gender business. The next item of business today is a statement by Derek Mackay on provisional outturn 2017-18. The cabinet secretary will take questions after his statements, so for those members who wish to ask a question, I encourage you to press your request to speak button as soon as possible, and I call on the cabinet secretary. I welcome the opportunity to update the Parliament on the provisional budget outturn for the 2017-18 financial year. The provisional figures that I'm announcing today are set against a backdrop of unprecedented change in Scotland's fiscal landscape. Scotland Acts in the Frisco framework have fundamentally changed the sources of funding that underpin our spending and introduced significant new devolved financial powers. One example of those changes in the new Scotland reserve arrangements brought in by the Scotland Act 2016, which is to replace the previous budget exchange mechanism and cash reserve facilities. The new reserve supports the Scottish Government in smoothing all types of spending across financial years, assisting with the management of tax volatility and determining the timing of expenditure. The Scotland Act 2016 also increased our borrowing limits to £450 million a year and have made full use of the facility in 2017-18. Looking forward, the Scottish Government's first medium-term financial strategy was published on 31 May. The MTFS explains the fiscal framework in the funding arrangements that the Scottish Government now operates within, outlines our approach to financial management and fiscal rules, sets out a range of possible funding scenarios for the Scottish budget over the next five years, and details our key policy priorities and approach to supporting Scotland's economy. The medium-term financial strategy does not provide detailed budget allocations at this stage, and that will form part of the annual budget process. However, I have set out in the strategy a responsible approach to financial planning and fiscal rules that will allow us to invest in the economy and protect essential public services. Alongside the MTFS publication, the Scottish Fiscal Commission published an updated set of economic and fiscal forecasts that were used to underpin the modelling in the MTFS. Those forecasts show little change from those published by the SFC in February 2018 and are part of the budget bill process. However, they show a downgrading of their income tax forecasts across the period that the MTFS covers. The new national performance framework has been launched, setting out our vision for a more successful and inclusive Scotland. The framework was developed following consultation with the public, trade unions, business organisations, local government and civic and volokary sector organisations, which include 11 key outcomes that we want to achieve for Scotland. I will now turn to the 2017-18 provisional outturn. Under the current devolution settlement, the Scottish Parliament is not permitted to overspend its budget. As a consequence, we have consistently adopted a position of controlling public expenditure to ensure that we live within the budget control limits that apply. I can report that the provisional expenditure outturn for 2017-18 is £30.9 billion against a fiscal budget of £31.4 billion, resulting in an overall cash variance of £453 million. Of that variance, £358 million relates to the fiscal resource expenditure and £84 million to fiscal capital. The remaining £11 million relates to financial transactions funding, which has ring-fence to meet the costs of loans or equity investment to private entities outside the public sector. I have already notified Parliament of my plans to generate underspends of £235 million to carry forward to 2018-19 as part of the budget that was approved by Parliament earlier this year. The total variance also includes £100 million, allocated to the Scottish Government by HM Treasury, one year earlier than expected. That relates to the new social security agency's set-up costs and is carried forward to 2018-19 in full through the Scotland Reserve. Taken together, those items, which were already committed in 2018-19 spending plans, account for £335 million of the overall £453 million cash variance. According to devolved taxes and plays to inform Parliament that, for the second year running, income has increased. Total provisional income from land and boundary transaction tax and Scottish landfill tax is £706 million, £50 million above the initial budget forecast and an increase of £73 million or 12 per cent year-on-year. The £50 million surplus income from devolved taxes again forms part of the overall £453 million variance and will be added to and set aside in the Scotland Reserve. I am also taking a prudent approach to ensuring that when the Government provides guarantees that annual fees are set aside in the Scotland Reserve as a contingency measure against calls being made on them. In 2017-18, the total was £2 million. After taking into account the social security funding, the plans carry forward for the 2018-19 budget, surplus tax receipts and fees for guarantees. There is then a remaining underspend of £66 million not yet committed to expenditure. That modest sum represents just 0.2 per cent of the overall fiscal budget and will also be carried through the Scotland Reserve and will be available to support management of future budget volatility, a key feature of the new world that we live in and with the devolution of the powers set out in the Scotland Acts. Finally, and in addition to the above, there is a provisional non-cash underspend of £123 million. The non-cash budget is used for technical accounting adjustments such as depreciation and apparements that cannot be used to fund public services. That, of course, represents no loss of spending power to the Government. Moving on now to Scotland's economic outlook, the potential economic impact of Brexit