 Good morning and welcome to the second meeting in 2023 of the Local Government, Housing and Planning Committee. I remind all members and witnesses to ensure that their devices are on silent and that all other notifications are turned off during the meeting. The first item on our agenda today is to decide whether to take items 4, 5 and 6 in private. Our members agreed. We are all agreed. We now turn to agenda item 2, which is to take evidence from the Minister for Environment and Land Reform on our post legislative scrutiny of part 9 of the Communities Empowerment Act 2015. Last year, we undertook an inquiry and published a report on part 9 of the 2015 act. The Scottish Government has responded to that report and this is our chance to explore that response further. We are joined today by Mary McCallan, Minister for Environment and Land Reform from the Scottish Government. Ms McCallan is accompanied in person today by James Hamilton, who is the branch head at food and drink trade, the Scottish Government legal directorate and Tracy McConlon, who is the head of the Good Food Nation team at the Scottish Government. Online is joined by Simon Bonsol, who is the senior planner, planning, architecture and regeneration division at the Scottish Government. I warmly welcome our witnesses to the meeting and invite the minister to make a short opening statement. Thank you very much, convener, and thank you for inviting myself and my colleagues today. Thanks also for your time and for the committee's time in looking at this important matter. I very much welcome the work that your committee has done and the recommendations that you have produced, and I take them all on board. I say that because local growing is very important to the Scottish Government. I think that the 2015 act itself, part nine, demonstrates the importance that we place on allotments as part of that wider picture of community growing. I mention the wider picture because I'm glad that your investigation looked both at allotments but also the non-statutory growing environment. I'm absolutely committed and convinced of the multiple benefits of community growing. You set out a number of those in your report, physical and mental health, social cohesion, biodiversity, reducing carbon footprint and tackling loneliness and isolation. You put it ageing well or ageing healthily, which I think was really important. I believe in those co-benefits and I also believe that they should be something that everyone in Scotland can access. I think that a lot of what the work that we're doing here will help us to progress that. However, we have been living through a recent period of disruption in many ways. I think that that has only served to make those co-benefits much more important. We know that people turned to their natural environment as they took solace in some of the darkest days of the pandemic and equally as we were able to unlock, people saw that cohesion and the coming together after the separation of lockdown. Of course, that disruption has also created a period of difficulty for governance and implementation and delivery, both locally and nationally. I think that when partnering was passed, none of us could have foreseen the events that would follow. I want to make two final points on that issue of delivery. First, it is that the Scottish Government clearly has responsibilities under part nine of the act. Those have been fulfilled by the letter of the legislation. The vast majority of the responsibilities lie with local authorities, who I believe are best placed to make decisions based on their local demography, geography, resource. I want the Scottish Government to be a helpful broker of progress on that, but I do not want to impinge on local decision making. The second point on delivery is a practical one. I just want to flag and we cannot escape the very difficult financial restrictions that local and national government are facing just now. I hope that, despite that, with the good work of the committee that I want to take on board and take away, I hope that we can make progress in the months and years to come. Thank you very much for that, Mary. Having been involved in community growing for many, many years, both here and in Scotland, but also in New York City, I am sure that, where there is a will, there is a way, and if the opportunities are made clearer for people, both through Government leadership but also through the local authority leadership, I think that we will find that opportunity for those co-benefits that you have outlined. I am going to open with questions now. Thinking about the broad impact of part 9 of the bill, do you feel that there is adequate data available to say whether or not the legislation has been a success? If so, what impact do you think part 9 of the act has had over its five years of implementation? Obviously, you have identified the co-benefits and things like that, but just to hear a bit more from you. First of all, on the impact, there is no doubt that there are individual examples, a substantial number of individual examples where the act has had a positive impact, not just through what the act itself has allowed local authorities to do and communities to benefit from, but equally we need to accept that there is a signalling effect to a Government creating primary legislation which makes these obligations and rights and responsibilities very clear. However, some years down the line, we cannot be blind to the fact that there are some ways in which things don't appear to have worked as we had expected. Waiting lists are long and they are growing. Availability of land, as you have identified, remains a problem. I know that the community sees that the disparity of experience remains a problem. On that latter point, I think that yes, that could be, but equally I am mindful of the needs to recognise the different experiences in different local authorities across the country. We will all come from different parts of the country where we will see different needs and we need to remember that local authorities are dealing with different situations. Your first point was about data gathering. The act does not place duties on the Scottish Government to collect data or to benchmark that data. I am open-minded to the idea that that could be explored and I think that you had suggested that the annual allotment reports might be a suitable place to do that and I will consider whether that is doable and what the benefits of that would be to local authorities and to the Scottish Government. That is really helpful that you are open to consider some form of collecting data and benchmarking it. Moving on to local authorities and provisioning, there is clearly a huge unmet demand for allotments across local authorities. What can the Scottish Government do if councils fail to meet their statutory duties in terms of provision, waiting lists and food-growing strategies? Why do you think that some councils are fulfilling these duties and others aren't? Is there more adequate resourcing required to support local authorities to do so? Again, just to take the last point first, local authorities are facing different situations. Something as basic as having a geography which allows more people to have their own gardens is going to make a difference as compared with an urban local authority dealing with fewer instances of that. There is certainly dealing with different local circumstances and different demand and the need to make resource decisions about that and where to place funding as part of the block grant. Very cut and dry, ultimately, if statutory duties are not met by a local authority, in theory it is possible to bring legal proceedings to be lodged against that local authority. I say that only as a matter of fact. That is not something that the Scottish Government would want to pursue. We should far rather work with local authorities, with COSLEF, to work out constructively how we make progress together. I think that there are a number of ways that we can do that, continuing with the tripartite group, considering whether additional guidance would be helpful. I am conscious that we produced guidance on food-growing strategies but have not done similarly on allotment reports. I think that I can accept that that might be a reason why there have been difficulties there. We talked about considering benchmarking data and also things like easing regulation on permitted development rights. Those are all tools that the Scottish Government has, but ultimately there is a legal power to bring proceedings, although we do not want to go there. I think that what you are pointing out there with the additional guidance could be good and that is something that we talked about in the report, is the need for some leadership. I am certainly aware that I can imagine when a local authority is busy doing the work that it needs to do and then it needs to take something new on. How do you start to get into that new workstream and guidance can always help ease the way? I would like to focus on the role of the coming Scottish Food Commission. In the Government response to the committee's report, it notes the links between the local good food nation plans and the food-growing strategies. Those are there for the local authorities to determine. Given our very welcome move towards more sustainable locally-grown food, I am keen to hear what thoughts the Scottish Government has had on the commission's role in part 9 of the community empowerment act. I know that good food nation plans require local authorities to procure to their public kitchens, whereas part 9 of the community empowerment