 The next item of business is a debate on motion 7602, in the name of Kenneth Gibson on behalf of the Finance and Public Administration Committee, on the Scottish budget 2023-24. I would like members wishing to participate in the debate to press the request-to-speak buttons. I call on Kenneth Gibson to speak to and move the motion on behalf of the Finance and Public Administration Committee around 12 minutes, Mr Gibson. Thank you, Presiding Officer, and I'm pleased to open this afternoon's debate on pre-budget scrutiny on behalf of the Finance and Public Administration Committee. The inclusion of this debate in the overall budget process was recommended by the budget process review group in 2017, with the aim of bringing greater transparency, influence and scrutiny to Scottish Government budget proposals. The debate also provides a welcome opportunity for conveners to set out how their committees have sought to influence the Scottish budget through their pre-budget reports and for Scottish ministers to respond. That's why I'm delighted to see so many committee conveners participating in today's debate, and I look forward to listening to the contributions, as well as those of committee and other colleagues. I won't touch on all our pre-budget deliberations, as, in closing, Deputy Convener Daniel Johnson will cover what I omit. This year, the FPA Committee agreed to use the Scottish Government's resource spending review, published in May, to inform a pre-budget scrutiny. That review set out spending plans for the remainder of the parliamentary term, supporting the Scottish Government's ambitions from 2023-24 to 2026-27. While not intended to provide fixed budgets, the review does provide a clearer idea of the direction of travel public finances, including public sector funding. We focus our pre-budget scrutiny primarily on three spending review areas. The impact of the cost of living crisis on the Scottish budget 23-24, proposals for public service reform and how spending priorities might affect the delivery of national outcomes in the national performance framework. Our scrutiny was also informed by the Scottish Fiscal Commission's economic and fiscal forecasts for Scotland and the Scottish Government's medium-term financial strategy, published alongside the resource spending review in May this year. We thank our adviser, Professor Mary Spowage, for her valuable advice throughout the year. We are also grateful to all those who responded to our call for views, which ran between June and August, and to our witnesses for their evidence, which has helped shape our findings. However, with some notable exceptions, witnesses continue to emphasise the need for increased spending in their own portfolio areas and are reluctant to provide suggestions of where funding might be de-paroritised, where additional revenue could be raised and what spending priorities should be. There is more often a willingness to assert that increased funding for their own budget area in the short term will lead to longer-term savings elsewhere in the future. Pre-budget scrutiny came at a time when the cost of essential items such as food and energy was increasing faster than incomes and inflation to reach the highest for some 40 years. The Scottish Fiscal Commission's May forecast stated that the Russian invasion of Ukraine, steeply rising energy prices and further global supply chain disruptions in China have led to a challenging economic outlook. The UK faces the biggest annual fall in living standards since the equivalent records began, 7.1 per cent by the end of next year, according to the Office for Budget Responsibility. Just before we published our pre-budget report at the start of November, a third UK Prime Minister in his many months took office and serious concerns were emerging in relation to UK economic stability. In fact, economists and commentators have already spoken of the UK having entered recession. It is 2023 budget that the Scottish Government made a series of savings in year to identify allocations that could be used to fund cost of living support, including improved public sector pay offers. We heard in evidence from the Deputy First Minister last week that uncertainties remain on how it will balance the books for this financial year, with a sum of between £200 million and £500 million still to be found. It is concerning that there is still this level of uncertainty so late in the financial year and any further information that ministers can provide today will be welcome. The committee also notes Scottish Government expectations that will not be in a position to carry over any resource into 2023-24, placing additional pressures on public finances next year. We heard evidence that the cost of living crisis was impacting people from across society, from businesses to households to voluntary bodies to communities. On our pre-budget report, we welcomed the Scottish Government's commitment to provide immediate support to those most in need. We are concerned about inflationary pressures persisting into next financial year, and asked the Scottish Government to look further ahead at how immediate fixes over this winter might be spending into its budget for 2023-24. Responding, ministers pointed to the upgrading of devolved benefits, including the early upgrading and expansion of the Scottish child payment, continuing the fuel and security fund and doubling the Scottish child bridging payment as ways it would continue to support people through the cost of living crisis into 2023-24. We heard compelling evidence that the crisis was having a disproportionate impact on women and asked how the Scottish Government could best support women through these challenging times. We also urge ministers to put in place robust and transparent processes to evaluate all policies and outcomes for their gender impact. We hope to better support committees in policy screening decisions for their potential impact on women, including through evidence gathering. In its response, the Scottish Government said that it was committed to mitigating the disproportionate impact of the cost of living crisis on women. It also accepted the principle of integrating intersectional gender analysis into its policymaking, and it is taking it forward as part of its wider work on equality and human rights budgeting. We have asked in our budget report for more details on exactly how that has been taken fault. During pre-budget scrutiny, we had different views on whether the Scottish Government should, in its 2023-24 budget, follow our diverts from the UK Government's income tax policy. We explored in more detail the Scottish Government's income tax plans for the next year and a budget report published yesterday, including the potential for negative behavioural impacts reducing revenue, as highlighted by the Scottish Fiscal Commission. Where we continue to find common ground is on the need to increase productivity, wage growth and labour market participation in Scotland to bolster sustainable economic growth, including growing the tax base and the need for greater research and development investment and support for innovation. Those issues are of particular interest to the committee and ones that we continue to raise as part of our wider work, including on our forthcoming scrutiny of the Scottish Fiscal Commission's first sustainability report, which will be published in March. The Scottish Government has pointed to its national strategy for economic transformation as a stimulus for us addressing inactivity, low productivity and slow wage growth, and we continue to seek more details of how it will do this, along with information on how budgetary pressures will impact on delivery. The decision to cut employability services in year 2022-23 was of particular concern to the committee, albeit we recognised that that was just one of many difficult decisions having to be taken in order to fund public sector paydeals and address the cost of the line crisis. We asked the Scottish Government for the analysis that had undertaken on the reduction in funding for employability services to understand any adverse impact, including its ability to meet child poverty targets, and I raised that directly with the First Minister at the conveners committee in September. We thank the Deputy First Minister for the assessments carried out and welcome the rise in employability funding in 2023-24. A significant focus of the resource-binding review was on public service reform. The review was intended to provide, in a quote, fresh vision for our public services reform programme and set out a coherent package of action that will drive progress over the life of the current Parliament, improving outcomes, while driving efficiency and value for money. Those proposals also formed a significant element of our own pre-budget scrutiny, and we asked stakeholders to provide their views on the Government's proposals to achieve reform through digitalisation, maximising revenue through public sector innovation, reform of the public sector estate, reform of the public body landscape and improving public procurement. We noted in a pre-budget report that reform and efficiencies often require expenditure up front and time to deliver, inviting the Government to confirm whether its plans to achieve savings by the end of the parliamentary session are realistic. The limited information provided in the Scottish Government's response did not give us sufficient confidence that its plans are achievable within this timeframe. The resource-binding review committed the Scottish Government to publishing initial outcomes and plans for the public service reform programme alongside the Scottish budget. In our pre-budget report, we asked that ministers develop detailed and transparent proposals, clearly setting out priorities, funding, timescales and intended outcomes, as well as a potential impact on service delivery. Unfortunately, expected outcomes and informed plans were not published with the budget, and there was no explanation for that, other than the suggestion that work is on-going. As such, officials are engaging with public bodies to initiate action in identifying opportunities to reduce overhead costs, such as rationalisation of estates and public bodies. We recorded our concern about that approach in our budget report and sought further detail to provide us with the assurances that we need that this work is on track and will improve public service effectiveness. We recognise the challenges that the Scottish Government faces in identifying additional money to fund public sector pay rises in response to inflation. The committee noted in our pre-budget report that the Scottish Government is seeking to reduce the public sector headcount over the rest of the parliamentary session to pre-Covid levels, from around £447,000 to around £417,000. The First Minister's commitment to a policy of no compulsory redundancies with regard to that is welcome. We recognise this in an uncertain time for all concerned and ask for assurances that the Scottish Government will take a partnership approach with the workforce and be open and transparent on these difficult issues. We further sought assurances that ministers will approach reducing the public sector headcount in a systematic, transparent and co-ordinated way in tanning with the public service reform agenda while minimising adverse effects on public service delivery. In response, the Scottish Government said that it has developed its proposition on targeted workforce growth in priority areas than it has for individual public bodies to determine locally the target operating model for their workforce. Again, we believe that more information is required. We continue to pursue progress with public service reform, pay and headcount our budget report and look forward to receiving more information from the Scottish Government on these issues in due course. Finally, I want to return to where I started, my speech, the resource spending review. At the time that it was published, the committee welcomed the certainty and transparency that it provides in relation to expected spending of two to two years, albeit some of the decisions that have to be taken in delivering that report would have been very challenging. However, as acknowledged by the Deputy First Minister and recent evidence to the committee, Scotland's economic financial circumstances have changed dramatically since May. Therefore, the Scottish Government will provide an update as soon as possible. I look forward to hearing colleagues' contributions. I am pleased to move motion S6M-07602 in my name that the Parliament notes the pre-budget scrutiny undertaken by the Finance and Public Administration Committee and other parliamentary committees. Thank you very much indeed, Mr Gibson. Before calling the cabinet secretary, could I just add a gentle reminder to those who haven't already pressed their request-to-speak buttons? I wanted to speak in the debate to do so as soon as possible, cabinet secretary, around 10 minutes please. Thank you, Presiding Officer. Today's debate is an important part of Parliament's scrutiny of the Scottish budget and I appreciate the engagement across committees in the preparation for this debate. This has been a particularly challenging budget to develop. The war in Ukraine, the surge in inflation, the damage to the public finances done by the mini-budget in September all create an exceptionally difficult landscape in which to develop and bring forward the Scottish budget. We have had to make, as a Government, difficult choices and Parliament will have to consider and determine those choices in the course of the next few weeks. A balance has to be struck between the funding available and what that can deliver for the people of Scotland. We have actively chosen to increase the funding available to the Scottish budget through our fair and progressive approach to taxation. We have brought to Parliament a budget that sets a different path for Scotland. It is a path that prioritises the elimination of child poverty, the transition to net zero and the sustainability and effectiveness of our public services. The Public Finance and Administration Committee report recognises the nature and the scale of the financial challenges that we continue to grapple with in the current financial year and which set a very challenging context for the year ahead. As I made clear in my evidence to the committee earlier this month and I take seriously the points made by the convener of the finance committee in his comments about the undesirability of there not being a path to balance the budget at this stage in the year, I can assure Parliament that that is not for the want of trying and it is a measure of the scale of the challenge that we face because of the factors that I recounted earlier on in my speech. I assure Parliament that we are working to address those issues in the time available to us. We have, of course, limited fiscal powers so we have had no option but to reduce our spending in order to meet the pressures on our budget, not least of which is the £700 million of additional funding that we have allocated for public sector pay, which, of course, makes a substantial contribution to assisting members of the public who are public sector employees in dealing with the cost of living crisis that we face. We recognise that public sector pay is an important issue to Parliament. I explained in my budget statement that I was not publishing a public sector pay policy because of the uncertainty over the outlook for inflation and the need to conclude some pay deals in the current year. We can still make progress on pay discussions for 23-24. Indeed, the Scottish Government is continuing to engage on pay issues with trade unions and public sector employers and I, personally along with the health secretary, have been actively involved in negotiations in relation to the agenda for change groupings that we are now trying to resolve for 23-24. I appreciate, Presiding Officer, that there are a wide range of views across the chamber on what this budget should support. This debate offers an opportunity for this wider conversation and I look forward with interest to hearing the perspective from a range of committees in their contribution to the debate today. I