget line. I think that that is related to the trade centres with regard to the hubs in Berlin and so forth. My question is really this. Will there be a comparable budget increase for strengthening trade ties with international partners outside of the EU? Is there an identifiable element within the draft budget showing an increase in that area of expenditure? Not at that level 4 that we have mentioned, unless Mary wants to correct me now, but not at that level. We have the existing baseline activity that we are involved in. We will look to have one-off opportunities. For example, we are currently in discussions with the UK Government about representation at a major oil event in Kazakhstan, but those things will come up and they will require additional resources. If you want to be part of them, as you were at the Addisab conference in Abu Dhabi recently, so no, not at this level. There is not a separate income stream or budget stream that is going to identify countries out with the EU. The point is right that the additional resources—the £2 million plus—is specifically identified for what we have previously announced in terms of the hubs and the additional SDI staff in the EU. Do you agree that we need to focus on other countries out with the EU in terms of developing trade? Absolutely. That is true. We have had recent examples. I spoke to around 100 CEOs from India. We have visits by ministers from two different countries—China, including and so on—where we will seek to do that. You are right to say that we cannot, obviously, Scottish Government is not able to strike a trade deal in any event, but it is a great deal of trade promotion that we can do underneath that. In addition to that, what I have said to the Secretary of State for Trade, Liam Fox, is that we are willing to work and are keen to work with the UK Government. The UK Government has got a substantial resource around the world out with the EU in terms of embassies and trade missions. We have said to Liam Fox that we want to take advantage of that. After all, Scottish taxpayers pay into those resources as much as anybody else, so there is a network layer. In addition to that, I should have said that we have announced an additional £400,000 to the chambers of commerce, precisely for that kind of activity, although it relates to the EU and the wider world. For example, the chambers of commerce network is a global one, and if events are being held in countries out with the EU, we can tap into that and try to synchronise activities with the chambers of commerce. The funding is not dependent on a certain percentage of it being spent by the chambers of commerce in non-EU countries? No, there is a global network, so it is not specific to one subset like the EU. You would accept that funding or expenditure needs to be directed in that? If I did not, we would not be considering a substantial investment in, for example, Kazakhstan. We have to be focused on where we want to see this activity. The US is a very substantial investor. Germany is a very substantial investor in Scotland and potential for much more, but India, China and the BRIC countries are very important. You have to pick and choose where you can go, and we are not restricting ourselves to the EU. Andy Wightman Thank you, convener. This year's budget is a one-year budget. It makes it a little bit difficult and I know that times are uncertain to look any further forward, but what is your view of the budgets on enterprise beyond one year? It will depend on our success in bringing in the income tax powers that we now have, but it will also depend on UK Government support, as it does currently. It is predicated on that. I think that it is unlikely that we are going to want to see, certainly in my portfolio, a reduction in the emphasis that we have in terms of enterprise. So whether through the agency, Scottish Enterprise, Enhance and Islands Enterprise or the other enterprise or business activity that we are undertaking, I think that it is unlikely that we are going to want to downgrade it. However, it will depend on the resources that are available to us. Is there an intention to publish budgets that look forward more than one year? That would be Mr Mackay that would be doing that, not myself. So you do not know? No. No, it is just that I think that you moved your head, but it does not get into the record. We all have a tendency to do that sort of thing sometimes. No, it is up to Mr Mackay that it is not a decision that I would take. Thank you. Sorry, Andy Wightman. That is fine. Okay. Thank you very much. It just makes it a little bit difficult to make an assessment of the increases and decreases in budgets if one is not looking further forward than one year. I wonder if I might just revisit the question around the enterprise and skills review. You mentioned in your evidence on 29 November that Scottish Enterprise and Enhance Enterprise will remain in law as entities, but they presumably will remain in law somewhat differently than they exist just now. Would, for example, Highlands and Islands Enterprise be able to sue Scottish Enterprise if it wished to? I know that it is an unlikely scenario, but if it were to come up that there was some dispute about a piece of land on Aran or, for example, where there have been both agencies that have had liabilities? I am keen to see two agencies of government involved in legal action against each other, but, to the extent that they are able to do that just now, that would not change, because they would remain, as I have said, in law. They will both have their own chief executive, so they will both be agencies that are enshrined in law, so I am not sure whether they have sued each other previously. It may well be that there are legal proceedings that take place to resolve issues between them, but there is no change to their status, which is proposed, that would have that effect of making it either more or less likely that they would be involved in legal action. The strategic board would not make a difference in your view? The main purpose of the strategic board is that they align their activities. I would hope that that would include discouraging legal action between them as well, but the purpose is not to limit their powers in that way. The main thing is the alignment that we want to see taking place. In relation to the two bodies that you have mentioned, I would like to see more collaboration between Scottish Enterprise and Hans and Allen's when it is in their interest to do so and when it is a greater interest. For example, we have just announced the major investment in the smelter at Fort William. Both Scottish Enterprise expertise and Hans and Allen's expertise were used in relation to that, and I want to see much more of that happening. On the increase in number of staff for SDI in Europe, how much thought has been given to the extent to which their effectiveness can be enhanced by collaboration with existing UK efforts, trade delegations and embassies? Are those designed to be quite stand-alone? As I said in my previous response, it has been my view that we have to make use of all the resources that are available to us. I do not think that embassies and other facilities operated by the UK Government have been sufficiently open to the Scottish Government to use in the past, and I am very keen that they should be. As I have mentioned, the Scottish taxpayers pay for these as much as anybody else. We saw a recent tweet from the UK Foreign Office describing the new Queensferry crossing, while showing