act is more about local food community growing. I think that there is a connection there or there needs to be a connection because what I notice is that there is confusion. If we do not make that connection, then there can be confusion. It is a good point. I will probably hand over to my colleague Tracy to say a bit more about that, given her heading up the good food nation team. For my part, first of all, I see local food growing and the provision of it both in a statutory sense and more widely as being part of local good food nation planning. That is in a very practical sense in that a food growing strategy under part 9 could form part of what a local authority then produces as its local good food nation plan, but equally just generally that the provision of good opportunity for local growing is part of our vision for a good food nation. If I remember correctly, there is statutory provision under the good food nation act for the Scottish Government and local authorities to work together on guidance for the production of the local good food nation plans. I am sure that Tracy will correct me if I am wrong on that. Tracy, do you want to say a bit more about the interplay between them? Yes, to pick up the last point first in terms of guidance, that was one of the things that was considered during the progress of the bill through Parliament. I do not think that it would necessarily be guidance. I think that there needs to be a discussion as to what would be most useful as to whether guidance is the best way to go or whether there are other ways that the Scottish Government and local authorities could work together in the developing of their plans. Obviously, at the moment, the national good food nation plan is under development. We will be learning lessons as we go along with that and those will feed into the discussions that we will have with local authorities when they are undergoing the process of developing their own plans. To respond to the question about the Food Commission and their role, the Food Commission within the Good Food Nation Act is very tightly linked to the plans themselves. That would be the role that the Food Commission would have in reviewing the good food nation plans either at a national or local level and the legislation is very tightly linked to that. That would be their role there. If there is something within those plans about allotments, community food growing, local food, then that would be part of the mix of their review. Thank you for that. If there is such a thing as a plan hierarchy, from what I am hearing you say, so correct me if I have picked it up wrongly, that probably what would happen is a good food nation plan would sit above and the local food strategy coming out of the Part 9 would be of the Community Environment Act, would sit underneath it. Is that how it would fit? Yes. Perhaps James wants to come in. Certainly what I was trying to say in the beginning, convener, is largely what you have described there. I would not want to say underneath, just part of, and just as a reflection of the fact that local growing is part of a good or plans for a good food nation, of which there are other facets. I would echo that. I would describe them as complementary. Good food nation plans, we are looking for local authorities to set out some outcomes that they want to achieve and set out the policies that the local authority intends to pursue in order to achieve those outcomes. That could have an overlap with the food growing strategy where the local authority will set out how it intends to increase the provision in its area of allotments. Before the good food nation plan has to include the provision of allotments, the local authority would have to decide for itself that that was one of the outcomes that it wanted to achieve. The Scottish Government has to specify functions that local authorities have to have to regard when they carry those functions to their own good food nation plan. The other question that we are looking at at the moment is whether we would specify as one of those functions the food growing strategy that requires to be prepared by local authority under section 119. I would not describe them as having a hierarchy that the good food nation plans would take priority. They are very much complementary depending on how Government works to implement the good food nation plans and how local authorities work to implement the good food nation plans. There is a very good chance that the two plans will be complementary to each other. Thanks very much for that. We are going to move on to another area. I am going to bring in Marie McNair. Good morning, minister. During this inquiry the committee got a chance to get out and meet with organisations and individuals who are making a real difference in their local communities and are very passionate about the importance of food growing. We recommended that this is harnessed into a national forum to drive improvement. How soon will the Scottish Government reach a decision on the creation of such a forum? Thank you for the question and I would just echo your initial comments and the opportunity that I've had to meet folks who have either started or have long-running community growing organisations. I've met because they have done so under the land reform legislation support with the Scottish Land Fund etc. I've met more of those groups who have done so under statutory allotment work and that's probably something for me to reflect on as well in the context of all of this. They are some of the most enthusiastic and excellent groups that I've got the pleasure to meet. On the national partnership forum I have kind of viewed what the committee was saying here from some comments that I think you took on the tripartite group and its remit. I'm quite keen that that remains quite a tight group with SG, with local authorities and with... I always forget what SAG stands for Scottish Civilization of Growing Allotments Gardens Exactly. I'm keen that that remains quite a tight group however I'm interested in what the committee recommended with a national partnership forum. We already fund Grow Green Scotland to the tune of about £20,000 per annum in part to co-ordinate the community growing forum. What I'll do and what my officials and I will do is go away and consider the extent to which that role that they are currently undertaking is akin to what the committee has recommended as regards a national forum and see whether that role is already being fulfilled or what changes might be required or desirable. Thank you. In your opening statement you said that delivery is a challenge at this time with public finances but I'd be interested to know if you did take forward a national forum which I do think is a really important element in bringing people together. How has the Scottish Government cost to take into account the cost for establishing a national forum? You mentioned Grow Green initiative is funded to £20,000 a year but have you looked at the cost for a national forum? The figure is £19,800 per annum and no, not yet is the answer. I need to consider that and it will require quite careful consideration not just about the costings but equally the value to the Scottish Government and local authorities. As of today, there is a considerable bit of work already under way backed by annual funding of nearly £20,000 which we would agree is not insignificant in these circumstances so I want to go away and compare what is being done just now against what the committee has suggested and consider what the gap is going to be beneficial. We very much appreciate your willingness to take on that piece of work. I am not going to move on to a question from Annie Wells who is joining us online. Good morning, Minister. I am sort of staying on the same sort of an issue of funding. Many community organisations told us that they still face a yearly battle for funding for on-going projects that are proven to make a huge difference to people's lives. Does the minister agree that sustaining existing projects is just as important as funding innovation and what steps is the Scottish Government taking to address this and ensure funding can be access for on-going projects? I sort of received two different concerns when I speak to groups across the piece. One is that they cannot get new funding and one is that new funding appears to be all that is available. I think that there is concerns on both sides. I do know that the issue of the reliability of funding and the ability to plan ahead that comes with multi-year funds is something that community and the third sector are calling out for. Of course the Scottish Government has to work on an annual basis now in very volatile economic circumstances but, as with much of this I am absolutely prepared to go away and to consider how we can strive for more stable multi-year funding patterns because I know how that allows groups to plan. The fairer funding practice should be adopted as far as practically possible and I will certainly aim for that. You have already outlined where you think the committee's work can make a difference but I just wondered specifically whether or not the Scottish Government intends to review the Community Empowerment Act including part 9 to take on board some of the issues that we have put forward. It is a good question obviously it is quite a wide-ranging act and you will know that it is my colleague Tom Arthur who is in his ministerial role undertaking the commitment to review the act. A lot of work on part 9 had already started in advance of the commissioning of the review that Tom Arthur is taking forward however