thank the France and Public Administration Committee for its pre-budget scrutiny report and stage 1 report and for its acknowledgement of the wide-ranging challenges facing the Scottish budget. I will carefully consider the recommendations in the committee's report and reply in writing in due course. With the 23-24 Scottish budget, I have carefully balanced the growing asks against the funding available. The budget recognises that we need to take action now to enable us to overcome the even greater fiscal challenges that lie ahead. Our approach is set out in our medium-term financial strategy and we continue to take steps to improve this each year in response to the challenges that face us. Further updates in relation to the implications of the current environment and the different environment to which the convener referred will be set out by the Government in due course and likely in the medium-term financial strategy. Critical for the Scottish Government is our continued commitment to ensuring that our public services provide the support that people in communities need, improving outcomes and reducing inequalities whilst remaining fiscally sustainable. The UK Government's financial plans will make this incredibly challenging with the funding outlook for later years of the spend-in-view period looking increasingly bleak. For those and other reasons, I have taken decisions to increase the higher and top rates of taxation in the next year to boost the revenue available to the Scottish Government and the Scottish Parliament in addressing those questions. Reform of our public services is vital to ensure the sustainability of our public services. We have already pursued those issues with public bodies to set out our approach. That approach is built on joining up service delivery to direct resources towards more person-centred services and in doing so make better use of resources. Our thinking on this issue was set out in some detail in the Covid recovery strategy published just over a year ago. Secondly, we will undertake a rigorous review of the public body landscape, the work that public bodies do and how resources are used to improve outcomes. This work is not easy and it is a whole system approach that we know will take time to deliver the results that we require. Thirdly, we are expanding the utilisation of digital technology in the delivery of our public services. Finally, we will carefully manage public sector employment in dialogue with public bodies and with our trade union partners, who must be at the heart of dialogue on all of these questions. Change happens when we all buy into and contribute to a vision of effective, sustainable person-centred services that is achievable and ambitious. That will be the focus of the public service reform work that the Government undertakes. I would like to place on record my thanks to all the committees for their scrutiny work on the budget and I will try to reflect on the time available to meet although I will come back to some of these questions in my closing speeches when I have heard from committees about some of the issues that we can further address. The Economy and Fair Work Committee acknowledged the current challenging economic circumstances and has expressed interest in the financial support for a range of economic and business areas, including enterprise agencies, tourism and the hospitality sector. The 2023-24 Scottish budget maximises the support that we can deliver for businesses through the budget directly and through non-domestic rate support mechanisms. With the Health, Social Care and Sport Committee, it is acknowledged that the scale of the financial and operational challenge across the health and social care sector is unprecedented. That is why, in the 2023-24 Scottish budget, we will provide over £19 billion of investment in health and social care, an increase of over £1 billion, which has been made possible due to the additional revenue that we have raised through our fair and progressive taxation system. That exceeds our commitment to pass on all of the health and social care resource consequentials to the health and social care system. The Social Justice and Social Security Committee offered views on a range of social justice and poverty issues. The Government takes those issues seriously and the response of the Government in the budget to those significant issues I hope is commensurate with the seriousness of the issues that are put to us by the committee. We have taken exceptional steps to support Scotland through the cost crisis and by the end of March 2023 we will have invested around £3 billion in a range of measures to support households. We are also investing £442 million in delivering the Scottish child payment, the most ambitious child poverty reduction measure in the United Kingdom. We hope that that measure, along with the uprating of all the other Scottish benefits in April 2023 by the September CPI figure, will demonstrate that we have taken a comprehensive package forward that will help us to eliminate child poverty within Scotland. The Education, Children and Young People Committee raised the important issues of colleges, universities, early learning and childcare and the education and skills resource budget for next year will increase by £132 million to over £3 billion to enable us to address many of those questions. The local government housing and planning committee focused its budget scrutiny on affordable housing. The Government has put in place investment to support the continuation of the long-term affordable housing programme and we will make available over £750 million for affordable housing next year. The local government settlement has been enhanced by a cash increase of £570 million or 4.5 per cent, which represents the scale of the increase, a real-time increase of 1.3 per cent for local government. The net zero energy and transport committee sought evidence on topics including the fairs fare review and bus support, heat and buildings and the joint budget review. We have set out a range of measures including the investment of over £1.8 billion in heat and energy efficiency over the course of this Parliament to enable us to properly address the challenges put to us by the committee. Also, as we have set out on previous occasions, we have expanded the fuel insecurity fund. In drawing my remarks to a conclusion, let me just highlight that in the work that we have taken forward in the recent announcement of the islands deal, we have set out commitments to support our rural and island communities and the rural affairs budget equally reflects those challenges. I look forward to hearing the reflections of other committees and will reflect on those issues in the closing speech. I stress the importance of ensuring that we set a budget that utilises the resources available to us but also makes clear that some very difficult choices have had to be made to get us to the point that we are in and I look forward to hearing the views of committees as we take forward our constructive engagement on the Scottish budget. We now move to the open debate. I call for Gillian Martin to be followed by Sue Weber for up to seven minutes. I am pleased to contribute to this afternoon's debate on the budget. To inform our pre-budget scrutiny, the committee issued a call for written evidence that received a total of 20 responses. We took oral evidence for selected witnesses on 20 September and wrote to the cabinet secretary with our recommendations on 27 October. I am grateful for the cabinet secretary's written response of 15 December and his appearance before the committee on 10 January to answer questions on the budget. The evidence that we received highlighted concerns about the unprecedented financial pressures that our health and social care services currently face. Those pressures have been exacerbated by the spiralling cost of living, which is having a very damaging effect on the wellbeing of our citizens and our health and social care workforce, and the vastly increased cost of running the NHS in terms of fuel costs and inflation. Witnesses also highlighted the long-term impacts that the Covid-19 pandemic inflicted on the Scottish population's physical and mental health, as well as the wellbeing of the NHS workforce, which will require on-going financial support in the years ahead. Long Covid continues to impact the health and social care workforce, unpaid carers, those receiving care and the wider population, and that, too, will continue to come at considerable cost as we find out what the treatments may be for that in the future. However, the impact of the pandemic has not been universally negative, because a lot of those who are responding to our call for evidence were keen to highlight some positive experiences with the pandemic and how it was managed has helped to drive healthcare delivery innovation. One of our recommendations to the Scottish Government was that it must continue to foster a culture of innovation in health and social care and ensure improvements to the efficiency and effectiveness of service delivery brought about by the pandemic or brought about by the management of the pandemic by our health and social care workers continues to be embedded and built upon. For that to happen, we need to make sure that we are properly monitoring and evaluating the cost-saving benefits of innovation and learning lessons. As one of our witnesses put it to the committee, encouraging innovation includes giving practitioners the confidence to try new approaches. My committee has long asserted that substantial gaps persist in available data related to various aspects of health and social care and stakeholders contributing to a pre-budget scrutiny told us that this is impeding budget tracking and the assessment of spending against defined outcomes. It may mean that certain outcomes are not being measured at all. We recognise the £1 billion uplift in health spend and the increase in pay for NHS staff in the constrained budgetary environment that the Scottish Government is in. However, it is vital that we have the data to be able to measure the impact of that spending accurately against those outcomes and to target fine-out resources as effectively as possible. Many contributing to a pre-budget scrutiny have highlighted the effect of single-year budgets on longer-term financial planning and they say that this can hamper efforts to prioritise resources towards preventative spending and to meet NHS Scotland's stated ambition of becoming a service, which is both environmentally and socially sustainable. COSLA wrote in its submission to the committee that, overall, there remains a continued focus on input and output measures rather than outcomes when it comes to public spending and this drives behaviour and spending in ways that may not necessarily be the best value. We fully appreciate the immense strain that our health and social care services are currently under. Levels of demand are immediate and acute and, as I have said, they are unprecedented. However, prioritising preventative spending and net zero investment is a nettle that we know that we need to grasp, if we are to stand any chance of putting health and social care finances on a more sustainable footing in the long term. The committee has called for clarity on when the Scottish Government will bring forward an updated medium-term financial framework for health and social care. We do recognise that framework does not set budgets but, nonetheless, publishing it would give health and social care decision makers greater certainty and confidence to be able to plan funding longer term and give greater priority to the preventative spending that we know will unlock better health outcomes in the future. Finally, in our letter to the cabinet secretary, the committee also emphasised the importance of taking a whole system approach to assessing the health impact of non-health spending. His response is that I commend the cabinet secretary's commitment to working with Public Health Scotland to explore better ways to embed the consideration of health issues into decision making at the national and local level. We also want to recognise the cross-portfolio working on tackling the poverty-related determinants of ill health. I think that that has been a real step change in approach. Assessment on the population health impacts of the cost of living has to be done. There has to be health impacts assessments on that. The committee has repeatedly made the case for more systematic use of health impact assessments, including as part of the budget process. I hope that the publication will provide an exemplary, increasingly systematic application of a health in all policies approach to future budgets. In conclusion, there can be no doubting the huge financial challenges that the health and social care sectors currently face. However, if we are to achieve the goal of placing health and social care finances on that sustainable long-term footing, we as policy makers must retain a focus on longer-term planning, preventative healthcare and an integrated whole system approach, fostering innovation and effectively measuring our progress and improving those long-term outcomes. I rise today to speak on behalf of the Education, Children and Young People Committee. For its budget scrutiny, we chose to look at both ends of the educational spectrum, early learning in childcare and further and higher education. August 2021 marked the introduction of the duty on local authorities to secure 1,140 hours of early learning childcare for all three and four-year-olds and eligible two-year-olds. You will know that local authorities have a dual role. They are the ELC providers, but they also commission services from PVI nurseries and childminders. Since the roll-out of the 1140 hours, PVI providers have faced significant difficulties in recruitment. The Scottish Child Minding Association told us that during ELC expansion, the sector has led to the loss of more than 1,400 childminders. The national day surgeries association described to us a crisis in the ELC workforce caused by the expansion in local authority employment and the pandemic. Issues raised with us include that rates of pay to providers differ across local authorities and the Scottish Government guidance does not set out a specific rate for local authorities to pay. Therefore, the committee recommended that a mapping exercise should be carried out because we want to find out what hourly rates are being paid to staff across both local authorities and the PVI sector. We want to know the extent to which staff are moving from jobs in the PVI sector into local authorities and we want to know the monetary value of in-kind support provided to the PVI sector. We found that the rates paid to the PVI and childminding sectors vary across local authorities. For three to five-year-olds, rates range from £5 an hour in Orkney to £6.40 an hour in West Lothian. And that different rates apply for two-year-olds and in some local authorities different rates are paid to childminders. The committee is aware that a small number of local authorities do not provide an uplift in funding to the PVI sector for two-year-olds despite the increase in costs to provide this. We also heard that underfunding is an on-going concern for many in the PVI sector, several of whom are now operating at a loss. We heard that the Scottish Government is reviewing the overall process for setting the sustainable rates and we do look forward to receiving information about the financial health of the sector and the critical issue of staff pay and terms and conditions. As part of the inquiry, we learned that some two-year-olds are eligible for funded places but that uptake has been low, with the number of eligible two-year-olds taking up their places standing at around only 13 per cent in 2021. Local authorities have struggled to identify the eligible families, but we were pleased to learn recently that new data sharing arrangements will allow local authorities to target information to eligible households with those two-year-olds. We all hope that that will lead to an increase in uptake. The choice of where and when children access funded ELC is very important to parents and caregivers. Private providers can offer greater flexibility