the old railway crossing. We need to be better connected to those, and I, as I have said directly to the Secretary of State for Trade, I want to see that collaboration. The event that I mentioned in relation to Kazakhstan would be an expression of that joint working. I want to see more of it, and the additional staff that you mentioned in relation to SDI. Of course, they are responsible to this Government and this Parliament—both the Government and the Parliament—and their focus is on Scotland's interests, but those interests are served, I believe, by working jointly with others, including the UK Government. You will find that, certainly in relation to the existing SDI staff, there is quite a substantial awareness of what the activity of SDI—and it is not DTI, it is DIT now already, but we want to see that increase. Just before we move on to another aspect, I just want to ask that Scottish Enterprise has said that it has helped to create 55,000 jobs over the past four years, and that for every pound they invest, they get—or nine pound comes back. First of all, do you agree with that? Second, if that is correct, is it not the case that direct funding should be increased, rather than matters dealt with, as you have outlined? Convener, I have come back to the two points that I have made already. If you have a 5.8 per cent cut, you have to make the resources fit to what is available. However, I think that it is possible to increase the impact of what we are doing by the other measures that I have mentioned. For example, city deals are important, but they require resources. We have also made, not in my budget, to be Derek Mackay in relation to business rates. We have made changes there as well. We also, of course, have to respond to some of the innovation challenges, so there is additional money for that. You tend to back what you think will have the biggest impact, and that is what you believe will have the biggest impact. However, to answer your other point, SCE has been extremely successful in what they do, and we want to build on that success, but we can do it in a number of different ways. The budget shows that you are focusing on putting funding support where there is potential for growth, largely, and opportunity. The largest increase in self-employment and business creation is among women, yet Women's Enterprise Scotland has said that self-employed women are currently not well-served by the enterprise support. Should more targeted support be available to women setting up in business, and should unleashing the potential of women-led businesses be a priority of the strategic board? I think that, on that latter point, it certainly should be. I was involved recently in an event at the Women's Enterprise Scotland at Glyn Coarse Barracks, or Glyn Coarse, fortunately, the Government has announced that they are about to close Glyn Coarse Barracks, which they have just spent £60 million on improving. However, those were the spouses, and in every case it was in this particular example of women that were involved in it. It was quite clear by the work that was done by Women's Enterprise Scotland that this had not just provided a new opportunity for the women concerned, it changed things just like their confidence and their ability to engage with the business community. It was hugely beneficial for a number of reasons, and I think that that is hugely important. We know that women are further away from the market, if you like, in relation to women's enterprise. Given the fact that we have an overarching economic strategy of inclusive economic growth, if you do not have the proper, the fullest extent of inclusion of the majority of the population who happen to be women, you are not going to be achieving your maximum growth in any event, so it is hard to see how the strategic board could be other than very seized of the idea that we have to improve and direct support to what we do in relation to women, and that includes women in enterprise. You mentioned the work that Women's Enterprise Scotland did at the barracks with the army spouses. They took a completely different approach to hot housing, talent and creating businesses. Do you say that there is a role for Scottish Enterprise and the board in looking at what Wes did and adopting some of their practices to improve on the criticisms that Wes has made about the support that has been existing already? One of the points of the education and skills review is that not just Scottish Enterprise, but the different agencies should be learning from each other and from others. That is the real purpose of the alignment of this kind of team Scotland approach. Where you have either best practice or, in this case, new ground being broken, it is extremely important that we have the ability to learn the lessons from that. I am sure that the strategic board—perhaps it will be easier for that strategic board to do that—will have four, possibly even five, boards having to communicate with each other. The strategic board could take that forward. It is also worth saying that we are doubling the budget for entrepreneurial activity among women. That money comes in the innovation and enterprise budgets, or at least that. There is new money there, and that can be used towards supporting women. As I said at first hand, the difference that it made to women's lives—whether they went on to establish businesses—is the difference in confidence and life experience. Sometimes you will appreciate that there can be a degree of isolation and alienation if you are a military spouse. It had huge other benefits as well as those, but it also meant a real change. One woman in particular did a thing called Treats for Troops, which was packages that were sent to active personnel in Afghanistan. I asked her what was the most popular element, and she said it without a doubt that it was Ivan Brew. Barres had not been able to provide it with support, so I managed to get in touch. The bars have been brilliant and come back with substantial support. It is an affirming thing in itself that she was able to take advantage of this women enterprise course, but to get something as productive, useful and rewarding is what she has done. That is what an inclusive society is about. Andy Wightman wanted to come in with a short follow-up. You have mentioned the figure of 5.8 per cent cut twice. Can you clarify what that figure relates to precisely? One of the experts is better than me, but that is what we perceive to be the overall budget real terms budget decrease. I think that there is an £800,000 cash increase on our overall budget, and that is real terms, which is the only realistic measure. I have heard that, both in the past Parliament and in this Parliament, people are talking about cash increases, but in every other context, they are talking about real terms. It only makes sense when you factor in inflation even as it is low, so that decrease is in relation to the overall discretionary spending that the Scottish Government has. In the spice briefing, in terms of the allocation of total managed expenditure, that is up in real terms by 1 per cent. Dell resource is up by 0.7 per cent. Dell capital is up in real terms by 8.7 per cent. AME is down by 1.3 per cent. I have my own figures here that show a 1.8 per cent real-term cumulative change, a 9.2 per cent. That relates to the longer periods since 2010, production of 9.2 per cent. I am happy to provide you with the figures in writing that I have, and you can set them aside what spice they have provided. That would be