it is very much my intention to meet Tom Arthur and to discuss the recommendations both of your report and our reply so that that can be insofar as possible built into his review. That is helpful, thank you. An issue that I wanted to raise which I have raised with you in the chamber is with regard to auditing potential land which could be available and I think that it is a good question to answer the question on potential land which could be available especially with regards to public sector bodies NHS have a significant estate which could be potentially seem to be allocated for this use and some organisations are doing that but I just wondered what plans there are within government to try to have that audit to then ask public sector bodies to allow allotments to be developed because there seems to be a bit of a closed gate situation at the minute for a lot of people who have come to me especially here in the capital trying to access land which is owned by public bodies. I do not currently have any plans for an audit but that does not mean that I am not sympathetic to the view that public bodies should very much consider the scope to allow their land to be used in this way. I know that the question of whether the act itself should be extended to include some other public bodies is something that was considered. I do not think that that is necessary just now because particularly coming from the land reform portfolio I see that we already have a suite of right to buy mechanisms which apply to public private land and to buy a band under a neglected ground to buy to do further sustainable development crofting right to buy and negotiated purchases and sales which happen outside of the act. I see an environment just now with quite a lot of opportunity for that and for that reason I do not currently think that public bodies or that the act should be extended beyond local authorities. Thank you for that. I think that one of the points that we did here was that there are these opportunities that are not there or it's to come from local authorities who then will not have it. I think that there is that financial problem for many people to then be able to take forward some of these bits of legislation. I take on board what you've said and I think it would be helpful to investigate potentially where public sector bodies are even having this on their agenda to take it forward. Some who should be having like the NHS an agenda to try to promote wellbeing and get people into these sorts of activities surely would want to try to release some land to do that. Helpful answer and thanks for your time this morning. Thank you. I do see around my region there are pockets of places where NHS have allowed community growing on their land. I certainly see this lovely project called the Sensory Garden in Tarbet but maybe that's a piece of work around the guidelines and that leadership of signalling and more clearly that this is something that we really want to see happen more rapidly. I'd like to bring in Mark Griffin. Thanks. Part nine of the act placed new duties on local authorities and I just wondered if the minister could set out what funding went alongside those new duties for councils to increase the provision of allotments and community growing spaces. At the time of the passage of the act? At the time and then in subsequent years? Well, I can't speak to at the passage of the act I'm afraid to just own to not having being in government at the time but I think that any additional statutory responsibilities placed on local authorities are born in mind at the time when local government settlement is taken into account and I know that will be this year's settlement is something that this committee will be and is looking very closely at but I suppose for the purposes of this act all I can say is that whenever the government or whenever legislation creates additional statutory responsibilities that will be considered in part of the settlement because it's part of the core funding we would expect local authorities to fund it from there. Okay. In your on-year, has there been any consideration given to increasing the allocation to local government to then allow them to increase the provision of allotments or community growing spaces? Well, it's part of the block grant so again it will be an assessments made of the responsibilities that are on local authorities, the extent to which they may have increased in any given year owing to legislation and then the block grant is the final figure from which we would expect it to come and I don't think I need to tell this committee about this year's block grant I'm sure you're looking very closely at that. Okay. Just finally, convener, in Wales they have allocated additional funding for allotments and you know why it's clear to see the benefits you've stated in the statement wondering if the government has monitored the impact that that additional funding is having in Wales and whether considering following down that path. I always want to learn from neighbours far away and closer by as to how they are managing these things and I was very interested in what the committee had the evidence that you had taken from Wales and since your report officials have met, Scottish Government officials have met with their counterparts in the Welsh Government to discuss their commitment how they think it's going and we will absolutely seek to learn from what they have done and I'll watch very closely to see how achievable the doubling is and how the funding has worked in that regard. Okay, thank you. Thanks Mark. Willie Coffey. Thank you very much, convener. Good morning. Myles Riggs kind of asked the question I was hoping to probe with you so I'll extend it a little bit more for me. It was really about widening the scope of the act to beyond local authorities so I wonder if I could make the leap from this issue to the wider issues in the land reform bill where one of the proposals is clearly to require those that are seeking to dispose of large scale land and holdings and so on to give prior notice to communities and so the inference from that is that perhaps communities get first dibs in potential transfers of land or sales of land. Is that a way for communities to acquire parcels of land pieces of land for this purpose that we are talking about today? Thank you. It's an interesting question and certainly my experience so far is that there are a number of groups who have either used, formally used land reform legislation to acquire land for purposes including growing or have been able to enter a negotiated sale because landowners now realise that there is a suite of legislation requiring this and it has that signalling effect and of course that's supported by the Scottish Land Fund. The point about prior notice to communities and the reason I think it's really important is because it can be an onerous task, not just the point of constituting an appropriate body under the land reform legislation but then going on to buy the land and to take it on and the longer that communities have to prepare for that task the more able they are in the end to take it right through to purchase and to managing it. For me the real value in pre-notification is giving time for communities to prepare to navigate a sale and to plan how they're going to manage and then after so it could be but I think it already is helpful in the community growing space. Do you think there's enough resilience within communities and given the time that they might need to consider such a transaction is there a sense that you have that communities will get first call on Alan Taylor is that really not your intention behind the provisions of that section of the proposal? No it is absolutely about firstly believing that more people and more organisations should have the opportunity to own more land and about giving communities as much time as possible to prepare for the purchase of it if that's something that they want to pursue. Because it can't as I say it is a substantial task but I think that's probably right I think that we know we believe that with rights come responsibilities that goes for large landowners under land reform legislation just as it does a community organisation looking to buy land but the more time that they have and the more the support they have which under land reform legislation is provided by the Scottish Government the better. Okay, thank you for that. Is that support that they have does that come their way when they enter into the Scottish land fund process? It's not necessarily directly linked with the land fund but community bodies can approach our community rights by a team and get guidance from them through the whole navigation of the land reform legislation. Thank you. We're nearing the end of our questions but I'm going to bring Paul McClannan in. Thanks, Kimmyner, and good morning. Good morning. Probably a couple of questions are in about planning issues. The first one is about when does the Scottish Government anticipate being able to actively consider whining permitted development rights to incorporate allotments and other land for growing? This is the first one. I don't have a time that I can give you just now except to say that the commitment to review is still on-going and the commitment to include allotments within that is the commitment is still there. I'm just wondering if Simon has any timeline that he could add to that. I don't think we do but I should let to share it if we're able. Thank you minister. You're absolutely right minister. There isn't a fixed timeline for when allotments will form part of the review but you're