than local authority-run settings and this flexibility is essential to those who do not work around the traditional office hours, for example healthcare workers, but not only them. Cross-border provision is available between a small number of local authorities and we heard some evidence from Argyll and Bute, but this flexibility has been helpful for parents who live and work in different local authority areas. Local authorities are expected to work together to resolve cross-border authority issues and the Scottish Government has offered to look at what further work might be necessary to allow families across Scotland to access cross-border solutions. I would like to move on now to another sector offering vital services to people across Scotland, our colleges. Our colleges do fantastic work and we all want them to thrive and to deliver the skilled workforce that is essential to grow Scotland's economy. We heard about significant funding challenges being faced by our colleges. The Scottish Funding Council said that the sector is forecasting an underlying operating deficit in every academic year up to 2026-27. Staff costs make up a high proportion of colleges overall costs and the sector is projecting significant staff reductions of around 200 to 300 full-time equivalent staff members each year in the next five years. The committee is thinking that perhaps we should be giving a bit more to the colleges and a bit less to the universities. I would hate to pre-empt our college inquiry report that is coming out, so thank you if you do not mind. We can wait until later in the year to see that. Although there is 26 million increase in the college resource budget for this coming year, it is only 0.6 per cent in real terms and it is important that colleges find out what that means for baseline funding in the future years. We heard that from Audit Scotland in 2022 because it highlighted that capital funding has consistently fallen short for maintenance in colleges. Further, given that the ability of colleges to raise funds is limited, the committee is concerned that they will not be able to meet their net zero targets by 2045. We believe that an assessment of the current position and an investment strategy should be completed as a matter of urgency. Finally, I will speak briefly about universities. Our universities have a fabulous reputation across the world. We welcome students from across the world to recognise the cultural diversity that they bring. However, Scotland's funding model for universities is now structurally reliant on international fees. With this source of revenue forecast to overtake Scottish Government funding as a percentage of the sector's total income by 2023-24, we have asked the Scottish Government how it plans to ensure long-term sustainability and how it plans to mitigate the risks of reliance on international student fee income. I am sure that the members in the chamber would like to join me in thanking the staff who deliver vital services to children and young people across Scotland. I welcome the opportunity to speak in the debate on behalf of the Constitution, Europe, External Affairs and Culture Committee. We focused our pre-budget scrutiny on culture spending portfolio. I thank all those who attended our roundtables and who submitted evidence to our committee. Culture spend represents a relatively small proportion of the budget. The return on investment in culture and heritage and the arts is significant. Culture enriches our lives and provides a platform for innovation, and it is of strategic national importance. From the Edinburgh festivals, which attract over 4 million people to our capital each year, and Scotland's scheme sector, which contributes half a billion pounds to the economy and is set to become a billion-pound industry by 2030. Our grassroots cultural organisations also work in our communities up and down the country, changing lives every day. The role of Scotland's cultural heritage is intrinsic to who we are as a nation. It plays a crucial role in how we market and position ourselves globally. Burns Night last night being just one example. Over the last year, the existing budgetary challenges faced by Scotland's culture sector have become much more acute. The evidence that we heard was clear, and it was sobering. The committee found that the culture sector has experienced significant financial pressures, driven by, as Ian Monroe for Creative Scotland said, a perfect storm. It has reduced income generation, increased operating costs and longer-term budgetary pressures. That comes as the sector struggles to recover from the Covid pandemic and has been compounded by the cost of living crisis, which is affecting us all. Indeed, we heard that the cost of living crisis presents an even greater short and medium-term challenge to the culture sector than the pandemic. Let's not forget that culture was among those sectors hardest hit during the pandemic. We were told that the emergency support provided by the Scottish Government had been essential in helping many cultural organisations' state of thought. However, now the sector's already fragile recovery from the pandemic is in doubt, with cultural organisations vulnerable to significantly increased operating costs. That is followed on from the longer-term budget pressure for the culture sector stemming back to 2010. In its report, a sustainable arts funding system for Scotland in session 5 of the Parliament, the Culture Committee pointed to a real-term reduction in funding for the arts. During our evidence sessions, John Leighton, director-general of the National Galleries of Scotland, made it clear to us that the roots of the current financial challenges, the likes of which have never before been witnessed or indeed imagined, lie in the patterns of funding across a longer period. Creative Scotland's core revenue budget has reduced in real terms by approximately £13.1 million since 2010-11. The impact of those longer-term pressures combined with the further fiscal pressure arising from the recent resource spending review featured as key themes in the evidence that we received. Should the spending review plans prove accurate, the funding for culture and major events would fall in real terms by estimated 4.7 per cent in 2026, albeit being protected in cash terms. This year's budget settlement for Historic Scotland and the National Galleries of Scotland was welcomed and said to provide a year-long breathing space. However, when I consider the rationalising of the states that Mr Gibson spoke to in his contribution, this is a very different challenge for Historic Scotland than it is for other organisations. Funding for Creative Scotland is down by more than 10 per cent, but it will be offset by the use of national lottery income and reserves while the Scottish Government faces budget constraints. While we welcome the cabinet secretary's reasoning for the decision at the committee, it is not recurring money and therefore not a long-term solution. The committee recognises that other areas of the budget are also under considerable pressure, and there are therefore no easy budgetary solutions in tackling the considerable difficulties facing our culture sector. However, there must now be an increased urgency to accelerate innovative solutions to the funding challenges that culture faces. That includes the development of additional public and private revenue streams to the sector. The committee would want to see progress being made on establishing a percentage for the arts scheme, something consistently raised particularly by our community and third sector organisations. We should consider how the culture sector could benefit from the proposed transient visitor levy, given the role culture plays in attracting visitors to Scotland. The mainstreaming of culture across portfolios is something that we have discussed at great length in committee, and we would like to see investment in culture from other budget lines being considered. The reappaisal of what is considered to be health spending, recognising the contribution that preventative spend in the arts makes towards health and wellbeing, whether that is through a dementia or COPD choir or CAF classes tackling isolation, stigma and mental health. On the Scottish Government's aim to redirect funding towards demonstrable preventative approaches, we need to see progress. Those are recommendations that the committee has made previously, and in the face of the perfect storm, we reiterate them. As the evidence we received suggests, a strategic approach is still lacking when it comes to mainstreaming culture. To quote Sir John Layton, the ambition to embed culture in the health and wellbeing is still rotating in mid-air rhetoric. We welcome reassurances from the cabinet secretary given to the committee that closer portfolio relationships are being developed, but we need to see this in action. If I could now turn to multi-year funding. You're going to have to wind up on my freed misadans in that seven minutes. Apologies, Presiding Officer. I shall leave it there. Thank you very much. I appreciate that, Ms Adamson. We are quite tight for time, I'm afraid. I now call Claire Baker to be followed by Shavone Brown up to seven minutes, Ms Baker. Thank you, Presiding Officer. This time last year, the Economy and Fair Work Committee was calling for support for businesses to recover from the pandemic, encourage investment and create good employment opportunities. At that time, we all acknowledge the challenging economic circumstances, but looking ahead to the next financial year, there will be no less challenging. Indeed, the committee heard that, for some sectors, the economic outlook is worse than last year and that business support is even more urgent. I'll focus on two of these sectors, tourism and hospitality. In the lead-up to Christmas, the Scottish Tourism Alliance told the committee that, from a business point of view, everyone would say that we are in a worse place now than we were last year without question. In the hospitality sector, wage inflation and the rising costs of food and drink are continuing concerns, but increased energy costs dwarf the problem that businesses were experiencing. We know that tourism can provide sustainable economic growth across Scotland, but the sector is also under severe pressure. Two of the committee's key budget recommendations to the Scottish Government were to first work with the Scottish Tourism Recovery Group to identify the best business support for the sector, specifically including further business rate support, and secondly, to protect Visit Scotland's international promotional budget as the expenditure is crucial to maximising income for the sector in 2023-24. The written response to the committee and the Deputy First Minister's evidence to us last week set out the measures that the Scottish Government will take to help all businesses, but those did not include targeted support specifically for the tourism and hospitality sectors. The Scottish Government's plan to freeze the poundage and to create transitional release, which will, together with the small business bonus scheme, benefit some properties in the hospitality sector, are welcome. However, the Economy and Fair Work Committee was strongly in favour of tourism and hospitality sectors being prioritised for business rate support. We are disappointed that enhanced targeted support for these sectors is not on the table, given that the concerns have been expressed. Similarly, in response to the committee's call to protect Visit Scotland's international promotional budget, the Scottish Government's written response did not provide comfort. At her evidence session last week, the Deputy First Minister sought to provide assurances that joint promotional work can be undertaken with a range of partners, creating efficiencies and that there had been a shift in the direction of digital marketing. The committee acknowledges that Visit Scotland is effective with its marketing spend, but it remains of the view that it would be short-sighted to cut back on the budget for international promotional spend. There is a real opportunity for bringing spending power to Scotland, one that would support our tourism and hospitality sectors. There is strong evidence that international visitors stay longer and spend more in local economies. Investment in this area brings financial rewards and supports regional economies. An opportunity to recognise an Ireland, which announced a £62 million investment into tourism attractions. The committee does not underestimate the financial pressures facing the Government, but we want to see opportunities grasped and would be supportive of readjustment of other funds in this area towards international tourism. The second key committee recommendation that I will highlight relates to the Scottish Government's commitment to establish a women's business centre. The committee and many stakeholders welcomed the Scottish Government's programme for government that earmarked £50 million over the life of this Parliament to establish a women's business centre. We know that women experience difficulties in accessing financial support from traditional sources, and there is a lack of gender-disaggregated data on women's businesses and procurement activity. We also know that women tend to run smaller businesses, but there are problems accessing finance. Any business will lack the structural capital to grow or expand trade, get the right networks in place and to take advantage of opportunities. In this year's pre-budget letter, the committee noted that there is a significant opportunity for enhancing women's contribution to Scotland's economy. We asked for the establishment of the Women's Business Centre to prioritise in this year's budget. The committee was therefore very disappointed that there seems to have been no discernible progress. In December, we asked the Deputy First Minister how much of the earmarked £50 million would be spent this coming financial year. In response to our referred to review being undertaken by Anna Stewart about winding access to entrepreneurship for women, the committee was told that long-term funding decisions have not yet been made. I would point out that the Anna Stewart review was commissioned last April, and at that time it was reported that full findings and recommendations would be available in September. We are still awaiting them. I have to say that the response that we received from the Government did sound rather conditional. The committee are convinced of the benefits of a women's business centre and wants to see this progressed. That would again be a good example of the Government being able to grasp opportunities, and we know that there is so much to be gained from women being greater involved in the economy. There are two other issues identified as the committee for spending priorities in the coming year. We want to see a focus on skills development and to incentivise workplace learning for engineering and manufacturing sectors in particular. We want to see investment to support those sectors, which have a buoyant export potential to expand, an opportunity that we will focus on in green energy transition support. I will also close on employability spend. Along with the finance committee, we also have concerns in this area. At the start of September, the Deputy First Minister announced that savings of at least £50 million are needed. That included £53 million of employability support spending. Employability services support those who wish to work but face barriers to do so, and there can be many reasons why some people find it difficult to get into work. The Fraser of Allander Institute has published a very good analysis of employability spend and why it is important. At the convener's group meeting with the First Minister, and again last week when the Deputy First Minister was at the committee, I saw clarification on the reduction. The committee was told that this was removal of a projected increase to planned expenditure and not a reduction to any spend on programmes currently being delivered. The committee understands that savings have to be found. We noted the assurances given that there still remains capacity in existing employability programmes to take on new programme entrants. This