very helpful, cabinet secretary, because one of the challenges is in interpreting figures. Your figure of 5.8 per cent reflected in the draft budget itself in our table, in the overall draft budget in this document. Does the figure of 5.8 per cent appear? I am sure that that is where I have drawn those figures from, so it should be in there. I think that I would imagine that it is explicitly expressed, but if not deducible by the other figures. I will certainly produce you the figures that I have, which underlie that 5.8 per cent. That would be helpful, thank you. Richard Leonard Another set of figures that we have from spice, and I think that Dean Lockhart referred to those at the beginning, are Scottish Enterprise resource down in one year by 17.2 per cent, Scottish Enterprise capital down 47.7 per cent, Scottish Enterprise non-cash down 58 per cent, Scottish Enterprise financial transaction down 100 per cent, SE total down 33.2 per cent. I understand that you are saying that there are other income streams that Scottish Enterprise can draw upon. There may be some for the time being, European Union funding that they can draw upon, but those are the figures for the allocation that you have given to Scottish Enterprise, aren't they? Yes, but if you take two of those last figures that you mentioned, one was financial transactions, one relates to depreciation. This is what is required, this is what Scottish Enterprise need in relation to those figures. The need has changed since last year, so that is reflecting of the need. It is also true to say that the first figure that you mentioned is 17.2 million, I think. That savings has been there each year, but what it was done is that it was given to them and then taken back at the end of the year, it has just not been given this year, so it is the same as it was in previous years. However, I do not think that you can rush by the fact that, in addition to those things, if you are going to fund city deals to the extent that we are, if you are going to fund and increase money for innovation, increase money for SDI staff, the money has to come from somewhere, you cannot spend the same money twice. As I have said, in relation to the £20 million cut in capital that you have also mentioned, there is the opportunity to more than to recoup that from other sources. That is to me a balanced approach, but it is one that is necessitated by the budget settlement that we have, and we have to live within our means. Well, I accept that you have to live within your means, but it is pretty clear, is not it, that you have moved money away from Scottish Enterprise, whether it is too city deal or whether it is too other activities that you are proposing to embark on, whether it is SDI or so, but you have moved money out and you are proposing to move money out of Scottish Enterprise? I have accepted that. I think that the most relevant figure would be, in relation to what you are asking, a 7.5 per cent cut of about £11 million in terms of the grant in aid that money made available to Scottish Enterprise. However, it is my view that it is more than made up for by the other things that we are doing, which also help Enterprise in Scotland. It is not all being done through Scottish Enterprise, but it is being done by other means as well. That benefit does not just apply to Scottish Enterprise's area, it is across the country, and it is for Scottish Enterprise PLC. In terms of what Derek Mackay has been able to do in relation to business rates, in terms of the demands that we have for task forces, the two remaining ones are Fife and West Lothian, which are providing direct assistance. In terms of the increased moneys for innovation and enterprise, those are things that would be very related to what Scottish Enterprise does, but the money is not going directly through Scottish Enterprise coffers. I think that that is doing the right thing. It also increases the number of staff available for enterprise more generally if you look at Scottish Development International. I think that that is the right way to approach it. The new staff, for example, in relation to SDI, will be doing things that will be more staff, more to do for SDI, and that represents an increase in resource and an increase in the number of people working on those areas. I think that that is a good thing in the right way to do it. In addition to that, if you remember back to the start of the summer, you have got to think of the baseline from which we are working here. At the start of the summer, we had the additional £100 million in capital investment announced to try and help with the effects of Brexit as well. I think that there is no question that we have a very strong commitment to enterprise in Scotland, but that is not all reducible or reduced to what happens through Scottish Enterprise. I suppose to continue the line of thinking. I wonder at a wider level, cabinet secretary, where we are in the balance between use the word balance yourself, encouraging inward investment on the one hand, but growing our Scottish companies. That has come up from a number of witnesses that, on the one hand, would like to grow Scottish companies and they could export more, but on the other hand, we are all pleased that, yesterday, there is an investment in Tiller-Habour. How do we get the balance between these two areas? I would probably say that you could not point to any one textbook that would tell you exactly what the right balance is. In relation to the phrase growing Scottish businesses, and that is one of the real challenges that we have. We have got a huge number, a higher number than ever before, in relation to companies in Scotland, but it is the extent to which we can, in the current jargon, scale them up. We have got some fantastically innovative companies as well, but we even know those that are spun out from university collaborations, but we have not had the same success in scaling them up. The growth fund, which I mentioned earlier, is specifically designed to scale them up. A number of other activities that I mentioned before were internationalisation. We also do not export or get involved in international activity to the extent that we have. Wherever the correct balance lies, I think that it will include much more internationalisation and much more scaling up. The demographic of Scottish companies will go from 95 to 96 per cent of small and medium enterprises in a very smaller number of large companies. If we can grow the middle of that, where companies that are currently successful scale up—you have got the two unicorns, like Skyscanner and Fangio—you want to see more of those companies coming along. You are right that that is a challenge. Exactly what the right balance is, I do not know, but I do know that we have to do more in terms of internationalisation and scaling up those companies that can grow larger, whether they are not—and not all companies want to do that, but whether that is within Scotland, the UK market or the international market. I know that we can only look at one year at a time, but longer term, if we were successful in building up some of those companies, locally-based ones who have our owns them, would that mean that there was less need for inward investment? I do not think so. I think that we will always continue with our activity to encourage foreign direct investment, not least because, as we saw yesterday, it is hard to overstate how important that announcement is in terms of a rural economy, like Fort William, the guaranteeing of the jobs that