absolutely right. The review is on-going and the phasing of the review remains itself under review as we progress with the work. I think that there was some prioritisation given to local energy production just in light of the cost of living crisis and things like that. Thank you for that. Thank you for that question. Obviously we've just gone through the NPF forward process and many local authorities are moving towards their local development plan processes. Does the Government agree with the committee that food growing needs to be a category of land use included within frameworks such as local place planning? I think that's really pertinent as I said with a lot of local development plans now moving forward after NPF forward. I think again just owing to not being the planning minister I might hand over to Simon initially if there's anything that I can add, I will do. Thank you minister. Yes, so in our in relation to local place plans in particular food growing is included in the guidance that we published earlier in 2020 about how to prepare a local place plan and then in terms of local development plans the contents of those is informed by the national planning framework as it will be and local food growing and allotments is well covered within the policies within the national planning framework for so we would anticipate that it would then feed down into the local development plans in addition the guidance that we consulted on about the preparation of local development plans included food growing an issue that may be relevant for planning authorities to consider within the evidence reports that is prepared at the early stage of the local development plan process. Thank you. Simon, thanks for that. Thanks. Just coming back to land in in terms of what's needed for allotments has the Scottish Government calculated or would you consider how much land is needed to meet demand so we've got this big list and maybe we could be looking at how much land we actually need in particular in our cities Edinburgh and Glasgow there's as we know these big lists. Has there been any work done in that way? I think that would my initial reaction to that convener is that that would certainly be something to be done at a local authority level I think local authorities are best placed to respond not only to their own lists which interestingly note in your report you say might actually not be accurate because some people might have gotten it or have moved or whatever so there would be a bit of work for a local authority to do to make sure that the accuracy was there for the waiting lists themselves but a mapping exercise as to the amount of land to meet that would certainly be something at a local level if it were to be done. Perhaps it's something that we're both mutually doing in terms of the committee work and the Scottish Government work and the guidelines and the Scottish Government taking leadership in this direction. Thank you so much for the opportunity to hear from you today I think it's been very helpful and we really appreciate you taking on board what the work the committee has done I think it's been a good collaboration in a sense in terms of moving the allotment situation and the desire for people to grow food locally further forward I now suspend the meeting briefly while our witnesses lead the room The third item on our agenda today is to take evidence on the budget scrutiny 2023-24 We will be focusing our scrutiny on the budget for the affordable housing supply programme which we explored in pre-budget scrutiny and on the funding allocation for local government We will hear from Shona Robison Cabinet Secretary for Social Justice Housing and Local Government from the Scottish Government Cabinet Secretary is accompanied today by Scottish Government officials Kirsty Henderson from the affordable housing supply programme who is the manager Katrina McKean who is the head of Better Homes and Ian Story who is the head of local government finance I welcome our witnesses to the meeting and I invite the cabinet secretary to make a short opening statement Thanks very much convener and thanks for the opportunity to engage again with the committee I think we're all too aware of the many challenges that people are currently facing and since my last appearance here, I think it was back in September we have put in place emergency legislation which has given people whether they rent in the private or social rented sector reassurance within their current tenancies through the worst of the winter other costs have unfortunately been rising and of course more recently we have set out the Scottish budget for 2023-24 we're using all the levers at our disposal to maximise investment and support people and the economy targeting our spending as effectively as possible Scottish budget 2023-24 sets out over £6.3 billion of capital spending to support employment and the economy through our large scale infrastructure plans to move us along the path to net zero carbon emissions and tundra pin the provision of quality public services. Our capital spending ambitions have been impacted by global trends exacerbated by UK Government decisions and in light of inflation repressures and the wider market conditions we've made hard choices to re-prioritise our 2023-24 capital budget to deliver against Government priorities. In some cases this has meant portfolio budgets have reduced when compared to May 2022 capital spending review publication where we've made choices to slow down or reduce available budgets, these are not choices that Scottish Government has taken lightly but we have to ensure that we maximise the impact of our capital investment to deliver against our strategic priorities but despite this more than £3.5 billion will be available in this parliamentary term towards the delivery of more affordable homes and in the most challenging budget settlement since devolution we are providing over £13.2 billion in the 2023-24 local government finance settlement. Following the flat cash position set out in the resource spending review we have listened councils and are now increasing the resources available to local government next year by over £570 million a real terms increase of £160.6 million or 1.3 per cent. The 2023-24 local government finance settlement provides local authorities with £423.7 million of additional revenue funding for vital day to day services which is a real terms increase of £39.1 million. The settlement will also provide an increase in capital funding of £147.1 million which is a real terms increase of £121.5 million. The 2023-24 budget has also baselined an additional £260.6 million for the 2022-23 local government pay deal. In addition to funding from the Scottish Government local authorities have a range of revenue raising powers that are not available to other public services including full flexibility on council tax rate setting and the newly devolved powers over empty property rates relief. We will also continue to work with our partners in local government to build on the Covid recovery strategy and a green urgent approach to improve delivery of sustainable public services that are designed around the needs and interests of people in communities of Scotland. Another critical area of work has been the short life task and finish group on the cost of living tenant protections act 2022 which successfully concluded its work just before Christmas when agreement was reached with the social sector on plans for social rents in 2023-24. COSLA and the SFHA have published statements setting out their members' intentions for rent in 2023-24. COSLA has committed to keeping local authority rent increased to an average of no more than £5 per week. Members of SFHA and Glasgow West of Scotland Forum of Housing Associations have reported planned increases at an average of 6.1 per cent. Finally, the use of average figures rather than a fixed cap allows for the flexibility to honour the outcomes of the statutory tenant consultation. Social landlords must undertake each year on rent setting. This outcome ensures that tenants are protected from unaffordable rent rises whilst allowing social landlords to continue to invest in the delivery of more affordable homes where their business plans allow them to do so. These are just some updates on key areas and I look forward to exploring these and other issues that the committee may wish to discuss this morning. Thank you very much for the opening statement. I'll begin the questions around the affordable housing supply programme. At the previous session with the committee on 27 September you told us that the affordable housing supply programme is a key priority for capital spend for the Scottish Government, so I am therefore confident about its position in any capital spending review. I have heard what you said in the European statement around capital spending being impacted by global issues and UK Government choices, but I'd be interested to hear why the affordable housing supply programme capital budget has decreased by 19 per cent in real terms next year. Let me just first of all say a little bit about that context because it is important. We have seen due to UK Government decisions in the autumn statement the capital flow from the UK Government to the Scottish Government is the key lever in terms of what that quantum is. We have seen a 3.4 per cent real reduction in our capital allocation between 22, 23 and 23, 24. In addition to that is the impact of high inflation which places significant additional pressure on the capital programme in terms of what it can deliver. I think we recognise as well that the