is an area that the committee will wish to monitor. We are currently taking evidence on the disability employment gap and we remain concerned that the impact of this reduction is removing opportunity from people who may be furthest from the workplace, but there are people who not only deserve to be included in the workforce and in society, but they also have a valuable contribution to make to Scotland's economy. Thank you, Presiding Officer. Thank you, Deputy Presiding Officer. It's my pleasure to speak on behalf of the Covid-19 Recovery Committee on our pre-budget scrutiny work. I thank all those who gave evidence to the committee and responded to our call for views, which informed our letter to the Government in advance of the publication of the budget documents in December. I know that we have stage 1 on the budget bill coming up itself, but it is important that we have this debate today to hear how pre-budget scrutiny work of committees has helped to influence and shape the Scottish Government's budget. To begin, our committee agreed to focus its scrutiny on the ongoing costs associated with the pandemic as set out in the Covid-19 strategic framework on how the Scottish Government plan to fund its Covid recovery strategy. We were interested in the read-across between the strategic documents and the Scottish Government's other fiscal documents, such as the resource spending review, the medium-term financial strategy, and the equality and fairer Scotland statement. Before I go on to talk about our pre-budget work, I would just like to say, well, thankfully, we are no longer in an emergency situation. For a lot of people, Covid is not over, particularly those who have suffered loss and who are trying to cope with long Covid, and I offer my sympathies to them. These people are always at the forefront of our work and our pre-budget scrutiny on the recovery strategy and strategic framework, with no exception. Moving on specifically to our pre-budget work, the committee heard evidence on three main themes, Covid recovery and the cost crisis, ongoing Covid and pandemic preparedness associated with the strategic framework, house-based budgeting and policy evaluation associated with the recovery strategy. The committee also touched on the wellbeing economy and considered the read-across between the Scottish Government's strategic documents and how they support the Government's stated aim of achieving a wellbeing economy. I will take those themes in turn. Firstly, on Covid recovery and the cost crisis, we asked the Government to clarify where the budgetary and inflationary pressures had impacted on its priorities, and the ability to deliver on the outcomes as set out in the Covid recovery strategy. As we have already heard in this debate, the Government has confirmed the cost crisis has indeed had an impact, but it is still committed to making progress towards the shared Covid recovery strategy outcomes. The response to our pre-budget letter also highlighted that the recovery strategy will run up to September 2023. We asked the Deputy First Minister about this last week when he came to give evidence on the budget, and he explained that the aim is to mainstream Covid recovery across all portfolios. I fully expect this committee to be involved in ensuring that this mainstreaming is done effectively. We also called for more clarity and transparency on funding directed at achieving the priorities and outcomes set out in the recovery strategy and more detail on the evaluation and the effectiveness of these funding allocations. I was pleased that the Government agreed that the budget transparency was important and the response highlighted in its commitment to the delivery of the national outcomes as set out in the national performance framework and that its budget was set accordingly. This is an area of continued interest to the committee, and I will talk more about this later. Moving on to the on-going Covid costs and the pandemic preparedness associated with the strategic framework, we considered the report of the Standing Committee on Pandemic Preparedness and its recommendations and looked at the budgetary implications of the on-going costs dealing with Covid. We asked for an insurance that the Government would commit additional resources to implement the strategic framework if this was required to respond to a new variant of concern or a mutation in the future. This point was made by a number of witnesses and the Government has said it remains alert to the threat posed by a potential new Covid variants. It also pointed to the plans published by Public Health Scotland that set out the processes that will be undertaken to identify and assess any future risk. We also heard about the importance of funding the on-going activities in relation to vaccinations, surveillance, testing and PPE and were reassured by the Government's commitment to allocate funds for these measures. Ongoing surveillance in particular was an issue we focused on and have since explored further. We wanted to understand how the waste water surveillance played a major part in identifying Covid outbreaks during the pandemic and how this and genomic sequencing could continue to be used in the event of any future outbreak. We looked at what future investment may be needed in surveillance measures and genomic sequencing for the on-going Covid-19 response and future pandemic preparedness. Members from all parties would agree that we should be in the position where we are not ready to respond for another variant to emerge or if it is so important that, despite the current fiscal pressures, the Government allocates appropriate funding to the pandemic preparedness and on-going surveillance measures. We heard good preparedness measures need to a baseline-level funding and that project funding isn't sustainable in terms of recruitment. We also heard the learning from PPE that stocks should be actively used in briefly to the outcomes-based budget and policy evaluation, which is an issue of continued interest to us. In considering the funded policies contained in the recovery strategy, we were keen to know how the success or otherwise of certain policies can influence future policies and government budgets. We explored the OECD's Covid-19 recovery dashboard which was developed to monitor how different countries are performing in the context of recovery and during evidence the Deputy First Minister acknowledged that one of the challenges in deciding public expenditure priorities is assessing the most effective use of public expenditure at any given moment. In light of the evidence heard by the committee, we recommended that the Government consider an OECD Covid-19 recovery dashboard and explores whether Scotland should adopt a similar approach to monitoring its recovery from the pandemic. Indeed, we considered the OEC dashboard in more detail just last week at the end of our session with the Deputy First Minister. In response, the Government again referred to the national performance framework and its similarities with the dashboard as a tool for measuring recovery through the stated outcomes relating to Scotland's economy, environment and wellbeing. Finally, on the wellbeing economy, something that we have been interested in for other committees, we have heard differing views on what constitutes wellbeing economy and what is used as a policy decision making tool to help deliver a wellbeing economy. Presiding Officer, I will conclude that it is worth reiterating that one of the core objectives of the budget process is to improve transparency and raise public understanding and awareness on the budget. I believe that our pre-budget scrutiny has achieved this objection in relation to Covid-19. Thank you. I now call Ariane Burgess to be followed by Audrey Nicholl as Ms Burgess. Thank you, Presiding Officer. It is my pleasure to contribute to this debate in my capacity as convener of the local government housing and planning committee. The committee's pre-budget scrutiny this year focused primarily on the budget for the affordable housing supply programme. I will touch on that scrutiny but I will also want to focus on the work that the committee has undertaken in the predicament of local government budgets and the challenges ahead for local government. In recent months the committee has been holding evidence sessions on the interrelated issues of budget allocations for local government, the new deal for local government and the local governance review. As the committee we are yet to draw any conclusions on these matters but I want to highlight some of the key issues arising out of these sessions. To begin with however I will reflect on our work programme on fun of the affordable housing supply programme. As I said at the outset this was the focus for our pre-budget scrutiny but we also held sessions on this issue earlier in the session and we will continue to do so as we move through the session. Each time we take evidence on the issue we find the challenges faced by the housing sector are that bit more severe than the previous time we took evidence on it. In particular the costs of construction appear to continue to rise each time we explore them with stakeholders. We note that while the capital grants budget for the affordable housing supply programme has been reduced this reduction has to some extent been mitigated by an increase in financial transaction funding. That being said as the cabinet secretary for social justice housing and local government recognised in her evidence to the committee the increasing cost of construction means that this investment does not deliver the same returns as it once did. In the context of the existing grant funding regime the prospect of meeting the Scottish Government's targets for building affordable homes seems increasingly remote at the moment. As a committee we recognise that to meet these targets there needs to be a focus on innovative financing methods. We welcome the Scottish Government's recognition of this need and its establishment of an innovative finance steering group. The committee is keen to be kept up to date with the work of this group and encourages the Scottish Government to ensure that this work is progressed as a matter of urgency. We also recognise that the pressures on social landlords are not limited to the delivery of new stock but extend to investment required to decarbonise their stock as well as maintaining that stock. The committee will continue this session to explore how social landlords meet these competing priorities in the current financial climate. Lastly on housing I would like to emphasise that in investing in affordable housing we must ensure that we are building homes to meet the varied and complex needs of all of Scotland's people and that placemaking objectives are being achieved. It should not simply be a case of delivering housing numbers alone. As I said at the beginning of my speech though I also want to look at the committee's exploration of the funding challenges being faced by local government. To bring yet more news of seemingly insurmountable problems faced by local government. Amongst other things, councils are having to face the challenges of pay inflation and living wage costs. Costs associated with Covid-19 recovery energy inflation, non-pay inflation including cost of materials construction costs and contract inflation. Demand for and price sensitivity of chargeable services and the related impact on income from fees and charges. There is universal recognition that local government does not currently have the fiscal levers to meet all of these challenges. In this context we have been exploring the potential impact of the new deal between the Scottish Government and local government including the Government's commitment to introducing a fiscal framework as well as fiscal empowerment issues in the local governance review. The agreed between local government and the Scottish Government will be central to enabling local government to respond to the challenges it faces. We welcome the ambitions of the new deal in the programme for government envisaged a new deal would enable local and national government to work together to achieve better outcomes for people, balance greater flexibility over financial arrangements with improved accountability provide certainty over inputs outcomes and assurance alongside scope to innovate and improve services recognise the critical role played by local authorities in tackling the climate emergency for example through delivering heat and buildings, waste, active travel and nature restoration goals. We took evidence from council leaders before Christmas and they in particular stress the importance of multi-year settlements so councils can continue to provide services and meet new and emerging needs. We recognise the need for increased financial flexibilities including more fiscal powers to allow councils to meet local needs. It seems conceivable that the new deal as currently envisaged could provide the certainty of funding and financial flexibility sought. This year, as every year, our scrutiny of the budget was dominated by the disagreement between COSLA and the Scottish Government on whether or not there has been an increase in funding to local government in relation to funding settlement is ring-fenced or directed. It is critical that any new deal must provide greater clarity on these matters in the future. It was originally envisaged that the new deal would be in place for the new financial year. The cabinet secretary told the committee that it would take a few more months but efforts to reach an agreement would be turbo charged. It is critical that we get this right so taking longer and reaching the agreement has to be welcomed. In saying that, this can't drag on for years to come. The predicament of local government is such that a long delay will not be sustainable. The local governance review is nearly six years old. The new deal can't go on the same trajectory. We look forward to scrutinising the new deal in the coming months. We also look forward to scrutinising the upcoming tourist levy bill. As a committee we need to explore how local authorities can raise more of their own revenue while recognising that core funding from Scottish Government will still be essential to local authorities meeting the challenges they face. Finally, certainty of funding, flexibility in the use of funding and increased revenue raising will not in of themselves answer all the challenges faced by local government. In his introduction to the recent accounts commission local government finance bulletin if councils are to find a safe path through the difficult times ahead they need to focus more on service reform based on strong engagement with communities. As a committee we recognise that we are now 12 years on from the Christie commission. As much as a new deal is needed, so too is service reform and we look forward to playing our part in driving that change. Thank you. Likewise, I am pleased to speak as a convener of the criminal justice committee in this debate. Firstly, I thank committee clerks for their support during the budget scrutiny process and all members of the committee who worked collegiately together during our scrutiny process. I would also like to thank the cabinet secretary for his attendance at committee on 23 December to give evidence as part of that process. The justice spending portfolio covers the very important work of our police and fire services, our prisons and courts and many other key bodies that are critical to the safety of the public such as third sector charities. It is for these reasons that the committee was concerned to read the resource spending review of May last year which proposed flat cash settlements for the years ahead. Spice estimated that that would mean that resource spending in our remit could fall in real terms by £102 million and that capital spending may also decrease in real terms by £5.2 million. For individual bodies such as Police Scotland, the Scottish Prison Service and the Scottish Courts and Tribunals Service, we had been looking at real terms reductions of nearly 8 per cent according to SPICE. Clearly, that would have had a very significant implication for criminal justice bodies and indeed much of the evidence that we