are currently there and potentially hugely increased employment in that area. In a rural area, for that level of an increase in jobs, it is obviously much greater than it was elsewhere. Inward investment is absolutely vital, but it is not just because of the money that comes in or the jobs that are created, it is because it very often brings with it new knowledge as to how to best internationalise. It can be the case that sometimes it comes from countries, for example, Germany, which is more productive, more competitive than we are, and we can learn important lessons from that. I think that that is always going to be important in an open economy. Cabinet Secretary, you mentioned business rates. I think that you will be aware of the Scottish Retail Consortium report. It has some positive things to say about the Government's approach in some areas, but in terms of the large business rate supplement, you may be aware of what they have said in a paper that they have issued. They say that the Scottish ministers have ffumbled the opportunity to comprehensively reverse this year's doubling of the large business rate supplement, and they say that the doubling is emblematic of many problems with rates as a whole. They say that little regard paid to trading conditions, changes affecting the industry, they say that no consultation or economic impact analysis was done underpinning it, and they say that it is at odds with the Scottish Government's town centre's action plan. I am wondering whether you can respond to that in relation to what is said there by the SRC. I have spoken directly to the SRC, I met with them two or three weeks ago, and that was one of the issues that they raised. It also said a number of other things, which were quite positive. The SRC, to the extent that it has in its memberships and very large companies, such as Datesco, Marks and Sparks and various others, will be very concerned about that particular measure. However, it was quite clear to me from that discussion that there is a lot more that concerns them than just that. What I did agree with them was that we would have a continuing dialogue, so that, as you mentioned in your opening remarks, things did not take them by surprise, that it was possible to establish a rapport, which means that we have an agreed. I have to say that it related both to the UK Government and the Scottish Government. I had a meeting in here with the Scottish Grocer's Federation—in fact, I think that it is a convenience store—and Gordon MacDonald convenes that committee. They made exactly the same point. They felt that, if we made a change, if it came on top of just before or just after a UK Government change, then the whole was not taken into account. I have agreed to meet further with them. In fact, I offered a very large plus-party group in relation to the convenience stores that I would be happy to appear before them with the UK ministers, so that we could explain ourselves separately. I understand that they obviously have that concern. I would say that what we are doing in relation to the small business bonus, including its further extension in these areas, for Derek Mackay and his budget, has had a huge benefit. We have to take the thing in the round. I know companies in my constituency who would either have not taken somebody on, would have let somebody go or may have gone out of business altogether, had they had to pay the business rates burden that they have, which has been taken away and supported by your own party. We have to take it in the round. We are trying to help those who need it most and we will continue the dialogue with the Scottish retail consortium. Do you accept what they say that one in 10 firms in Scotland pays a higher rates bill than elsewhere in the UK as a result of that? It is also true that many businesses in Scotland pay a lower rate if they get the small business bonus scheme, so that is the point that I was making, that you have to take those things in the round. The greatest support is going to smaller businesses and those in need of it most. Just following that up, I was surprised earlier in the session when I asked a parliamentary question about whether any economic impact assessment has been done on the small business bonus scheme, when I was told that there hadn't been. It's been in place for almost a decade and yet there's academic evidence that suggests that when you relieve non-domestic property of rates, very often, if their own capital value rises or if their lease, the rent goes up. Given that you've just cut the general rate poundage by 3.6 pens, what economic analysis has been done to inform whether or not that cut will deliver greater levels of economic growth or not, and what economic analysis has been done to suggest that the extension of the small business bonus scheme shall do the same? On the small business bonus scheme, I think that it's more properly for me. I'm happy to go away and look at that and see what would be the benefits of doing that. All I can say, and I know that it's not a full economic analysis, but it is my experience over the 10 years I've been in the Parliament that it's been extremely well received, it's been the cause of a number of businesses staying in business and it's been the cause of increased local employment. My own experience has been that it's been very beneficial, but I'm happy to look into that. In relation to the other rates, it would be Derek Mackay, it would be tough to answer to that, but in relation to the small business bonus scheme, I'm willing to undertake to look at that and come back to Andy Wightman in due course as to whether there's been sufficient emphasis or whether it's time for us to have a fresh look at what the benefits of it are, although, as I say, convening my direct experience has been that it's been very, very beneficial for small businesses. Yes, I think that when one speaks to someone who's had a tax cut, they generally appreciate it, but the job of government is to try and look at that in the round and see whether, in fact, what appears to be a benefit is not in the medium or long term actually negated by higher costs, but I am grateful for your response on that. Okay, just come back to say, I'm not saying that I've talked to people who said that that's great, you've given me a tax cut. What I'm saying is that they've said, they've kept people on. I know that I could point to small businesses in my constituency that have said that they've either kept somebody on or they've kept going. I know that it seems a bit distant now, but, say, four or five years ago, in the teeth of that recession, it was crucially important. Also, because we kept people on employment or helped to keep people on employment, it increased or reduced the decrease in the level of demand in the economy. It's not just people saying that they're grateful for a tax cut, it's not quite as simple as that. It's an economic development, an economic generation activity, which I think has been beneficial, but I'm happy to look at that and come back to the member. I should do it. Sorry, sorry, sorry. One last thing, the review of business rates. We mentioned rates. It is then at McKinney's area, but you'll know that there is a review of business rates more generally, which has been undertaken by Ken Barclay, which I think reports in the coming months. Thank you. A brief supplementary from Dean Lockhart, and then we move, I think, to a different area with Ash Denham, so Dean Lockhart. Thank you. It is a brief one. Mr Brown, your point about the