will be a factor both in the tax revenues that are likely to be raised in Scotland and in future spending decisions. Unfertynties surrounding what the final Brexit deal will look like in areas such as future access to EU funding programmes specifically are hampering economic growth and further investment in Scotland. The Scottish Fiscal Commission is clear that Brexit will have a negative impact on the Scottish economy, reducing productivity, trade and migration. According to all independent forecasters, Brexit uncertainty is the key factor affecting economic growth forecasts. The pace of growth over the next five years is expected to be below historic trend, with GDP growth between 0.7 per cent and 1.4 per cent in 2018, although that is expected to increase in 2019. However, Scotland leads the way on many key economic indicators such as the fastest productivity growth in the UK, more informed direct investment in the rest of the UK outside London, growth in research and development spending and growth in international exports. Scotland also has the highest proportion of employees getting paid at least the living wage and outperforms the rest of the UK on female and youth employment. There is also good news regarding future tax revenues, with the Scottish Fiscal Commission forecasting that land and build and transaction tax revenues will be £26 million higher in 2018-19 at £614 million and will increase over the life of the medium-term financial strategy. The Scottish Landfill Tax is forecast to rise next year by £8 million, but will fall over the next five years due to our commitment to move waste from going to landfill to being incinerated. Despite the challenging economic environment, we have infrastructure investment plans for 2018-19 of over £4 billion, supporting 22,000 jobs directly and up to 40,000 in total. An ambitious programme of £20 billion over the lifetime of this Parliament. We will use the funding to invest in key infrastructure projects, such as £1 billion on city region deals across the country, £340 million of initial capitalisation for the Scottish National Investment Bank, bringing superfast broadband to every home and business by 2021 and a 70 per cent increase in research and development investment. The annual Scottish Government consolidated accounts in a statement of total outturn for the financial year 2017-18 against the final budget for the Scottish Administration as a whole will be provided to the Scottish Parliament later this year. All the figures that I am reporting to you today remain provisional as they are subject to change pending completion of the 2017-18 audit. In conclusion, the 2017-18 provisional outturn results show that, once again, this Government has prudently and competently managed Scotland's finances. The prudent management of our 2017 budget and the new financial powers have been delivered against the backdrop of uncertainty around the UK's exit from the EU, and the UK Government's continued austerity measures. I commend those figures to Parliament. I thank the cabinet secretary for advance sight of his statement. Today's statement discloses an overall underspend of £453 million. The finance secretary is anxious to stress what an insignificant sum this is, but it is worth noting that it is higher than the total cost of setting up a new independent state according to his own party's growth commission report. Today, the Office of National Statistics advised that the UK deficit for 2017-18 was just 1.9 per cent of GDP, the lowest level since 2001 to 2002, and testament to the success of the UK Government's fiscal policy, one that has been opposed at every turn by the SNP, who said that it would never work. They have been proved wrong. Moreover, the record at the UK level stands in stark contrast to the situation in Scotland, where the Fiscal Commission has downgraded its forecast of tax revenues by £1.7 billion over the next four years and by nearly £400 million in the current financial year. Unless the situation improves, that will leave a black hole in the current year's budget, which will require to be filled in the financial year 2021-22. In that context, the finance secretary's decision to transfer £66 billion to the Scotland Reserve against that contingency is a prudent one, but comes nowhere near filling the gap forecast by the Fiscal Commission. What additional steps will he take to ensure that his successor in office in three years' time does not have to carry the can for this Government's failings? Does he accept that, if the economy grew at even the same rate as the rest of the United Kingdom, there would be hundreds of millions of pounds extra to spend this year instead of having to divert resources to fill up reserves as he is having to do? I thank Murdo Fraser for his vote of confidence that he will at least get through the next three years and the next three budgets to continue in office. I welcome that vote of confidence, which is about the nicest thing that Murdo Fraser has ever said about me. In relation to the specific questions and all seriousness, we will approach the Fiscal Commission forecast. It will have more data and revisit the forecast as we approach the next big fiscal event, which is the Scottish budget following the UK budget. It is right to be prudent with our resources. It is the right thing to do to invest in our reserves. That said, there are limitations around the use of reserves as well, but I think that considering the volatility that we all now understand and the constraints within the fiscal framework, there is the right thing to do to ensure that we have reserves to draw upon in the event of forecast errors or any negative effects. Of course, Murdo Fraser also touches on efforts to stimulate the economy and my budget for this year, which is what I have tried to do. There is investment in the economy such as the 64 per cent uplift in the economy brief