heard from different organisations was stark and reflected their concerns about the potential impact on their function, their staff and effective delivery. I thank all of those who gave evidence to us and for the count, in which they set out the challenges ahead, such as how they could fund decent pay increases for their staff if the resource spending review plans were to come to pass. For example, Police Scotland told us that for every 1 per cent in police pay in the future that would cost £11 million per year to fund which equates to around £225 staff. Hence, a 5 per cent pay increase would cost about £222 million per year and could equate to a reduction of just over 4,400 officers and staff if no extra money was worth coming. Similarly, the Scottish Prison Services chief executive said that there is no or at most very limited opportunity to the scaling back of services without significant risk to health and welfare support, reputational damage, the loss of services and the risk to operational stability across the estate. In our courts, we heard the Scottish Courts and Tribunals service might have to reduce summary and civil business by up to 25 per cent. Cut back on the £3 million that goes into that budget time judiciary and look at the unpalatable option of reducing staff numbers. We also heard from senior staff in the Scottish Fire and Rescue Service that savings of between £29 million and £43 million would equate to a reduction of approximately 780 whole-time firefighter posts or around 20 to 25 per cent of the whole-time firefighting workforce. It's for these reasons and others that the Criminal Justice Committee said that the Scottish Government should find extra resources in its budget to provide a better settlement for organisations in the criminal justice sector than that proposed in the spending review. Tom Mason. I appreciate the member giving way. She says about the Government finding extra resources and our committee convener talked about how we need to balance the budget. So did the committee have any suggestions as to where those resources should come from? For example, cutting the NHS, raising tax or something else? I thank the member for his intervention. Yes, I think it's uppermost in everybody's mind not just the committee members about if you're going to increase one budget somewhere you need to look at where that's coming from. So we certainly were very conscious of that and our priority in the budget scrutiny process was to look at the evidence that we were taking from the sector and reflect that in our report to the cabinet secretary. Sorry, I just lost my place. So we also said that any extra resources that could be provided needed to do more than just be used to support any pay increase awards within the sector. In his response to our budget report, the cabinet secretary gave assurances that he had absolutely no intention of overseeing a budget for the police force that results in 4,000 officers leaving and that he also wanted to protect the provision of high quality services in our prisons and courts. I welcome those assurances and I also welcome the fact that the cabinet secretary has been able to negotiate an additional £165 million to be invested to address the significant pressures on the justice system and I note also that the capital budget for the sector will increase by 37.4 million in 2023-24, which is very welcome. Presiding Officer, we know that the cabinet secretary has had to make some hard choices here and I trust that our pre-budget scrutiny and the evidence that we took has helped him in his process of decision making. I note that despite the extra resource there will have to be some difficult choices made. To conclude, Presiding Officer, the committee will be happy to work in partnership with the Scottish Government and other criminal justice bodies in 2023-24 and beyond to prioritise spending and make the best use of the money available. Thank you. Thank you very much, Ms Nicolle. I now call Finlay Carson to be followed by 37 minutes. I am pleased to contribute today's debate on behalf of the Rural Affairs, Islands and Natural Environment Committee. The Rain Committee has focused its pre-budget scrutiny on two areas. Firstly, the committee wanted to understand the impact that inflationary pressures had on the rain portfolio and secondly, the implementation of the islands plan and associated island programme funding specifically in regards to addressing population decline. The rain portfolio has only seen a reduction of 0.1 per cent since 2022-23 but this mask some changes to the detail and the real impact of inflation equates to a reduction in the rural affairs and island portfolio of 3.3 per cent. In addition, the half a billion pounds of saving to tackle the cost of living crisis has had an impact with over 60 million of savings coming from the rain budget including 33 million in savings from rural support. The rural support savings were described as a deferral of UK Government ring-fen funds to be returned to the rain portfolio in future years and the committee will continue to monitor the deferred funds in the next financial year. In light of the budgetary and inflationary pressures, the committee sought to understand how the Scottish Government will support farmers and crofters and evidence the cabinet secretary that our priority was providing stability to the sector citing both the direct cash injection of 650 million into the portfolio and also the expedited direct payments. In February, the committee will kick off its pre-legislative scrutiny of the agriculture bill. This legislation and associated policies will be vitally important for the future of the agricultural sector forming the framework by which we will support farmers to transition to a more sustainable model. This section of the budget has received a significant increase of 69.6% compared with last year. It comes from a doubling of the funding for the national test programme from 10 million to 20 million and an increase of 3 to 5.2 million for the delivery cost of the programme. Alongside the Agricultural Transformation Fund the Government says that this funding is intended to support the transformation of how farming and food production is supported in Scotland and for Scotland to become a global leader in sustainable and regenerative agriculture and to support the industry to achieve our statutory emissions targets. The national test programme and the Agricultural Transformation Fund are recent budget packages to support agricultural reform. Looking at the last few years the overall budget for these activities is still significantly below the original budget set out for the Agricultural Transformation Fund in February 2020. For the more uptake of soil tests and carbon audits have been lower than expected with only 12 claimants for carbon audits and 21 claims for soil samples as of December 2022. It is however expected that applications will reach a peak towards the closing date. The Cabinet Secretary also confirmed her ambition to expand the national test programme pointed to animal health and welfare measures that could be added to the programme. The committee scrutinised the national test programme as part of its pre-legislative scrutiny to ensure the programmes are delivering on the Scottish Government's ambition and importantly ensuring they are adequately supporting farmers. At the other end of the supply chain business development will see a significant decrease of 78.8% in the capital spend from £16 million to £3.4 million. That relates to the food processing monitoring co-operation scheme a scheme designed to support the development of food and drink services to businesses. Not running this financial year is where the savings comes from. According to the Scottish Government it is to allow a review to ensure the scheme addresses further sectorial challenges and better serves the needs of the industry. It is disappointing as the scheme appears to have been well received and post Covid has and would continue to support struggling businesses to recover. This is a budget line that we will continue to monitor over the future years. The committee would have liked to have seen the scheme maintained at least until the economic situation had stabilised. Marine Scotland has received an increase of £14 million or 14.7% in the budget to support commitment to net zero and biodiversity including initiatives like the Marine national plan designating highly protected marine areas and implementing policies from the fisheries management strategy such as remote electronic monitoring and patch policy. Marine Scotland stated that much of the increased budget relates to additional staffing and that search capability required to deliver a successful planning and consenting regime for offshore renewables and an increased focus on marine conservation activity. The committee discussed this uplift with the budget with the cabinet secretary and we raised concerns that this shift to offshore renewables could further contribute to the spatial squeeze in the marine environment. The cabinet secretary acknowledged potential impacts and committed to continually review operations. The committee will continue to monitor how progress has been made to balance commercial interests with wider conservation activities to ensure the equitable use of marine areas. We raised concerns about Marine Scotland's capability to cope with its increased responsibilities and encouraged the Scottish Government to undertake an assessment of its capacity to ensure compliance with anticipated expansion of marine environmental protection. Finally, turning to the islands, the committee scrutinised the implementation of the islands plan, specifically the associated islands programme funding taking evidence from local authorities and the Scottish Futures Trust. Local authorities painted a stark picture of the impact inflationary pressures we are having on island communities. Our Gail and Bute Council highlighted that travel and fuel costs are 30 per cent higher than those in urban UK areas. Those significantly higher costs make securing capital projects more challenging for island authorities. Although the committee is pleased that the Scottish Government is taking on board our comments regarding how funding can be improved in future years, it is disappointing that the Government decided to reduce the capital element in the island programme budget in real terms, particularly given inflationary pressures. The cabinet secretary acknowledged the constraints and highlighted the islands growth deal providing £50 million from the Scottish Government and £50 million from the UK Government over the next few years. Although the island growth deal is to be welcomed, local authorities tell us that they have a need for a greater degree of certainty about the funding they will receive so they can plan ahead, there is a particular element to capital projects which need a pipeline to give contractors certainty that projects will get the green light. When the committee wrote to the cabinet secretary, it appeared that there was a concerted move to reduce the capital element and the cabinet secretary confirmed that multi-annual funds were not possible due to the annual allocation process but did not commit to providing as much certainty as clarity as possible. Scrutiny will continue on how the island plan and programme funding can be improved to deliver for our island communities and I hope that in the coming years we will get the chance to visit some of the projects funded under the programme to see what impact they are having on the ground. Thank you very much Mr Carson I welcome the opportunity to speak on behalf of the social justice and social security committee in the finance and public administration committees' debate on the Scottish budget. During this budget cycle we have been acutely aware of the challenging economic circumstances in which the Scottish Government has prepared its budget. Notwithstanding this, the committee has been keen to ensure that budgetary decisions within its remit focus on protecting those on low incomes as they are the most affected by this cost of living crisis. That crucially includes the third sector which provides vital support to some of the most marginalised groups. To support that work the committee has also examined how the Scottish Government is taking a human rights approach to its budget decisions and what that means for achieving social justice and addressing inequality. The cost of living crisis has brought poverty and the right and adequate standard of living into sharp focus. The Scottish Human Rights Commission drew our attention to the need for poverty to be viewed in human rights terms and emphasised poverty represents a failure, a violation to fulfil the right to an adequate standard of living as is established in international human rights law. Other rights, like the right to education to work and decent working standards to health and adequate food and adequate housing are also affected by poverty. Poverty viewed through this lens is best viewed as a cluster of human rights violations in Scotland. As one of its four key priorities set out in the resource spending review the Scottish Government has prioritised tackling child poverty and we welcome the increase in the Scottish child payment to £25 per eligible child per week, which the Cabinet Secretary has indicated should reduce relative poverty to 1 per cent below the interim target of 18 per cent. Of course we will not know whether this is the case until statistics available in 2025 and the committee will therefore keep a watchful eye on progress throughout this session. With inflationary increases eroding the value of financial interventions we actively encourage other committees to keep challenging the Government to tackle child poverty through policies that lie within their remit. Social security is just one way to invest in people. The committee notes that in 2023-24 the Scottish Government needs to find £776 million above what it receives in social security block grant adjustments and this is more than double what is needed this financial year. According to the Scottish Fiscal Commission's recent forecast, this funding requirement is expected to continue to grow reaching £1.4 million by 27-28. How to address this gap and the impact of the cost of living crisis proved to be a little more controversial for the committee but we wait to hear the outcome of the review of the fiscal framework that will ease the pressure. Still, the fact remains rightly that social security is a demand-led budget and as such funding will need to be made available. It is therefore critical that we double down on preventative measures. We heard that for preventative policies to make a difference and to lead to sustainable and consistent improvements measures need to be funded over the longer term. We took evidence from the Deputy First Minister to discuss the £53 million in-year cut for the disability funding. The committee was concerned that this would slow progress on parental employment a preventative approach aimed at reducing child poverty. We recommended that the cut should be time-limited and asked the Scottish Government to provide a timescale in which it will be reinstated to the level of funding before the cut. In response, the Government has committed to reinstating funding for 2023-24. As I set out at the beginning of my speech, we have maintained that the issues experienced by the sector are long-running. The pandemic, swiftly followed by the cost of living crisis, has however seen the situation worsen to levels that were not encountered before. Voluntary organisations face increased costs, including among others, transport, supplier, material costs and rent. The most significant being energy and staffing costs. SCVO reminded us that the sector provides public services and they advised the organisations employ more than 135,000 people, which is 5 per cent of the Scottish workforce. The Poverty and Inequality Commission explained the impact on volunteers. They told us volunteers who were offering to drive to deliver packages and care support to people who can no longer afford the fuel. On the consequences of single-year funding on advice services, the Child Poverty Action Group said