priority to scale up our SMEs, I completely agree with that. I think that a lot of commentators agree with that as well. However, the large business supplement in many ways we've been told by business acts has a barrier to scale up, because once a company gets to a certain size, they're punished by the large business supplement in terms of having to pay higher rates, and for many businesses it's a disincentive to expand. Would you acknowledge that analysis in terms of the LBS being a barrier to the expansion for some companies? To be honest, I'd like to see the evidence of that. I think that large business such as we tend to be much larger businesses. I think that when I was talking previously about scale-ups, I'm talking about small and medium-sized enterprises substantially scaling up from them, and sometimes scaling up would not, for example, require a huge new property or land to be taken. It had scale-ups in mind more generally, so that the level of activity, the level sometimes of job growth and the level of profit would also be increased. I'm not sure that it's a disincentive. I'm happy if you have evidence to dissent to me about that, to have a look at that. At the same time, if it was to be the case, and I don't accept it, I've certainly not seen the evidence of it, that the large business levy was a disincentive to scale-ups. I think that it would have to be taken in conjunction with the support that we're providing for scale-ups. I mentioned the Scottish growth scheme, so a number of measures that is going to have a predisposition to looking at towards both tech and scale-up companies, not exclusively. There are measures in support of companies seeking to scale-up, which should be countered against any other interventions such as the large business levy that I mentioned. Ash Denham I want to take the opportunity to raise with you the quality of Scottish export statistics. It's come up a number of times during our recent inquiry. ExportStats Scotland said that estimates only capture the first point of export. In my view, that could lead to two effects. One is that some Scottish exports could be being counted as UK exports, but also, as we see with the Rotterdam effect, exports to the UK might be artificially inflated as a result of that. My question is whether we are investing in our enterprise agencies to grow our exports, and we are also increasing spend on things such as SDIs to increase our exports. Don't we need to be able to accurately assess the impact that we are having with that spending and be able to accurately measure the increase in our exports? Is the Scottish Government seeking to try to get some improvements in this area? Yeah, maybe Mary McCallum wants to come in as well. Not only do you want to be able to measure and quantify any improvements that you make by any intervention that you make, I think that we really need to know what is happening now as well. I think that you are right to say that the quality of the information is not what it should be. I have said previously to the committee that I have asked Gary Gillespie, the chief economist and the chief statistician, to look at how we can improve, not just in relation to exports, but right across the piece, whether it is economic or labour market data that we have. It is quite a mixture just now of what we do. For example, we will get stuff provided by the ONS. We will get stuff that you will buy or supplement from the ONS will do a Scottish boost. In some areas, they are completely blank. There may be some areas where we want to have new economic data. In some countries, I have mentioned before, we have a measure called the whole of the economy, which we do not have in Scotland. I entirely agree with you that we should be looking to improve the quality of the data that we have. One of the workstreams that has been taken forward under phase 2 of the enterprise and skills review is just that, as I say underneath the work done by Gary Gillespie and the chief statistician to see how we can improve it. It may be that it could be that Mary McCallum wants to say more about that. The only thing that I would like to add is that we have put £360,000 in the extra budget to help with some of the work that the cabinet secretary refers to. The other thing that I wanted to raise was that we received a submission from FSB Scotland. You might have seen that already. They wanted to highlight the importance of getting the maximum economic impact from public spending. If we are about to embark on a large amount of capital investment, their point is that breaking down those contracts into smaller projects gives the opportunity for local businesses to benefit from those, and the money from that investment stays in the local economy. I agree with them that sometimes you have a sufficient scale of a project that is not possible to reduce it. For example, the Queensferry crossing is always going to be of the scale that it is. However, if you look at the other end of that spectrum, when I was Minister for Transport with a number of cycling and walking improvements around the country, national cycle and network improvements and so on, those were much smaller projects and, very importantly, often enabled local organisations to bid for those, without having to be part of a consortium or a larger organisation. That had a disproportionate effect on local economies. I think that there are some larger projects that will require us to have that scale, and there are important economies of scale that we want to achieve. For example, on the major projects that we have going just now, partly because when we undertook those in the economic cycle, we have got extremely keen prices for those. However, yes, there is a bigger picture, which is that if you can sustain local employment and encourage local businesses by having contracts on a manageable level, you can have proportionately a bigger economic impact, so I would agree with that point. Just to follow up on a couple of questions from earlier, given that under the budget, we know that certain businesses and personal taxes will be higher in Scotland, and that could have a negative impact on decisions about investment, about whether businesses and individuals move to Scotland and whether they stay here, I wonder what the Scottish Government is doing to offset any such impact on the economy, and what robust evidence do you have that those steps will negate any negative impact? I do think that when we talk about this, and it usually comes under the headline, the highest tax part of the UK, it has to be a real exercise in closing one eye when you say that, if you want to discount the other aspects of, for example, we mentioned personal taxation, and that will be important for people, there is no question of that, but they will also take into account, for example, if they are moving to Scotland the benefits of free tuition for children going to university and young adults going to university, they will also take into account even things at the cost of living and the prescription charges, they will also take into account, I would imagine, things like the small business bonus scheme, so I really do think that in terms of taxation, you have to take in the whole element, and people and businesses are able to take into account those things, you might not know every detail of every provision, but I think that they can take into account those things as well, so I think that when we make a judgment on this for shorthand, if it's about the attractiveness as a place to