flat and falling capital grant allocation that Scotland has received with that inflation really declines the buying power of that investment so what the money we have can't go as far as we would like it to go. That is the context. I think it's also important to say though that we have committed and remain committed to making more than £3.5 billion towards affordable housing over the current parliamentary period and therefore there was always going to be peaks and troughs of investment and that I think I've set that out before. The £23.24 budget for the affordable housing supply programme represents a net decrease of 4.7 per cent £36.87 million on the previous published capital spending review figure for 2023-24 and that is when you take into account financial transactions the figure that you're left with is £36.87 million because it's been an increase in financial transactions. Now what I would say is because of that priority and it being a key priority we will be able to mitigate that circa £37 million reduction to some extent firstly because there's going to be a £15 million in-year transfer from energy colleagues to help fund zero emission heating systems secondly the charitable bond donations generated from investment in bonds this year and the potential investment in 2023-24 will also generate charitable donations that will be directed towards a social rented home investment now it's difficult to put an absolute figure on it but if we want to explore that further at some point I'm happy to do so based on what the return was on investment that we got last year but it is sizeable and therefore taken together those elements I think close the gap of that £37 million reduction to quite a large extent actually but the caveat to all of that is even having said all of that the purchasing power of that investment is not going to be the same as it was three years ago but we will obviously look to see what more we can do and the sector is working hard around joint procurement trying to drive down costs with offsite construction and innovative ways of really trying to make every pound go as far as possible so in some of the convener this is an area of huge importance to us we are mitigating against that relatively small reduction but the global amount of £3.5 billion commitment remains the same as it was thank you very much for outlining that so clearly I'd like to just go a little bit deeper you already touched on the fact that you're going to be getting £1 million from the energy budget and you talked about the bonds but I'm interested to hear a little bit more detail in terms of the impact that this reduction might have in the affordable housing supply programme on the wider Scottish Government priorities such as the outcomes that new affordable homes contribute to such as the net zero agenda I imagine that energy piece the money coming from the energy budget helps there but also reducing child poverty and supporting fragile rural and island communities with new affordable homes so you're right to point out that investment in affordable housing makes a really important contribution to tackling child poverty and the net zero agenda and reducing fuel poverty obviously and through our planned mitigations that have set out those three areas of charitable bonds, financial transactions and the energy money transfer we hope that there will be no negative impact on the delivery of affordable homes in 2023-24 although I think the more important impact is likely to remain being the global issues affecting construction that are impacting the pace of affordable housing delivery inflation costs, interest rates, all of these we are working closely with the construction industry and housing partners to mitigate these where possible we operate a flexible grant system that can take account of increased costs and that is a negotiation between the contractor and the social landlord the housing association and of course we'll continue to collaborate with all our partners to achieve what is our shared goal of delivering affordable homes for Scotland I mean it was always assumed as I said at the beginning that there will be peaks and troughs unfortunately all of the factors bearing down on all forms of construction not just house building affordable house building it does mean that until things change there will be less bang for bucks but it has meant that there has been a slow down in some of the delivery of projects and that's been reflected in various locations across Scotland thank you very much for those answers I'm going to bring in Willie Coffey continuing on the affordable housing theme good morning cabinet secretary you have partially answered the question that I was about to ask it was about the counterbalance effect £31 million but actually gaining £31 million we think it is through the financial transactions just for the benefit of the committee and the members can you explain where the £31 million in financial transactions extra money is actually coming from so I'll maybe get colleagues to come in on some of the detail of financial transactions but financial transactions are available to the Scottish Government to decide how it allocates those financial transactions because there are restrictions of how you can use financial transactions housing has done quite well out of the availability of financial transactions when they have appeared but the fluctuated so we don't really know well in advance what financial transaction availability through the UK Government we're going to get comes quite late so it's quite hard to plan a 10-year investment around financial transactions but when we do get notice of financial transaction availability the affordable housing supply programme has generally done quite well out of that so we've seen this year an increase of £17.6 million in financial transactions which has helped around that balance of capital availability I don't know if anybody wants to add anything on the FTs I think it's probably is that the answer? I suppose the most important thing is that we're getting that money and we're able to direct it towards these schemes to help people into low-cost home ownership and so on there's a risk though lower income households in that market given the kind of volatility that I'm going to wait a minute is there a risk that we're perhaps encouraging people to into the market perhaps it's a bit difficult for them to maintain in terms of the market share equity scheme I think that I think that the scheme works to reduce risk in that you have to meet certain criteria obviously in terms of being able to access the OMSI scheme and I think it's right there for those who are on low to moderate incomes who would not be able to afford to buy their home otherwise that we do have that flexibility to support people to access the housing market but it is important that the strict affordability criteria that's in operation of the scheme will hopefully mean that people wouldn't be taking getting access to the scheme if they were going to not be able to afford it and they are encouraged to seek independent financial advice before taking out any shared equity agreement in addition to any requirements that their own lenders might have having said that I think it would be remiss of me not to point out that whether you're in a rented property or you're paying your mortgage with interest rates inflation cost of living everything bearing down on household costs it does put pressure on every household budget so it's something we need to be very much alive to but I think it's important that we provide that opportunity to people who otherwise wouldn't have it counter to that point as a committee we do hear the particular problems faced by young single professional people who find it incredibly difficult to get anywhere near the home ownership housing market is the Government aware of that and do you think there's sufficient flexibility in all the models to try to reach out and assist them we are aware of that and there have been changes to some of the levels that have been available and they've been reviewed and they've been increased because of the recognition of that there's a geographical variation as well there are obvious hotspots that despite all the pressures on the market can tend to be very buoyant and very difficult for people to access but that's not uniform across the whole of Scotland and there are options that we have seen expand like mid-market rent for example which is still much more affordable than the private rented sector which can be sometimes a good option for people who are in that position but I think there is undoubtedly a challenge for people in some areas of Scotland to get into the housing market and indeed the rental market can be a challenge as well and we are working with local authorities particularly in those areas to look at what innovative solutions they can bring forward in Edinburgh for example we gave some additional money last year to the affordable housing supply programme that they had asked for and we've asked them to come forward with some innovative solutions that we would look favourably upon in terms of how we could work with them to help deliver that and I understand that they are working on some proposals OK, that's great, thanks very much for that Thanks Willie I'm now going to bring in Miles Briggs Good morning cabinet secretary good morning to your officials as well Last week parliament agreed national planning framework for and I wondered do you believe that the funding in this year's budget will be enough for affordable housing which is the ambition for affordable housing