that short-term funding means that they cannot take someone on when they have done that, the funding will be over and the person will have had to leave. The Scottish Government has acknowledged the sector needs disability of funding and the opportunity for longer-term planning and development. The cabinet secretary advised us that the Government has adopted fairer funding practice and that it is committed to increasing multi-year funding with multi-year settlements being the default wherever possible. That is a welcome step forward. We will of course be following progress to see if this approach is having the desired impact on the sector as we are aware that other grant funders also need to deliver multi-year funding. Before I come to the end of my speaking time I would like to cover homelessness. Having a place to call home is an important aspect of an adequate standard of living. Following publication of the budget, Shelter Scotland raised concerns that funding for homelessness services had been frozen and that funding for delivery of new social homes had been cut, impacting on the Scottish Government's international obligations to progressive realisation of rights. We asked the cabinet secretary about this and she clarified that funding for the affordable housing programme remains at £3.5 billion. However, we recognise that that translates to a real-terms reduction from the previous budget. That, the cabinet secretary noted, is due to the impact of high inflation and a 3.4 per cent real-terms reduction in the UK Government capital allocation to the Scottish Government between 2022-23 and 2023-24. The cabinet secretary did however highlight that the Government was taking steps to mitigate the impact. On funding to eradicate homelessness the cabinet secretary hoped to have two clear purposes. Reducing the use of temporary accommodation and the prevention of homelessness would bring about a sharper focus and again we will continue to scrutinise progress in this area. In conclusion, we have used our scrutiny to ensure that the Scottish Government's budget takes account of low-income households and the impact of poverty and related preventative actions. We acknowledge that this coming year's budget is set against a very challenging fiscal context, not least because of the current cost of living crisis. It is essential in times like these that the budget works to maintain the right to an adequate standard of living for the people of Scotland. Thank you, Presiding Officer. Thank you. I call Edward Mountain to be followed by John Mason. Thank you very much, Presiding Officer. I'm pleased to give an overview of the Net Zero, Energy and Transport Committee's scrutiny of the 2023-24 budget. The main backdrop for this work has been the committee's inquiry into the role of local government and its cross sectorial partners in financing and delivering a Net Zero Scotland by 2045. That was the inquiry title, which is almost as long as the inquiry was. It started in November 2021 and touched on almost every aspect of the Net Zero delivery at local level. This made a very useful primer for our budget scrutiny this year. Our report came out on Monday and I do urge all members to have a read, at least of our executive summary, which is just two pages long, and get straight to the point. In it we say that Scotland will not meet its ambitious target of being Net Zero by 2045 without a more empowered local government sector. With better access to the skills and capital it will need to play a full role in this energy revolution. To be clear, this means that councils are going to need additional core resources to help meet the cost of transition. There will be a chance to debate this report, so I will move on from it now, but touch on three issues we highlighted in our pre-budget scrutiny. The first is public transport. There is a fair fairs review covering pricing for all main modes of public transport. Our budget letter expressed concerns that the review had a low profile and its timetabling and outcomes were unclear. We asked for more clarity on all this and also on what resources the Scottish Government anticipated setting aside at the end of the review to help achieve the significant modal shift away from car use that we all want to see. It's fair to say that the Cabinet Secretary was, as a response, was perhaps clearer on the first point than the second. We sought to tease out the discussion further in a public session with the Cabinet Secretary last week, and this was helpful to have clarification that the pilot scheme to be run under the review to remove peak fares on trains will only apply in some services but not nationally. The Cabinet Secretary reminded us that it is buses not trains that are far the most widely used to public transport. The sector has been struggling especially since the Covid pandemic. The committee acknowledged the resource that the Scottish Government has put behind the sector to help it to see out these difficult times. We want to be assured that there are policies in place that will ensure that the sector not only survives but thrives in the longer terms. Not least because we're going to need a strong bus sector to help us decarbonise public transport. Sorry, transport. Whether we are there yet is not clear. For instance, councils are still clearly somewhere away from making use of their new power to run local bus services. I'm sure that this is something the committee will want to keep an eye on over the rest of the parliamentary session. Beside the local government inquiry, the other main evidential source for our pre-budgets scrutiny was the committee's snapshot inquiry in late spring last year on energy price rises. At the time, the outlook looked very bleak indeed with truly frightening forecasts being made of all of Bill's householders would have to pay by the end of the year. If matters seem just a little bleak, less bleak now, I hope that this is due to impart the call by the committee and that others were making last year for a clear and decisive confidence-restoring intervention by government, principally the UK Government, but the Scottish Government also had an important role to play to. One area that is largely devolved is home insulation and our pre-budget correspondence we set out a disappointment at the apparent lack of urgency in escalating retrofitting and insulation programmes in response to the fuel crisis. The underlying issue here is overall heat in building strategy and how to play for it. An issue again touched on in our local government inquiry and one I suggest that the Parliament will need to return to in greater depth during this parliamentary session. Finally, and very briefly, I'd like to draw the Parliament's attention to the committee's work in seeking to commit the Scottish Government to greater transparency on the carbon footprint of the national budget so that we, as parliamentarians, can make a more informed decision at this time each year. There is no doubt that this is tricky and technical work but to paraphrase John F. Kennedy when he announced the Apollo mission, we do this not because it is easy, but because it is easy or rather, we ask the Scottish Government to do it. To their credit, they have undertaken to do so albeit rather guardedly and I will give an undertaking on behalf of the committee to hold them to this commitment over the courses for this session and ensure that progress is made in this really important area. Thank you, Presiding Officer. I call John Mason to be followed by Liz Smith. Thank you very much, Presiding Officer, and being on the finance committee, we obviously do have quite a focus on the budget for a fair part of the year and at the risk of repeating myself from previous years, the Scottish budget has to be as fair as we can make it and it has to meet as many needs as we possibly can but it also has to be affordable and so it can never meet every need as we would ideally like. In the first place, I very much welcome the effort to increase our resources so that we have more to spend on vital public services like the NHS and local government. I welcome the income tax increases adding just one pence to the 41 pence and 46 pence rates. The UK tax system is far too complex and inconsistent. As long as national insurance remains separate and regressive and as long as income tax, corporation tax and capital gains tax are not more closely aligned with each other, we will get inconsistencies and artificial behaviour to avoid tax like people who are really employees but become companies in order to pay less tax. As Deputy First Minister said at committee on 10 January, such behaviour may be legal but it is also quote morally wrong unquote. As people living in Scotland benefit from things like no university tuition fees and better early learning and childcare so we should be paying more tax for these advantages. Most people do not choose which country to live in based on the lowest tax they look at overall quality of life they want a sense of community and obviously they want to be close to family and friends. While income tax is fairly progressive and that is welcome our property taxes are not so progressive and this point was made by Professor Anton Muscatelli and the expert panel. I do welcome the increase in additional dwelling supplement from 4 per cent to 6 per cent it is only a 2 per cent change but can help to swing the balance towards first time buyers and away from second home owners and those buying to rent. This has to be a good thing. I for one bought my flat when I was younger and many did so at that time on fairly ordinary wages and salaries but it has become increasingly hard for younger people to purchase and we need to do what we can to help them. It is probably worth saying at this point that the committee had a very useful day conference with the RSE on taxation in Scotland in November. There have also been good papers on taxation from the IPPR and others and I strongly believe that we need to get the general public more involved in discussing tax and where we as a nation want to be going. Do we want lower taxes and to see public services decline or do we want high quality public services with higher taxes to pay for them? On the bigger picture side of things we should mention the fiscal framework. I very much welcome the fact that it is being reviewed. I know that we signed up to it fairly voluntarily however it does seem to me that it is fundamentally biased against Scotland. We cannot really compete with London, the south-east of England so we are going to keep losing out unless the framework is changed. Finally coming to the corporate body budget I was very concerned to see that the proposal for the commissioners and the ombudsman is an 8.1% increase. On top of that we heard that there are calls for the number of commissioners to increase to 14. I think we need to remember that this is money being taken away from actual services. Every pound for the commissioners is one pound less for front-line services. Lastly concerning MSPs getting a pay increase of 1.5% I think that this is reasonable in the circumstances and I personally very much welcome it. Overall we would all like to do more than this budget can do however our room for manoeuvre is limited and I think that there is a very reasonable and realistic budget in the circumstances and should be supported. Thank you. I call Liz Smith to be followed by Michelle Tompton. I'm not hearing it. You've got your microphone on Douglas. Douglas is it's on. Liz they've got Douglas is on by his state now. I think we're on now. Can I welcome the budget report and can I also thank our clerks and our special adviser and can I also thank the convener for his level-headed approach at least most of the time on the task in hand. It is an important one not just because budgets are always important but because this one is set against some very difficult circumstances much more than usual. We'll see us all take our party political stances on the budget but for today's debate I think it's much more about the main issues that have been raised during our evidence sessions and central to that is obviously the ambition to raise increasing amounts of revenue but also at the same time to improve productivity in Scotland the tax take and to address the issues about the working population level set against the total population and of course that means policies which will encourage more people back into the labour force following the pandemic and addressing the very large number of people who've actually never worked at all. That raises questions about what are and most importantly about what should be public expectations of the state and I'm sure Mr Swinney will agree that the Scottish Government can't be expected to do everything. I think we should note at this point that it is the perceived wisdom of so many economic commentators and of key business groups such as the CBI in Scotland that we are in desperate need of more highly paid jobs. It was a point raised yesterday's event with the Scottish Fiscal Commission. Scotland is far too prone to low capacity on economic growth and as we heard yesterday there are serious future issues relating to this and with that concern about economic growth I think it raises some of the tensions. A couple of conveners actually mentioned this about how we strive to find a balance between our commitments on the green economy with also ensuring that traditional industry is able to perform in a way that can provide enough high salaries but it also raises questions about what policies will best encourage investment in our better industries in terms of the future of financial services and renewables in energy and high tech manufacturing those are the areas which I think are very much in the running to produce some of these high paid jobs and another issue that's been very much talked about at committee is that of behavioural change on the back of the estimates that are being provided to us and my colleague Michelle Thompson is quite right, has raised this several times at the committee that behavioural changes are very important to what's going to happen with economic policy and the committee has been asking about how we can measure some of these behavioural changes for example there is this question I think John Mason referred to this about the additional dwelling supplement they increase from 4 to 6 now that's obviously an area that can produce extra and particularly protecting first-time buyers which is the intention of the Scottish Government but it is an area where the behavioural change is causing other issues so I think the scrutiny of this budget has raised quite a lot of issues about that behavioural change the convener has rightly expressed our concerns about the timescales for public sector reform and the lack of detail that we had received on what previously had been announced by the Scottish Government it's very important that we do get some clarity on that and Kenny Gibson is quite right to say that that is a major issue because it impacts so heavily on the Scottish budget and I think it's interesting to note alongside that we've had comment from a few stakeholders about trying to extend the principle of three-year budget so that there is a bit more certainty when it comes to planning ahead because I think many of our stakeholders want that extra ability so that there is a bit more certainty about how they might be able to spend their money on my very last line can I once again pay tribute to all the stakeholders who have given us that input on our scrutiny and to the convener and I look forward to hearing other speeches thank you I call Michelle Thompson to be followed by Ross Greer thank you it's a pleasure to follow my colleague on the finance public administration committee and in dear to hear the contributions from everyone here today it's really rather refreshing to hear some light rather than just heat many very valuable observations are reported have already been made so I'll simply make a few additional observations one of my biggest concerns is the flat capital budget the Scottish fiscal commission points out that this is a cut in real terms of £185 million due to a lack of UK Government funding and the impact on inflation yet I emphasise again that capital