invest or move to or live in, then people will make a whole series of calculations. I accept the assertion in what you say, but what evidence do you have that people are making those choices? What empirical data can we point to to say when people make that decision, they actively do take in the prescription, the tuition? I do think that it's hard to say what the individual motivations of people are, but I think that there are some empirical facts that you can point to, which is that we're almost at a record number of people employed in Scotland, we've got a higher population than we've had for many, many years, we've got more businesses in Scotland than we've had for many years. During a time of substantial economic instability, and of course, down to anointing gas, we have a resilient economy that's still grown, not to the extent that I want it to accept at. I think that those things can be pointed to as things that endorse the fact that people want to live, work and invest and learn in Scotland. I think that those things are all there to be seen. I just wonder, though, to go back to Andy Wightman's point, whether that's something that the Scottish Government ought to be looking into so that we actually have a direct correlation between cause and effect that we can point to and say that there is an actual link between the free prescriptions or the tuition and people making those decisions. I have just one other question specifically on the Aberdeen western peripheral route. We noticed recently that the timescale for delivery of services on that slipped by six months. I'm just concerned to know how confident are you that that timescale will be hit, that we will be having services by winter 2017? What steps are you taking to make sure that there won't be any further slippage and are you comfortable that there will be no cost overrun on that? That's normally what I report to the rural economy committee on, but I'm happy to answer that. Just to go back, first of all, to your first question. The other indicator, of course, should be foreign direct investment, in which we've had some substantial success according to the Ernst and Young figures produced for 2014 and 2015. That seems to demonstrate that people are willing to invest in Scotland. On the AWPR, it's not the entire project that's now behind schedule. In fact, the way that contract was led, it was led with the spring 2018, when the timescale that the Scottish Government advertised that contract at. The contractor came back and said that they intended to do it earlier because it's in their financial interests to do it earlier, so they were going to do the Crabston junction in autumn of this year. They actually completed that part of it early in August this year. They were going to do the Balmerie tipper section, which was the subject of the report to the rural economy committee, but that was going to be done by the spring of next year. That will now be until later on next year. The overall project is still scheduled for winter 2017-18. And those things are all subjects. A very careful and major project, especially transport projects, is the largest project of its kind in the UK just now. Obviously, there are contractual or weather issues that can always arise. In terms of the cost of it, the cost because of that overrun that you mentioned will actually, in effect, it will reduce because we only pay for the roads when they become available. It won't be reduced, it will be almost postponed. We won't start paying for that until we actually have the use of the Balmerie tipper section. We are paying now for Crabston junction, which was earlier, so you could say that as an increase or an advance in terms of the cost. However, the overall project and the roads that are there are paid for by a unitary charge, so we don't start paying that until it's completed. Not having that Balmerie tipper section in by the date that the contractor committed to is not going to cost us anything additionally. Gil Paterson, do you want to ask a question about fuel poverty? Yes, I do. Over the last recorded period, just short of 100,000 people have been taken out of fuel poverty. However, if you look at the stats, 50 per cent of that number, although it's extremely welcome, I'm sure that we'll all agree about that, the 50 per cent of that is due to reduction in fuel costs. I wonder what influence the Government can have on fuel costs. Do you work with the industry itself, particularly with regards to people who are in fuel poverty, who may not have the means when prices are bound to rise again? It's a very good point, and the member is exactly right that just over half of the reduction in fuel poverty is attributed to the drop in the price of domestic fuels. Having said that, around a third can be attributed to improvements in the energy efficiency performance of the housing stock. There is also an element of higher household income, although it has not increased at a very high rate in recent years. Those things have all had an impact on fuel poverty. It is mainly done through my colleague Angela Constance, who holds the vast majority of the budget for this. It's about £114 million, where we are in the £20 million joint. Much of that liaison is conducted through Angela Constance, but perhaps Chris, we want to say a bit more about that. Just to say a little more on that programme and those stats to confirm we're absolutely correct, there's a number of things that we do that don't involve spending money, I suppose. Most recently, there was a summit of the energy companies where we spoke to them about this very issue. We encourage, for example, better switching rates among consumers. There's another range of things that we do that involve intervening in the energy market. We've helped to set up our power, which I know that you took evidence on last time, which is there to address some of those needs more directly. Asociated with that, sleeping in the same bed with fuel poverty as poverty itself and low incomes and low wages, is there anything that the Government is actively doing to try and sort this out of the source and that's because people are poor? You'll know as well as I do about the new powers that the Parliament has. Obviously, the efforts that we've made in order to reduce unemployment, that's one factor. We have now some responsibility for some in-work benefits as well. We do believe things like no charges for prescription charges, although many of the people in poverty would have qualified for that in any event. I understand that point. Those things are important, but specifically in relation to fuel poverty, we have introduced a warm homes bill that hopes to tackle fuel poverty and consultation on the policy content of that will start in the course of the next year. I think that it's an issue that every Government has wrestled with. I think that I'm right in saying that I would be happy to be corrected in terms of the levels of poverty that are less in Scotland than there are in the other countries of the UK. That's poverty generally rather than fuel poverty, but that's still allowing for the fact that there are far too many people in poverty. I suppose that it's across a whole range of different government activities, even to the extent of the notiation fees. It's just trying to increase the life chances of people to get out of poverty. Education will be one of the main means of doing that, so it is a multifaceted thing. Supplementary to Mr Paterson's question, fuel poverty rates are higher in rural areas. Can you tell