within NPF4 Well I certainly welcome the approval of NPF4 and it's now about moving swiftly to adoption so that we can see a positive outcome from that for communities NPF4 is one part of the development plan but an important part and I think in addition to that local place plans can now be brought forward by communities sitting out there aspirations for their places and that might help give communities maybe a bit more of a voice it is more directive in shaping places with things like infrastructure first approach 20 minute neighbourhoods for example and the affordable housing contribution of at least 25% can be increased or indeed decreased based on local evidence but I think in most places the 25% is seen as the kind of floor I can't think of many places that would want to reduce I think they would have to have very strong arguments to reduce that contribution it also contains proposed minimum all 10-year housing land requirements for each planning authority to meet the statutory requirement I would hope that that would mean that we could perhaps see more rapid development of particularly affordable housing projects within those areas I think also housing to 2040 and NPF are closely aligned in terms of the ambitions and have had to really consider had to be like cross consideration of both of those so I think yes but it's I guess as if anything in this world it will only be as good as it is used in practice and we need to keep an eye on that to see what happens I know it's something the committee is also keen to monitor and will be returning to quite early on you've already touched upon the rent-free policy I wanted to ask specifically the committee's heard concerns that local housing associations across the country are rewriting their business plans so I just wondered what impact assessment has taken place on the social rented sector with regards to this below inflation increase which they'll see and going forward how this has destabilised them and I think the committee welcome the fact that they have now been removed from this going forward and something we as a committee had suggested first that they shouldn't have been there in the first place but that they needed to be taken out of that so the agreement is a joint agreement it's been negotiated very much with the sector not to the sector and I think that's important and I think that the certainty will do two things first it'll enable the sector to plan and get on with the new build developments and improvement programmes for existing homes as well as the important support services they provide for tenants and I think the second thing though is that when I speak to housing associations and I'm sure it's the same for members of the committee they always put affordability at the heart of their rent setting and given the current context of where inflation is sitting the rent increases that are proposed and have been agreed in terms of the average are well below forecast inflation rates which means that rents in real terms will be reduced and it has important to say that the voice of tenants is critical in deciding this and housing associations are using the rent consultations as we always do to get that right balance between rents that are reasonable and proportionate and which allow for the on-going investment in services and homes. Now a big percentage of housing association and council tenants will receive housing benefit and we recognise that and the sector recognises that but they also recognise that there are people in low income jobs that would struggle with inflation or above inflation rent rises so they have had to take all of that into account and one of the pledges that the sector has made is to really look at and we want to work with them on this as well about how we can provide additional support for tenants that are struggling with their rent and I am particularly thinking about those who are low income households but are out with receiving housing benefit so I think it gives the sector what they are looking for and it means that they now have that certainty going forward. I wanted to move on to local government budget allocations and then the financial challenges local authorities are reporting and you've touched upon what the government argues is 570 million pounds cash increase for local government now this is a game I think every single budget we seem to be having but Cosler are adamant that when you take into account all the policy commitments Scottish Government put on to local authorities that increases 71 million pounds do you accept that? So I hear what you say about the annual you know he says she says and I think therefore it's important to spend a moment going through some of the detail so I think Cosler had initially claimed that the settlement had only increased by 70 million and now I think they've been using a 38 million pound figure fall in confirmation that 32 million for teachers pay in 2021-22 had been subsumed within the teacher numbers funding so the proposed budget to the allocation and I guess you're comparing it with previous year shows that the best light for light comparison I guess it's what you are comparing what with what that's what I think it comes down to shows if the light for light comparison of available funding at this stage in the budgetary cycle adopting so Cosler's 38 million pound figure discounts funding for specific policy outcomes and doesn't reflect the 260.6 million it was for the 2022-23 pay that's now baselined so it's important that that is recognised just because Cosler and local authorities already know about this baselined funding doesn't mean that it can be or should be ignored so again it comes back to what it is you are including and that is additional funding to what they received in the last budget and supports the delivery of local services not least you could argue very much that that pay the last bulk of local authorities spend as any public services about pay so I think it's entirely fair to include that money so I guess it comes down to that what it is you are including what it is you don't include so we would maintain that it's factually correct that the local government settlement has increased by over 570 million in cash terms in addition to that there's also the additional spending power offered through the budget we're preserving funding provided before the national insurance increase and that's despite it's reversal by the UK Government offering full flexibility over council tax including financial gains from the poundage freeze in addition to the local visitor levy built Parliament this year giving discretionary powers and there is an appetite to also look at what else can be done around fiscal flexibility and indeed other revenue raising powers as we go on albeit that won't impact on this coming year's budget and I'm sure at some point you'll touch on things like the fiscal framework in New Deal but I guess that in short order is why there is a differing version if you like of the budget because it depends what you include and what you don't but I think not including pay is a bit of a stretch to be honest and that's why we've included it and that's the figure we get to is that a good enough summary to you? One thing I would add is that the 517 Parliament dictates that budget comparisons in the budget document must be from budget to budget so that's a matter of parliamentary demand to assist scrutiny and if we were to add things in that come into the budget revision and things those comparisons would be absolutely impossible for Parliament and indeed for us to deal with so I think the 570 is a matter of objective fact and it's set out on the face of the budget as Ms Robertson said the 70 million is a slightly more subjective assessment that doesn't mean it's not right but it's a subjective assessment and it does exclude funding that is allocated for local services and again that's cosilers perfectly within their rights to see that as not within their full flexibility but the funding absolutely categorically does go to local government services and it's consistent with parliamentary presentation for the previous 20 years. Thank you for that and I think that the questions will continue throughout this process from cosiler and others. I just finally wanted to ask a question with regards to any plan to review the funding formula for local authorities that cabinet secretary has touched upon pressures in Edinburgh. They are acute if not in crisis with regards to affordable housing, homelessness and Edinburgh is one if not the lowest funded local authority had anything to add on that during this budget process. Ian will keep me right but that is really a matter for cosiler in terms of the funding formula and where I think over the years have been some adjustments to the funding formula it is a thorny issue among local government itself and I think there is probably quite a lot of hesitance I would say within cosiler and local government more widely to open up that particularly Pandora's box because there will be winners and losers out of any adjustment to the formula so it's not something we can do to local government this would have to be initiated by cosiler if what you are asking me is if cosiler and local government were to pitch up saying they wanted to have a look at this again then we certainly wouldn't stand in the way of reviewing the formula but it would really have to be led by them I think that's the position really absolutely the position every decision on distribution is taken with the jointly chaired settlement and distribution group which meets on a monthly basis and indeed