funding is vital to invest in long-term infrastructure improvements and research and development spending now typically Governments will borrow to invest yet in this matter the Scottish Government has significant restrictions where the UK Government has none and this unbalanced evolution provides full powers to cut spending but vastly inadequate powers to borrow to invest one area I would like to raise is regarding the data we have on the Scottish economy in some areas such as inflation we are entirely relying on ONS data for the UK yet in terms of understanding our economy we also have inadequate data on the differential impacts of policy by gender an issue the Deputy First Minister knows I continue to pursue with some vigour in other words if we are as the committee has rightly called for strategic and long-term financial planning it would be purposeful to have all the data needed to do so therefore rather than focusing on measures which serve no specific policy making purpose such as GERS I would welcome focus on identifying areas such as the Scottish inflation rate and how our economy serves both women as well as men there are other areas that could benefit from additional focus for example in giving evidence to the committee Professor Sir Anton Muscatelli pressed the case for serious thought to be given to ensuring that growth results in an increased tax take and one aspect of spurring growth is to do more to encourage entrepreneurship and in that regard do much more to support women entrepreneurs who face structural barriers with that in mind I look forward with interest to the forthcoming report by Anna Stewart and the tangible government actions that I hope will arise one final point was last week at Glasgow University's Adam Smith event in Parliament the Deputy First Minister talked of the importance of empathy understanding the concerns of others Smith also wrote of the importance of the rule of law now none of these are served by the extent of corruption in the UK where each year hundreds of billions of pounds in criminal assets are allowed to be laundered through the city of London vastly more than the entire annual budget of the Scottish Government formal chancellor Nadim Zahawi has been exposed yet again with more revelations today about his tax affairs and the threat and use of abusive lawsuits to silence Dan Needle even worse now thanks to open democracy we know the treasury under Rishi Sunak helped Putin's pregosin when supposedly under sanctions to mount a legal, targeted attack on a London journalist there is a financial cost to corruption and a lack of ethics it doesn't just remove money from our GDP but ultimately results in less doctors, less teachers less nurses and presents a risk to Scotland's global brand for poverty thank you I call Ross Greer to be followed by Douglas Lomstone thank you Presiding Officer as others have said this is by far the most difficult context in which the Scottish Government has had to set an annual budget at this point last year inflation was running at around 2% and the UK Government had cut the Scottish block grant by just over 5% in real terms and we were rightly describing that budget as the most challenging yet in the devolution era that feels like the good old days compared to what has transpired in the months since fair pay for public sector workers is now one of the biggest challenges the Scottish Government faces to be absolutely clear the Scottish Greens believe that all workers in the public, private and third sector deserve pay rises at least in line with inflation rising above 10% a real terms budget cut from the UK Government and an extremely limited set of tax powers it is just impossible for the Scottish Government to deliver that level of pay increase without paying for it with devastating service cuts and job losses it would cost around £2.5 billion that is more than twice what had to be cut in last autumn's emergency budget review I think I'm safe in saying that the Scottish Greens have the most radical tax policies in this Parliament but even our proposals for existing tax powers wouldn't raise close to the amount of money required the Scottish Government has made painful decisions to fund the ffadest possible pay offer to public sector workers both to reallocate within this year's budget and in this draft budget for 23.4 but until this Parliament has the financial powers of a normal country the only way to fund fair pay without catastrophic cuts to services is for the UK Government to either deliver pay awards to public sector workers in England which are adequate enough to generate consequential funding for Scotland or for them to give the Scottish Government funding to make up for the damage caused by inflation in year the finance committee wants to see more forward planning from the Scottish Government public sector pay is an example of where some of us have sympathy for the challenges that they face though it's certainly not ideal for the budget to have been published without an accompanying public sector pay policy document it's understandable when current pay disputes haven't yet been settled respecting the right of unions to negotiate and demand as they see fit to me this presents a strong case for multi-year pay settlements to become the norm for the purpose of forward planning the relationship between tax and spend has always been a challenging one perfectly understandable plenty of organisations engage with the budget process to demand additional funding for themselves for their priorities or their sector but very very few groups propose where that money could come from so I have to commend Unison for their submission to our pre-budget scrutiny which included a range of proposed savings and tax changes I agreed with most but not all of them and some are long term reforms which couldn't be delivered in the next couple of years but it was a credible set of progressive proposals which absolutely helped to shape the debate on tax policy last autumn I hope the Government will respond positively to the committee's encouragement that they revisit the previously proposed national discussion on tax the public deserve a high quality of debate around how public money is raised and spent but as the convener noted we're locked into an annual pattern of every sector just demanding more money a bidding war which grossly oversimplifies how our public finances actually work worse than that it makes it impossible for members of the public to distinguish between deliberate political choices which they have a right to critique and those which are the inevitable result of external factors or the limited powers to us Significant contributions are being made to this wider debate such as the STUC's tax paper published shortly before the budget that STUC paper is relevant to the committee's other major conclusion on tax reform around council tax which doesn't align with the aim of a progressive tax system nor does it give councils the flexibilities of the financial resources they need it is a bit comical for a tax system to be based on valuations from 1992 two years before I was born and I'm in my second term here the Scottish Government and the Greens have a shared commitment to change the council tax I look forward to seeing progress towards this during the coming financial year I'm looking forward to what I'm sure will be a more robust and ideological debate next week but I'm glad that we have this opportunity ahead of that to discuss issues of process and substance for which a broad consensus can be achieved Thank you I call Dr Slamstin to be followed by Colin Beattie Thank you, Presiding Officer As a committee we heard much evidence of issues on the budget both for this year and for future years and I would also like to take this opportunity to thank them for their time in considering these complicated issues and to the clerks for somehow distilling our conversations into the excellent report we are debating today The report does flag many areas of concern that the Government need to address in the coming months but let's start with a positive The Scottish Fiscal Commission have advised that the resource funding in the Scottish budget is set to increase by 1.7 billion which equates to £279 million in real terms the largest core resource block grant ever but that, Presiding Officer, is about where the positive news ends these are certainly challenging times and we still have many uncertainties that are highlighted by this report we have a devolved Government who even at this late point of financial year 2223 has no real certainty on how this year's budget will be balanced and the impact that that will have on the 2324 budget and when the resource spending review was published in May 2022 we had been told that the public service reform was key to providing a balanced budget going forward we were told that digitisation was key, public sector innovation was key, reform of public sector estate was key and improving public procurement was key but nine months on we are still no clearer when these reforms will be delivered what they will mean for our public services and the impact on our finances if they are not carried out we knew they meant job reduction to pre-pandemic levels and if we exclude health from the head count reduction then we can all guess where the axe will fall and yet again the easy target for this Government local government is under increasing pressure with this budget and I understand that the finance directors of all 32 local authorities have written to the finance secretary outlining their concerns and I often ask the deputy first minister at committee about the government's commitment to early intervention and prevention and to be fair I always get warm words back saying that it's absolutely key but once again when I look at this budget I see no evidence of that more and more of local government funding is ring-fen so when it comes to cuts it will be our sports grounds that are cut adding to obesity and a greater health bill in future years it will be community centres closed leading to social isolation and poorer mental health it will be cuts to education leading to widening attainment gap and it will be social programmes cut in the future the short termism is a theme that runs through the committee report particularly when it comes to building growth and productivity in Scotland Dr Mike Brewer in his evidence of the committee described the budget as being predominantly focused on dealing with short term challenges that are posed by the rising cost of energy and food Professor Muscatelli also stated later in the report that the national strategic economic transformation must be pursued with vigor because it aimed at genuinely lifting business investment and productivity and I'm concerned at the lack of focus on growth in this year's budget and that short termism that is at its heart Presiding Officer in previous debates on the budget I've said that you can tell a government's priorities by what they commit finance to in this budget we can only see real terms cuts education and skills budget cuts rail fares and island budget cuts enterprise budget cuts, please Scotland budget cuts this is a short term budget from a short term finance secretary for what hopefully is a government with a short term future Thank you I call on Colin Beattie the final speaker in the open debate Thank you Presiding Officer I welcome the opportunity to contribute to this debate as chair of the Scottish Commission for Public Audit The SCPA's main role is to scrutinise the budget proposals from Audit Scotland and its accounts Last Friday we published our report on Audit Scotland's budget proposal for 2324 unusually for the SCPA we did not make a recommendation that the Parliament approve the total budget Audit Scotland describes itself and its role as providing politicians, decision makers and the public with assurance and information about how public money is spent and this is more important than ever at a time when public spending has risen sharply in response to the pressures and public services but in the case of Audit Scotland who audits the auditors, who provides that scrutiny and assurance about how the public money allocated to Audit Scotland is being spent and this is why the SCPA was established under the Public Finance and Accountability Scotland Act of 2000 the SCPA provides that scrutiny of Audit Scotland and in turn reports its conclusions to the Parliament By Audit Scotland we mean the agency provides the Auditor General for Scotland and also the accounts commission with the services required to carry out their respective duties its budget comes from two sources fees that it charges to audited bodies and funding that comes from the Scottish Consolidated Fund is approved by the Parliament the SCPA met in December to consider the Audit Scotland budget proposals specifically the 12 million and 50 thousand of Parliament approved funding this represented an increase in 163 thousand from the previous year and that figure could be broken down and attributed to six different factors but I'll focus in just a few looking at the increase in fees and expenses paid to external audit firms who undertake work on behalf of Audit Scotland the SCPA was keen to understand more about what was driving up costs the budget proposal states that these fees will increase by 56% in 2324 equating to 2.55 million and after receiving further evidence the SCPA noted that the previous fees were unsustainable noted that the increase in regulations around auditing and that the fees were consistent with the costing and benchmarking exercise in relation to fees charged to audited bodies we sought an explanation for the variation across sectors and fee uplifts in particular in relation to the further education section where the average fee increase is 57.5% Audit Scotland explained in evidence that the fees that charges audit bodies are informed by the outcome of the procurement process to appoint external audit firms and the increase in fees is most acute in the further education sector due to the size of the organisations and the baseline costs required to deliver an audit compliant with the code of audit practice the SCPA was content with the rationale and explanations for most of the proposed increases in funding where we had difficulty was an understanding the rationale for a proposed £278,000 increase in support for the Accounts Commission the commission's function is to hold councils and other local government bodies in Scotland to account the commission is supporting its work by staff of Audit Scotland we noted that the accounts commission had already created and was about to fill a full time role for a controller of audit the commission also said it required more staff for analytical work, stakeholder engagement and providing a refreshed website the SCPA was keen to understand the drivers and assessments for the new posts and for the associated work it was explained to us that the accounts commission felt that it should be making more impact and have decided to initiate a change programme after hearing evidence and also requesting additional information we still found ourselves in a position of not being able to reconcile the ask for budget of £278,000 with the need for that budget we needed more substantive detail about the assessments for this work and its budget and did not feel the case had been made we came to this position against the backdrop of the current economic outlook cost living crisis and the difficult choices being made in the Scottish budget and in seeking the most efficient outcomes in terms of public spending this is a very unusual position for the SCPA to find itself in we are required to examine the proposals from Audit Scotland and to report to the Parliament on them in previous occasions we have recommended approval of the proposals to the Parliament as part of this budget we would simply draw the attention of the Parliament to our concerns around what we see as insufficient detail in relation to part of these proposals thank you I now call on John Swinney to wind up up to 8 minutes cabinet secretary thank you, Presiding Officer I want to reflect on Mr Beattie's point which I think is an important point it's not one that I can say very much about because this