and a range of interactions to try and stimulate economic growth. All forecasts and all economists are pointing to Brexit, and Brexit uncertainty is the main challenge to the UK economy and Scotland's economy as well. Of course, the UK Government could remedy that by giving us greater certainty on the Brexit question, and our respective positions are well rehearsed in that regard. As to what further measures I will take, prudent financial planning, ensuring that we have the necessary resources and considering what other levers we might require in the future, such as the borrowing powers if required if there is such a requirement through the fiscal framework in forecast error. OBR will revisit the forecast, so will SFC, based on the latest data and information, and that should put us in a stronger, more informed position as we approach the next budget. In relation to the overall underspend, in going through the budget process, I was clear on what that underspend would be. There are some matters that came later in the financial year, such as some Barnett consequentials, and then there are other elements of that budget spend that is prudent, such as the request by HM Treasury to take £100 million for social security implementation early in the financial year, but not spend it until it is required, which would not be the last financial year, but that is in future financial years. I have taken on my decisions in a prudent and balanced way, and I will continue to do so. James Kelly is being followed by Patrick Harvie. Thank you, Presiding Officer, and I thank the Cabinet Secretary for Advanced Sight and Sight. The figures that are announced today in the out-turn statement of a £453 million underspend are nothing short of a scandal. The out-turn statement represents a gross mismanagement of the budget by Derek Mackay. Mr Mackay is your job to spend Scotland's budget to support local communities, not to hoard the money in the St Andrew's House bank account. It is totally unacceptable that, while yards from this Parliament, homeless people are sleeping in doorways, nearly £500 million available cash lies dormant in the SNP Government slush hunt fund. I ask the Cabinet Secretary if he will apologise to the 30 local communities that have had their libraries closed this year, to the many patients abandoned on waiting lists, waiting hospital treatment, and to the thousands of local government workers who have lost their jobs. A few key points, but I appreciate James Kelly's attempt to put some colour into the out-turn report. Unfortunately for Mr Kelly, it is true to say that in terms of the underspend, every penny that has been carried forward into the next financial year is not lost to Scotland. That was not the case with previous Labour administrations. I would like to ask the treasurer to hand money back to the treasurer. I am not handing money back to the treasurer. This is prudent management of our finances. I think that the examples that were raised by Mr Kelly were poor choices in terms of homelessness. There is no underspend in homelessness budget in terms of local government. Local government got an enhanced settlement, yes, in part, because of the negotiations that other parties very constructively engaged in, the Greens specifically, so local government got an improved settlement, and the NHS also got an uplift in their settlement, taking it to record amounts. Within all of that, I have been very clear in terms of the managed underspend, but within that as well, I am surprised that even James Kelly did not welcome the fact that we have collected more in tax than we were forecast to do, and what that meant is that we can apply that to the Scotland reserve as well. All of that, of course, represents a very strong budget that I got approval for from the Parliament in sharp contrast to the incaherent incompetent Labour proposition that you could barely call a budget that unraveled before even Mr Kelly got his feet. 11 more questions for this statement. Patrick Harvie to be followed by Willie Rennie. Thank you, Presiding Officer. Given the way that the fiscal framework operates and in particular the tax reconciliation process, I think that we need to stop viewing this annual outturn statement as a standalone snapshot of one year in isolation, but it is more about how the picture looks in the context of the years ahead. Given that, and the cabinet secretary's emphasis on tax policy generating more revenue than it had been predicted to, we are increasingly, as more use is made of devolved tax policy, we are going to have to make sure that we are identifying and mitigating the risk of tax avoidance if we are going to ensure that future annual outturn statements show tax policy generating the revenue that is needed for public services. What action is the Government taking to do that, to identify the risks of tax avoidance and take action to prevent it? Of course, in relation to those devolved taxes, we require Revenue Scotland to do that, and we work closely with Revenue Scotland to do that. It has particular policies and enforcement action around that, and it has been very proactive in relation to the landlord's action tax and the landfill tax. For income tax, we rely upon HMRC, something that we have discussed at the committee, and we have a service-level agreement there as well, but we have a general avoidance rule as well, and something that I want to see rolled out to non-domestic rates as well, so bringing forward proposals in that regard also. So I absolutely agree with the spirit of what Patrick Harvie has said, and we have plans in place to continue to do that, but we do rely on HMRC. Interestingly, of course, SFC's most recent analysis of its understanding of tax behaviours is that they were pretty accurate in terms of their understanding of tax behaviours. I think that we have to look very closely at the advice on tax behaviours when