meets again tomorrow so every decision on distribution is taken on the basis of a needs based assessment and it's when you collide those all back into the big distribution formula some of the nuances start to appear and as Mr Robinson has said it's effectively distribution as a zero sum game so to revisit the formula you are going to create winners and losers and on that basis it's important that any proposed changes come from cosiler in the first instance so it's a bit of a stalemate then if they are not willing to bring that forward I think we're quite keen to keep it as a live discussion I think it's a constant discussion as to whether the current formula is the most accurate to distribute funding and I'd like to think that that will be a permanent feature of the formula I'm not going to bring in Mark Griffin with questions Thanks, good morning All 32 directors of finance had written to the Scottish Minister setting out what they felt were over a billion pounds of additional budget pressures to local government for 2324 Cabinet Secretary, if you've had the chance with your officials to meet with directors of finances to discuss the assessment of what the make-up of that £1 billion is and then compare it against the budget allocation for next year to see whether you feel that that allocation meets the pressures that they set out So there's regular dialogue with various people within local government and so the Cabinet Secretary for Finance, Deputy First Minister will meet on a regular basis with various local government representatives as do I tends to be with the presidential team of COSLA or in my case I've spent a lot of time using conveners for example directly and obviously we have so we are well aware of the points that you have put forward and there's been quite extensive correspondence around these matters let me see a couple of things one is I don't think anyone in the room is going to say otherwise that finances are challenging and difficult and that is all parts of the public sector and local government is no exception to that Now just to put some context to the billion pound ask if you took the consequentials for next year in 2023 for local authority and education spending in England bearing in mind this is where Barnett consequentials flow from they were circa 800 million net of national insurance contributions reversal so to be blunt if we were trying to meet that billion pound ask we would have to go well beyond what the Barnett allocation for local government has been from the UK government in addition the global additional resources coming from the UK government Ian I think we're circa about 800 million Slightly more than that Slightly more than 800 million so again to be blunt that would have required us to give not just every penny that was coming from the UK government for all services we would have to have found money in addition to that so the reason I'm saying that is that it was an ask that was just impossible to have ever met so what could we do to look at the art of the possible and that is where the 570 million a real terms increase of 160.6 million or 1.3% was found and that meant making some difficult decisions not least on pay and then base lining to pay that money all has to come from somewhere so I hear what local government base articulations have said but we have genuinely tried to do what we can within a very very tight fiscal environment I appreciate what the cabinet secretary says about you know the political and financial cost of meeting that my question is more about the assessment of the quantum of the ask whether that was a reasonable ask or not I guess you could say that any public service will want to ask for the maximum but I think realise and I think those directors of finance would also realise that difficult decisions are going to have to made across the public sector and I think it's interesting in terms of the accounts commission of what they said and first of all they recognised the 570 million figure which was helpful but they also talked about the two things they said that they would need to be reform and looking at building on the Covid recovery strategy and doing things differently and they also pointed to perhaps needing to review the use of reserves and what those reserves are used for and I also hasten to add that I accept that some of those reserves have already been committed but I think it's always good to keep those things under review so if we're sitting here talking about the health service the health service would also say in an ideal world we would want X but if X isn't available it's then what is the art of the possible within constraints on funding across the board ok as well as the set out the building by budget pressures the directors of finance also set out what they felt the impact of not making those pressures would be and that would be services reducing and stopping staff numbers going down we've seen examples of that with local authorities starting to produce their saving packages and some of them being pretty severe I just wondered what assessment that has potentially been of those 32 various savings packages that are emerging and what the impact is going to be on other public services say health or social care as a result of reducing services being available that were previously provided by local authorities I don't think we can try a way difficult decisions that will have to be made across the public sector not just local government and that the accounts commission were pointing out that when you look at the profiling of the budget set out by UK Government years three and four look particularly challenging so this year and next year would be the time even though things are tough it would be the best time to look at reforms how services could be delivered differently there are some services that could be shared while maintaining a no compulsory redundancy policy which I think most councils and not all councils are committed to doing so it will mean having to look at how things are done differently but if you take the quantum of the budget we have allocated bearing in mind inflation repressures we have tried to do what we can to give local government a fair settlement in the circumstances but recognise it is probably the most challenging budget settlement since devolution because it's not just about the quantum of money it's about the inflationary pressures the pay pressures all of that which heat problem upon problem on an already stretched budget so we've tried to set out our rationale we've obviously used our tax raising powers to raise additional monies to put towards the NHS in particular and we'll continue to discuss with other parties as well what other options people feel could be brought to the table but there are no easy answers here at all finally community the budget shows 12% of local government's budget is from in your transfers from other budgets now that's £1.5 billion that's significant there's one there if you could set out in a bit more detail what the makeup of that £1.5 billion is and how what the proportion of that spend is directed spend and what proportion local government can spend freely on whatever they see fit yeah I think the first thing to say is that councils have autonomy over 93% of their funding so that's about £12.3 billion funding for £23.24 in terms of the other Scottish Government portfolios I can give you some examples there's quite a list I can write to the committee with the full list of that would be helpful but it includes for example a new 22 million for additional adult social workers a new 32 million to support families stay together and reduce the number of children in care through the whole family wellbeing fund a new to put £4 million for local heat and energy efficiency strategies additional 100 million for health and social care to support the increase in real living wage an increase of 16 million for free school meals 521.9 million to support the expansion and funded early learning and childcare yeah there's quite a list but those I guess are maybe I'm just being told the list is in table 5.16 of the budget document but we can write as well if that would be helpful there's also additional capital 80 million for free school meals for some of the infrastructure costs so but having said that you will be aware of the discussions that we are having with local government about increasing flexibility I think that is the right discussion to be having I guess the the thing that we would need to find a way forward on is confidence of some of the priorities being delivered if it's not through ring fencing because as you'll know from time in the chamber it's quite often Scottish Government ministers that are being asked about the delivery of policies that local government deliver so we would need assurance about those joint priorities if we were to move away from ring fencing around some of these matters but I think from my own portfolio interests including local government that I'm very much in favour of trying to do that but we need to do it in a properly organised way okay, thanks Cymru thanks Mark am I going to bring in Paul McLean we've kind of always talked about the impact of inflation in Sonets talking about the affordability of capital projects particularly on councils that have been obviously impacted by inflation increases in interest rates and the cost of materials and labour how can the Scottish Government help councils ensure continued investment in council stock including schools and housing yeah well clearly inflation impacts on every part of public sector investment including local