is a parliamentary matter but I think the unusual contribution but the unusual subject matter that Mr Beattie's had to raise is something that Parliament needs to reflect on it's not a matter for the Government but it's a matter for Parliament which I think it needs to take very seriously indeed of course Daniel Johnson there is a technical aspect which is that the Auditor General reports to Parliament the Audit Commission reports to Governments there is actually a dual role in place here just on that technical point cabinet secretary I'm seeking not to get hung up on that technical point and I'm saying it's quite Mr Johnson will understand it's a rather invidious position for me to be commenting about the auditors but I think it needs to take seriously what Mr Beattie has put on the record and which the SPCA has put on the record as well Liz Smith made the most revealing comment of the whole debate in which she said that today is the debate that we look at the substance and the scrutiny and the evidence and next week we get into the party politics so forgive me if I pay slightly more attention to what some colleagues say today that I will pay next week as a little warning Mr Mason gave some pretty sobering warnings as he does regularly to Parliament about the importance of the hard choices that are involved in the budget process but also in the reconciliation of difficult questions about tax and I welcome his support for the tax stands that I've taken but Mr Mason's speech was followed by Douglas Lumsden who made a strong argument for more funding for local government but didn't offer a single scrap of evidence as to where that money was to come from and I think that it just passes the usual test from the Conservatives of empty rhetoric on some of these questions Mr Greer in his contribution recognised the importance of the budget making provision that we've had to do by adaptation and amendment in this financial year for the challenge of public sector pay and in relation to the concerns which I hear from members of Parliament about the fact that the Government has not yet in a position to confidently set out its route to balance in this financial year that is not for the want of trying and it's also a measure of the scale of the difficulty and the challenge that the climate of surging inflation represents for us There are three principal themes to the Government's budget and I want to reflect on each of those in responding to contributions first of all in relation to the attack on child poverty Michelle Thompson made an important comment reflecting on the Adam Smith legacy event that it was important to have empathy for others to essentially walk in the shoes of others and if anyone needed to understand that that was exactly done made to the debate this afternoon in powerfully setting out the arguments put forward by the Social Justice and Social Security Committee and the emphasis on the sustained measures on tackling child poverty was an important example of that empathy and the importance of understanding the challenges which the committee her committee has done which is to focus on the position of low income households and the work that Claire Baker made about the importance of sustained investment on employability and I'm glad that we've been able to improve the resources that are available on employability in the next year's budget despite the interim cuts I've had to make this year on the theme of net zero Edward Mountain set out some of the challenges that are inherent but the necessity of making those commitments as did Finlay Carson on the journey towards net zero and the Government believes that we've put in place particularly in relation to capital expenditure the type of support that is necessary in this respect The third principle theme of the budget is around sustainable public services and Gillian Martin reflected on behalf of the health and social care committee on the importance of the budget settlement for the health service and the investment in social care Audrey Nicholl on behalf of the criminal justice committee reflected on the difference in the budget settlement compared to the resource spending review and the fact that the Government has listened carefully to the challenges to ensure that we properly invest in the criminal justice system and meet its challenges and Arianne Burgess in relation to the local government settlement made clear the importance of the investment that we have made and to ensure that that is sustained in the period to come There's a couple of other contributions I wanted to reflect on just in conclusion One is the point made by Siobhan Brown in relation to the Covid recovery activity and I do want to reassure Parliament and the Covid recovery committee as I did last week of the importance we attached to mainstreaming the thinking behind the Covid recovery strategy into the Government's programmes and the budget has been to do exactly that Lastly, Clare Adamson made a very powerful point about the very briefly Edward Maitland sorry I tried to catch you just before you came to your last point Ms Swinney My question one of the questions that the committee was very keen on finding out is the cost as far as the carbon cost for all the decisions we're making compared to re-iterate the agreement that this will be something that the Government will work to as far as getting to next year the actual cost of the carbon of the decisions on the money that we're spending Tell me things I think I might have to pursue that discussion with Mr Mountain in due course because my feeling would be that what we publish in relation to the carbon assessment should fit his requirements but I'm very happy to explore that further to ensure because I think that issue has to be resolved I think we're doing enough in that respect but I'll happily explore that further Clare Adamson made a really important point which is about the disproportionate relationship between the amount of money spent on cultural investment and the impact it has on our society and our wellbeing If I didn't know that point already I wouldn't have been listening to Fiona Hyslop who for many many years is the longest serving culture secretary in this Parliament used to beat me into submission on budget agreements on that very argument and point to which I pay warm tribute but it is a really important point and I want to assure Parliament of the sympathy I have with that point and the fact that I want to make sure we do all that we can to support investment in our cultural sector and in those tough times that we're living in people need to enjoy and appreciate the importance of cultural investment to make us who we are as a society Thank you very much I now call on Daniel Johnson to wind up the debate for up to nine minutes Mr Johnson Thank you very much I'm very pleased to be closing this afternoon's debate on pre-budget scrutiny on behalf of the Finance and Public Administration Committee I think it has been an excellent debate and I think it's actually a really important opportunity for us all to tie together our various committees' work and collectively focus on the priorities which undoubtedly are seen through the budget I'd also like to pay tribute to the clerks as one thing that I think we can all agree from Douglas Lumsden's contribution they do an excellent job of weaving together the multiple different lines of questioning something that looks far more coherent and robust than perhaps the raw material might suggest but I'd also like to thank my committee members because I think and as you heard in the contributions we may come from different perspectives I think we actually have a very shared approach which I think we heard in the contributions today but that's about actually the implementation of tax policy ensuring that it is both fair, robust and progressive that we heard from John Mason looking at actually how money is spent and the impact of that spending which I think we heard from both the convener and Michelle Thomson in terms of her contribution on data I think one of the key focuses of this committee especially bearing in mind our Public Administration Committee is the clarity that we need not to have clear strategies and plans as a framework to marshal that spending and perhaps the most important point both in an on-going basis but in the debate this afternoon is the shared view that we have to have a goal of increasing prosperity in Scotland and that ultimately that has to be one of the fundamental purpose of government that we see through the budget I'd also just like to briefly point out that one of the more obscure points that we do cover off in part of our strategy is scrutinising the SPCB budget and there's been a number of issues that we have looked at both this year and last on the effect of spending but also issues looking at the costs that are attributed to the Parliament and that is an important function scrutinising the parliamentary accounts and budget proposal that our committee undertakes Would the member take an intervention on that? Of course. I'm grateful to the deputy convener for taking an intervention on the point of the SPCB budget I wonder if he has any thoughts particularly around the staff cost provision provided to MSPs relative to the wider staffing budget for the year ahead Daniel Johnson I thank the member for making that contribution I think that it raises an important point both I think the point that the committee did look at which is that the cost of inflation is well ahead of the pay settlements that are being offered across the public sector but that also is true of the Parliament I am concerned about the difference between the settlement for parliamentary staff and perhaps members staff I wonder if that might be something that we look at as a committee as part of our scrutiny in future years and perhaps also maybe think about taking contributions from staff representatives and trade unions as part of that scrutiny I hope that that covers the point that the member raises I'd like to thank members from various committees for their contributions and I think there were overarching themes looking at the squeeze in the public finances and the choices that leads to and I too would like to highlight and clear Adamson's contribution because I think it I think covered those points comprehensively I think she highlighted very well I think the very real hardship and the very real difficult decisions that cultural bodies are having to face as a result of the current context I think that this was a point also highlighted by others such as Ariana Burgess as relevant to the housing budget and indeed also the fact that this is an issue that is facing private sector employers through the decisions that the Government are making in terms of the levees that are being applied to them this is undoubtedly a difficult time but she also highlighted on the need for innovation to approach this and I think that that may be a light so maybe the points that Mr Mason raises about having to have balance we will need innovation that will need to be looked at carefully and I would urge committee members to consider the substance of that because I think while we all agree we need alternative approaches that I think until we get into the detail that that becomes difficult in practice but I think that's undoubtedly true I think there were two particular points in terms of the approach which are a particular point and were ones that were covered off in the committee's deliberations one was about looking at cross portfolio impacts and preventative spend I thought that was a point covered off excellently by both Siobhan Brown and Don that if we're going to tackle poverty it has to be done on a cross portfolio basis but as Clare Adamson pointed out we need to look at the wider impacts of the spend such as cultural spend and that is really hugely important which is why the committee spent so much time looking at the national performance framework in its work because earlier this year we published findings of our enquiry into the national performance framework and in that and earlier reports we have recommended that there needs to be a clearer link between spending decisions in the budget and their impact on the delivery on those national outcomes and we again repeated this recommendation in a report that we published this week and I think at times of fiscal constraint it can be tempting to look or discard frameworks and plans such as these but I actually think it's in those times that plans and frameworks such as the national performance framework become ever more important so that we prioritise spending on the areas that will have the most impact and I thought that was brought to life by members very well I mean likewise I think Clare Adamson and others brought to light the importance of multi-year financing and having clear patterns of funding this was a point that we highlighted in our report on the budget saying to the Scottish Government that it is challenging to identify in a meaningful world the individual annual impact of multiple budget lines on the delivery of longer-term complex national outcomes it is instead developing an approach centred around multi-year programs and associated outcomes and the annual spend profiles attached but we're unclear precisely what this will involve and therefore we sought more detailed information but it is clear from members' contribution that this is very important and I would just touch on Sue Weber's contribution because again the committee undertook work into the financial memorandum on delivering the 1140 hours and I think there we see clear evidence about why you need that multi-year approach clear patterns with a framework because otherwise it may lead to outcomes that may be contrary to the intended I think the reduction in the number of settings especially in the PVR sector is something that we should note in concern and I think it serves as an example of why you need robust multi-year funding and clear funding formulas so I would also just like to highlight on Gillian Martin's contribution because I thought her remarks about the health budget were particularly important and bringing some of these things together but also actually that while there may be very clear issues that the health budget is facing and I think we're all aware of those funding and innovation to be found and I thought her points around data the need for more robust monitoring and evaluation is absolutely critical if we're going to use our budget in innovative ways to deliver more in what is certainly uncertain times and I thought that also tied in very well with what Michelle Thompson said in her contributions so in the remaining time I've got left I'd just like to note that we also made comments both about net zero and climate change and the need for greater clarity our work will be on-going in terms of looking at the work that we improve our efforts on carbon budgeting and I think that also touches on points that Edward Mountain raised capital spending remains important we welcome the Government's commitment to bringing forward clarity in terms of cofog that may be a bit of a niche point for other members but it's very important in terms of transparency but I would also just finally like to touch on the proposals for the national care service given the interest that the finance and public administration committee and many other committees represented here today will have in this the Scottish budget 2324 does not specify what level of spend has been incorporated into the relevant budget line for the establishment of this new service we therefore found it difficult to determine whether the amount allocated in next year's budget reflects the figures in the related bills financial memorandum of between £60 million and £90 million so we welcome the Deputy First Minister's commitment to bring forward a revised financial memorandum but we do express our concerns about that lack of clarity within the budget so in conclusion I'd like to close by thanking all members for their contributions today I look forward to next week's debate which may have a somewhat different tenor in tone at stage 1 of the budget and we will hear more about the Scottish Government's plans to that. Thank you Deputy Presiding Officer