me what's been done to address that in particular? I can say it first of all in general that 100,000 fewer households were in fuel poverty in 2015. Now, if it's the case, as you've suggested, that it's proportionately higher in rural areas, then that proportionate reduction should have disproportionately benefited rural areas. I get a bit, we ask Chris, if you want to say more about that. There are a few things that we do, for example, with the islands. We look more at the schemes that are tailored for that. There's a programme of work that involves various people, including Helen's Islands Enterprise, who have the broader role. There's nothing particularly in this budget that addresses that issue specifically. We tend to reflect the rurality of the area. For example, in the Northern Isles, we'll have district heating schemes. In the Western Isles, a huge amount of work goes on from the council to try to address that as well. We also have the proposal for an energy firm, which we'll seek to help to address that. Now I can go on to my main question. The existing Homes Alliance last week, when they were in front of us, they called on looking at our welfare powers and the most new social security system to address, in part, issues over fuel poverty. Can I ask what discussions there have been at Cabinet about tackling fuel poverty across the portfolios, given that it does impact on quite a few of the portfolios? There has been a general discussion on that point. I raised about the bill, which is to be produced, so we discussed things at Cabinet before. It enters a public domain, so there have been discussions led by my colleague Angela Constance. Cabinet Secretary, there was mention of a figure of 5.8 per cent, I think, earlier on. I just wanted to clarify that. If we look at page 4 of the draft Scottish budget, table 1.02, I think that there is a minus 5.8 per cent figure for the 27.18 budget, and the one for 2016-17 is minus 6.8, so I just wondered if you wanted to take the opportunity to clarify comments that you'd made about that figure. The figures that I have, convener, when we go on the figures that have been given, the real terms change on 2010-11 is 5.8 per cent. That does seem different. The figure that I was providing for was for this year, as I've been saying, for accumulatives since 2010-11. Apologies for that. We're on a trajectory of 9.2 per cent up to 2019-20. The 5.8 per cent is how far along we've got in relation. Is that right? Mr Brown is correct. The 5.8 per cent cumulus is for 17.18, for 16.17 it was 6.8 per cent. Thank you. I just wanted to give you an opportunity to clarify that against the figure that we see there in the draft budget. Richard Leonard and Andy Wightman had a further question. Cabinet Secretary, the existing Homes Alliance also told us last week that they believed a budget of around £190 million this year was needed to deliver a transformational step change, which clearly isn't in the budget. If not this year, when will we see a transformational step change in the budget that is spent on energy efficiency? I believe that it is a transformational figure. Of course, the figure that we've committed to is £0.5 billion, and the amount that we expend on that this year is proportionate to that £0.5 billion. That's what we have set out, and we believe that we will achieve that. If you look at the moneys that are being allocated this year, in relation to the SEAP programme, it is proportionate to that £0.5 billion. I know that that's what has been lobbied for. I realise that. They'd like to see more, we'd like to have more to spend, but what we have to do is make sure that we fulfil the commitment that we made, which was to £0.5 billion. I don't know if you want to say any more, Chris. The budget this year commits just over £140 million to energy efficiency measures, which is an uplift on the previous year. We might add to that some of the wider programmes, including crucially eco, which is the energy company obligation, which is a tariff on bills, where we work very cooperatively with the energy companies themselves. There is a very significant sum being spent each year, and there are wider policies, too, such as the winter fuel payment that are involved in that. Over the course that we committed in the programme for government to £0.5 billion of spending over the next four years, that allows us to develop a programme called the Scottish Energy Efficiency programme. As we begin to design that programme for roll-out in 2018, there are wider policy measures that we'll bring to bear, not just public spending but also for example the use of regulation to help some of the objectives here. The existing homes alliance is to use an expression of experts in the field, and they are saying that for a transformational change this year, a commitment of £190 million was required and you've committed £140 million. Can I go on, then, and ask about whether you make any estimate of the financial benefits to other budget areas of the Scottish Government of an increase in expenditure to tackle fuel poverty, especially the NHS, for example? Chris? Not directly. We have done work internal to the Scottish Government on what we call co-benefits, and they are very big. One of the reasons for investing in energy efficiency is for those reasons. There are health benefits, there are wider economic benefits in developing, for example, a local supply chain and those things. There are benefits to the consumer, of course, in spending less on energy. We haven't budgeted for them here, but that's one of the reasons why when there was a fiscal stimulus package in the current year, we spent on energy efficiency improvements because we could see those returns. It's a very good use of capital money for that reason. I think that it's also true to say that a lot of work has been done in relation to what's supposed to be called preventative spend previously, but it's also the case that you have to provide those moneys up front. The benefit comes subsequently as well, so we have to make provision for this money to achieve those things now. It is, of course, possible to measure the benefit in future years when the benefit has been experienced. Okay, but you wouldn't consider putting the apparatus of government behind some of that cross-referencing work with other departments in order, presumably, to identify where expenditure can best be targeted? I'm happy to take that with my colleague and come back to the member of the committee, if you like, convener. Thank you very much. Andy Wightman. It's just a brief couple of follow-ups to Richard. I mean, I think that what we're struck by in terms of the existing homes aligns evidence is their trucker, but I love an investment that's five times what's proposed over this Parliament, so no doubt we'll return to that. But picking up where Richard Leonard was leading with health, for example, the existing homes aligns tell us that if they estimate that all homes were to achieve a C rating by 2025, that would save the NHS £80 million a year by reducing the incidence of cold-related illnesses. I think that, in terms of scrutinising budgets, what would be useful in future—and I know that this is difficult when you've reflected that in your answer to Mr Leonard—is that the Scottish Government has an aim, I think, to increase investment in the NHS by £500 million in real terms by the end of the Parliament, but then, of course, if we can avoid having to do that, that would be very beneficial. So, when we hear evidence from yourself