setting tax policy, but enforcement and compliance is absolutely critical. Willie Rennie to be followed by Kate Forbes. The fiscal commission's £1.7 billion downgrade must be causing the finance secretary some sleepless nights, which is probably why he mentioned the reserve five times in his statement, without telling us how much is in the reserve. The Parliament will want to make a judgment as to whether purposely holding back £235 million is a wise judgment, so can the finance secretary tell us how much is in the reserve? £192 million unallocated. Thank you very much. Kate Forbes to be followed by Adam Tomkins. I can say with greater confidence today that I am the PLO to the cabinet secretary. There has been much fanfare from the Tories about the £2 billion increase to the Scottish budget. Can I ask the cabinet secretary if he has added any confirmation from the Treasury that this is a net increase funding or might it be offset by cuts elsewhere? This is further to the question at First Minister's questions on seeing the announcements. I have sought the figures from Treasury. I have got some indication of consequentials numbers in relation to NHS spending, but anyone who understands the fiscal framework will also understand how the money is raised as a key factor. Therefore, I need to understand how that money is raised, because if it is through income tax that relates to us, then it may not be the £2 billion that is announced. Therefore, I have sought more information from the Treasury, so I have not yet got a commitment that is indeed £2 billion net for the national health service for Scotland, but I am continuing to pursue the matter. Adam Tomkins, followed by Stuart Willing. The cabinet secretary does as if Brexit is the biggest single drag on economic growth in Scotland. Brexit is, of course, happening to the whole of the UK, not just to Scotland. Why is the Scottish economy continuing to underperform the UK as a whole? Just today, this Parliament's Economy Committee said in its new report that, in the Scottish National Party Scotland, levels of GDP growth are marginal, productivity is low and wages are stagnant. How much of that is the cabinet secretary going to accept responsibility for? The UK Government does not get to walk away from responsibility for macroeconomic policy. It has conceded the point recently and, after the concession, it would be nice to see some actions on their part as well. I have outlined a range of actions in the medium-term financial strategy and in the Government's economic policies of what we want to do to stimulate the economy. The key matter is not just my opinion. Fraser of Allander Institute, Scottish Fiscal Commission and many others—indeed, all others—have said that Brexit is a huge issue. In terms of the point about disproportionate impact on subdued growth in Scotland, it was the oil and gas downturn that, in large measure, is responsible for some of that around productivity and GDP take. The forward look on productivity relates to working-age population and participation. The critical issue in that is ensuring that we have the appropriate numbers of people of working age to be able to contribute by way of output and taxation. That is why migration is so important. There are many factors on which the UK Government can engage, which the Scottish Government is responsible for. There are a range of factors as to why the UK and Scotland need to do more around productivity, and we are only seeking the powers to do so. However, I am looking forward to further economic forecasts that I think will show a more optimistic picture in relation to the economy, as the FAEI has already done just this week. Stuart McMillan, to be followed by Ian Gray. Thank you, Presiding Officer. Can the cabinet secretary outline what measures the Scottish Government is taking to provide certainty for our vital public services during the turbulent and uncertain times ahead as a result of leaving the European Union? We are doing a lot of work in terms of preparation. Clearly, the Scottish Government has a strong position in staying within the single market and the customs union. We are obviously working our preparedness in relation to that. For me, providing stability, stimulus and sustainability for our public services all go hand in hand to ensure that people can expect the best possible services and what has been and will continue to be a turbulent time until the UK Government gets its act together in relation to Brexit. Ian Gray, to be followed by John Mason. Independent analysis this week shows that, in real terms, the Scottish National Party's spending on education has fallen by 7.5 per cent since 2010, even when pupil equity funding is included, which is, of course, supposed to be additional to core provision. How can the cabinet secretary justify hoarding and underspend on that scale when our schools are struggling for resources right now and our teachers are so demoralised by pay erosion that they are considering strike action? I tried to explain within the figures how, in terms of the figure that I have outlined, some of it was planned underspend and some of it was increased in tax revenues. Some of it was around other matters such as transfers between capital and resource. Within all that, we have approved budgets that have allocated more to local government, more specifically to education. The most recent figures that I have seen have shown that education budgets are up because of the budgets that I have delivered within the Scottish Government, all of which are opposed by the Labour Party and including the £3.5 billion commitment around tackling the attainment gap, which is opposed by Ian Gray and his colleagues within the Labour Party. We are delivering competent, balanced and responsible budgets that will stimulate our economy and protect our valued public services. John Mason, to be followed by Dean Lockhart. Mr