and from others about how spending can help to reduce demands on the NHS, it seems self-evident that, at some stage, we want to see whether those gains have been, in fact, captured and accounted for and, indeed, have they been budgeted for in the health budget going forward. I think that the increased demands on the health budget may well be reduced by the kind of investment that is being talked about, but they are much more broad than that—the nature of the increased demands. I think that I have responded to Richard Leonard to say that I am happy to look at that. There has been a substantial amount of work done previously by John Swinney in relation to print for entry of spend, so if you give me the opportunity to check in relation to this particular line, I am happy to come back to the committee and see if there is any further work that we can do in relation to that. That is helpful. I think that it is fair to say that it would not be just this committee. In the aftermath of the Christy report and preventative spending, we have heard a lot about that. I think that we and other committees will be wanting to scrutinise in much greater detail whether, in fact, that is being followed up. Liam Kerr A very quick supplement on those points about the £140 million that you said you were investing in energy efficiency. For clarity, that includes non-domestic energy efficiency, which, if I might suggest, would be important to the climate change aspect, but it is not going to address fuel poverty and it is not going to raise homes up to EPCC. Is that correct? That is correct. It is the total budget for energy efficiency that I am referring to, and fuel poverty is part of that. In broad terms, Ms Constance's budget covers the domestic side and Mr Brown's budget covers the non-domestic side, but, increasingly, what we have been doing with the energy budget, as we refer to it, is using that as a place to develop seep in the Scottish energy efficiency programme more broadly. That is a programme that will cover all types of building in the main, and it has, within it, fuel poverty objectives, as well as an overall reduction and an overall improvement in energy efficiency in the building stock. Are you able to say, and I appreciate, given what you have just said, that this might be difficult, that what was the £140 million this year, any idea of what it was last year? I have not got the figures in front of me, but it was a similar figure. That figure was, of course, increased by the capital stimulus programme during the year, so including that stimulus package, it is similar to what was spent last year. I am happy to get the exact figure and provide it to you, if you would mind. I would like to get a brief update on the budget plans and implementation plans for the Scottish Business Development Bank. I believe that that was announced earlier this year by Mr Swinney. I would like to get a brief understanding of the interaction between the Scottish Investment Bank, the Scottish Business Development Bank, the Scottish Growth Scheme and the new board of trade. Getting back to your point, Mr Brann, about the cluttered landscape, there seem to be quite a few players out there and agencies out there, so perhaps could you give us an update on the plans for the Scottish Business Development Bank, please? I might be asking Mary who has been involved in that word to say a bit more about that, but just on the interrelationship between, I think, two of the bodies that you mentioned caught there, the board of trade or the growth scheme and the board of trade. There is not an obvious direct correlation there, but, of course, the work is going to overlap. The board of trade will be looking at measures that we can take and the activities that we do undertake to try and increase trade, and that will help inform where we see demand coming from the Scottish Growth Scheme. On the growth scheme and the Business Bank, there is quite a lot of work going on. I think that this has reflected on all the parliamentary responses that I have had and a number of parliamentary questions, I think, from yourself, but also from Jackie Baillie on this. As we have the information, we have provided that information and the updates. I think that the latest information that I have given is pretty recent, but it may be that Mary has more she could add at this point. I am sure that you appreciate the segmentation of the market that is required to make sure that you are directing the right product to the right place. We covered earlier the salient aspects of the growth scheme, which is novel. Ministers have said that it is a particular response to a particular set of challenging circumstances. It is about directing funding and whether that be through guarantees or loans, as we previously discussed, to companies who find it very difficult to access pre-revenue. They are at a stage of development, which is not particularly attractive to standard lenders, so that is a good way to put it. However, companies that tend to be involved in that are particularly requiring that kind of support are also the companies, as the cabinet secretary said earlier, who have quite a lot of scope and potential. There is also quite a lot of risk around that, which is one of the reasons why standard lenders do not really feel that they want to necessarily get involved. The SME cohort in Scotland—there is evidence, and I cannot cite this at the moment, but I am sure that you are aware that there has been work done more or less since the crash in 289, where we can show that SMEs in general have been just less willing to really get involved in accessing bank finance of one sort or another. They have tended to find finance from various other sources—family, their own resources, etc. That is beginning to change a bit. There is quite a lot of work that is done regularly to look at what do the market segments look like and what kind of products can you best develop to encourage SMEs to come through and get access to the kind of tailored financing that they require for their particular business model. The Scottish Investment Bank has been involved in that market for some time. It has taken on some new products that it is pushing. They are very helpful in terms of equity type investment. What we are trying to get to, frankly, is to have a suite of things that we can deploy for the marketplace and have something that suits everybody's needs. Clearly, some of that is in development, as the cabinet secretary said. Thank you. Just precisely on the business development bank itself, under which agency will that sit, has that been decided? Who will operate and manage and have oversight of the Scottish Development Bank? I think that we are working most closely with Scottish Enterprise on all of that at the moment. Okay. Do you have any idea in terms of timing when the plans will be announced in terms of how that will look? I think that it is difficult to be precise at this stage. There is quite a lot of work going on in this just now. Some of it is new ground for us, that is why I have taken in quite a lot of outside opinion and advice. I am quite conscious that there are a number of members who have some experience in that, and we are very open to our responsibility to do it, and we will do it, but if there are other suggestions from members, I would be happy to receive those. Thank you very much, cabinet secretary, and our other guests for coming in today. That is the conclusion of this evidence session. Thank you very much once again for coming in.