Kelly and Mr Gray seem to be misunderstanding what underspend means. Can the cabinet secretary clarify, especially for that £100 million, is that something that he is free to spend on anything that he wants, or is that very much tied down and effectively ring-fenced by the Treasury? The agreement, specifically for the £100 million, is that the Labour Party is now asking for me to spend on other things. It will be interesting to see how we equip a social security agency if the Labour Party wants me to spend on anything but a social security agency. I thought earlier at First Minister's questions that I heard Labour members asking about social security payments, so we need the infrastructure to be able to make the payments as well. Specificly on that £100 million, Treasury gave the Scottish Government the money early. We carry it over to spend it in the year that it is required to establish the agency that is prudent, responsible and within the agreement that I have with Treasury. Yes, it adds to the underspend number, but it very clearly expresses what that purpose was for. Dean Lockhart, to be followed by Ivan McKee. Thank you very much. The report that was published earlier today by the economy committee, which looked at the Scottish economy over a six-month inquiry period, concluded that economic growth in Scotland is trailing behind the rest of the UK and historic growth trends in Scotland and has done so for a decade well before Brexit and well before the drop in oil prices. Will the finance secretary follow the central recommendation of the economy committee and revise his economic strategy as a matter of urgency? I am sure that Dean Lockhart and the fair man that he is will give me time to read the report and then reflect upon it. I have not read it yet, but I will actually read it and I will then consider its cross-party findings, I would imagine. Of course, I will have a look at it and then reflect on our economic policy. I think that we are making a range of economic interventions to support and stimulate economic growth, unfortunately most of which were opposed by the Conservative party at the last Scottish budget. When I asked the Conservatives which strategy would you like me to change in the past, Mr Lockhart said that it would remove inclusive growth. That is a recommendation that I suspect is not in the committee report and not a change that I will be making. Of course, I will look at the report, I will read it and reflect upon it and I will take forward that which I think can assist our financial and economic strategy. Ivan McKeege, before by Neil Bibby. Thank you. Just to help the Labour Party to understand this, can the cabinet secretary confirm that no money is lost through the Scottish budget as a result of any underspend? Unlike years when the Labour Party was in office and handed money back to the treasury, I can again confirm that not a single penny is lost to the Scottish Exchequer, the Scottish Finance Minister, the Scottish budget as a consequence of the actions that I have taken. Today, when the SNP are in power, we have learned that the Derek Mackay has underspent the Scottish budget for 2017 by close to half a billion pounds, a staggering figure. We often hear from SNP ministers taking pride in having balanced the book, but the reality is here that we have an SNP government who are mismanaging public finances and underfunding public services. Mr Mackay said earlier that the NHS and local services are getting enough cash, but he is well aware of the fact that a lack of resources is having on hospitals such as the RH and councils such as Renfusure, which are having to roll out parking charges and cut grey bin collections due to a lack of funding. How can Mr Mackay justify the major underspend when services are being underfunded? What lessons will Mr Mackay learn to manage our finances properly so that our services get the resources that they need when they need them? I take what he says with a pinch of salt. The underspend is a fraction of the overall fiscal resource, and by law I cannot overspend, so we have to manage our resources very carefully. Not a penny is lost to Scotland. Over the course of the budget negotiations, we discussed how the underspend would be spent in the current financial year, and, in addition to all that, the budget that the Labour Party voted against, that this Government voted for, meant more money for local government, more money for the health service, and it also included lifting the pay cap and many other interventions. In relation to local government services, of course, Renfusure Council under SNP leadership is delivering new and improved services, and I am sure that Neil Bibby will reflect on his negative scaremongering once again. Can the cabinet secretary outline what measures the Scottish Government has taken to support economic growth and to weather the economic disaster of being dragged out of the European Union? I think that the Scottish Government has been able to express and had some considerable vindication from the UK Government on the impact that Brexit will have on Scotland's economy, but the actions that we are taking include the most comprehensive package of business rates relief anywhere in the United Kingdom, a 64 per cent increase in the economy portfolio, a 70 per cent increase in investment in business research, a new national manufacturing institute for Scotland, capitalisation of the national investment bank, £4 billion in infrastructure as well, and just some of the examples of how this Government is investing in our economy to grow our economy in an inclusive way. Thank you very much, cabinet secretary, and members. That concludes our statement on the provisional outturn. We will move on to the next item, which is a debate in the name of Angela Constance on world refugee day. We will just take a few seconds for the minister and members to change scenes.