government I think is important that we have the ability or in housing for example that there is some flexibility around the contracts to be able to keep projects coming through and enable them to be delivered capital investment through local government and other public bodies provides important stimulus to the local economy so we recognise the importance of it I think we need to think about innovation so one of the areas in housing that has got a lot of potential well two actually one would be joint procurement and perhaps really trying to pull spending power around negotiations for whether materials or perhaps doing things on a more joint basis across the housing sector looking at more offsite construction because again there are efficiencies because it's all year round built so the interruptions of winter are not as profound when you're using offsite construction but it's an area that probably needs to expand and I would hope that the cost per unit may also come down if there were those economies of scale of large scale purchase through the affordable housing project so I think that those are two there are other areas as well that can be looked at but those I think have the opportunity to drive forward efficiencies in making sure we get as much return for the money invested I might have a question in the fiscal framework but no more moving on to that later on so we'll be coming in on that one but thanks for that thanks Paul Murray you wanted to come in the Deputy First Minister during his budget statement confirmed that councils will full flexibility to set the council tax rate that's appropriate to the local area and to negotiate the council tax fees again this year and what levels of increase do the Scottish Government expect to see in council tax rates next year well firstly on whether a council tax fees would have been right or I don't think it would have in the current financial context and it has been a policy that was appropriate but in the current financial climate that would have been very difficult to justify as you know council tax is by nature a local tax and quite rightly it is set and administered by individual local authorities so the setting of that is a local democratic choice and the level at which they need to be accountable to for that and I would hope in the midst of a cost of living crisis some cognisance would be taken of that in terms of affordability of the local population so maybe just also worth noting that despite increases council tax is general lower in Scotland and elsewhere I think the average band D charge in Scotland is £419 less than in England and £430 less in Wales so by comparison I think people are you know still having lower levels of local taxation than perhaps elsewhere in these islands so ultimately as I say it's for local authorities to justify to their local population where they end up landing on council tax thank you staying in the issue of flexibility then councils within my constituency east and west in Barcha have indicated that they are considering a range of budget cuts like a lot of members I'm concerned about the proposals and I want to see councils getting the best support from the budget settlement and maximum flexibility and we've already touched on this but can you assure the committee that the Scottish Government will consider requests made by councils for maximum flexibility and how they apply the budget allocations from the Scottish Government and can you assure the committee that discussions will continue with COSLA on the scale and scope of the settlement well on the last point I mean I need to be totally honest that there is no more money on the horizon because there's no more money on our horizon and there's no kind of magic pot of money that is hidden away somewhere it is absolutely not the case and you know I think for the first time in a long time there was a very limited if any carry forward for the Scottish Government so you know these are really challenging challenging times in terms of flexibility yes I guess go back to the exchange with Mark Griffin you know we there's a balance to be struck there I think it's right that the presumption is about that's maximised flexibility particularly in these challenging times but you will have heard as I do that Scottish ministers are often asked and held to account for the delivery or otherwise of local government around key shared priorities so that is the important bit that we need to get right is what is the accountability and the trust and confidence that ministers would have whether it's in education or housing or whatever if ring fencing was removed what are the commitments that are going to be made that that will remain a priority and I think of some discrete areas of my own portfolio like homelessness investment for example every really really important investment in ending homelessness and you know I would want as a minister responsible for that assurance that remains a priority and that the funding the appropriate funding will be made in order to deliver on the commitments made so those are all part of the discussions that we continue to have and I think will be the core of new fiscal framework going forward so to try and get that balance because we don't want to micromanage local authorities but we do want to have some confidence and assurance that when we agree priorities to make people's lives better in improvements that we see some delivery of that through whatever partner that we're working with I'll show you your concerns there just one further comment there are many pressures on council budgets beyond this control obviously we've mentioned already like inflation, fuel cost Covid-19 recovery etc but one council in my area have highlighted the pain of the PPP projects have saddled them with debt for now over 60 years do you have any indication of a Scottish-wide cost for these schemes and how much is it costing the Scottish Government in the way of grant support to councils and if you don't have any figures can you possibly write to the committee if that would be really helpful I certainly recognise the point and it is a long term financial commitment that local authorities are tied into and some of the deals that were done particularly in the early days were a very poor value for money for the public purse and the longevity of some of those deals is quite eye watering I'm happy to write to the committee with that figure I don't have it to hands I do recall it being used in the chamber recently but I can't recall what the figure was so I'll write with the latest figure available thank you really appreciate your comments thanks Maria yes that would be welcome to have that information I just wanted to pick up on council reserves in 2021 to 22 almost three quarters of councils 23 of them reported an increase in usable reserves however local authorities have been enforced for many years to supplement general grant revenue funding with reserves to prevent cuts to highly valued community facilities and services and this is of course not what reserves should be used for yet local authority funding levels have resulted in the necessity to do so I think the committee would be interested to hear from the cabinet secretary if you believe that local authorities should be drawing on these reserves and if so what circumstances? well look ultimately these are decisions for for councils to make and you know I totally accept that you know once reserves are spent they're spent so they can only be spent once and I do also accept that you know some reserves will be earmarked for things that may have been earmarked for quite some time I think though like any organisation you would expect local authorities or any other organisation that has reserves to hand to keep their current priorities under review and to make sure that if something was I roll maybe a priority five years ago and the reserves had been earmarked for that these things should always be kept under review to look at whether in the current financial climate or current competing priorities what is the most important use of those reserves so I think that would really be my main point other than money is money and the judgments have to be made about the appropriate use but in a cost of living crisis some local authorities are already doing this to support people through the most difficult of times that the reserves can play an important role plus the point that we were talking about earlier on reform sometimes the impediment to reform can be trying to keep the existing show on the road while trying to do things differently and reforming services actually reserves can be very useful in that context because you can have a twin track approach to reform services to make improvements and better value for money but ultimately these are decisions for councils to make but I'm sure that these are some of the discussions that are being had I imagine they certainly are we're going to move on to the new deal for local government and local governance review in a few questions in that area the committee would be interested to receive an update on the progress towards agreeing a new deal with local government in November the minister for local government and social security informed the committee that a deal will be agreed in advance of the next financial year that's quite soon is this still going to be the case and if so why were there so few details on the new deal in the budget document well, I think it's fair to say that the last six months have seen a big focus on things like cost of living crisis pay deals the budget and we now really want to turbo charge the focus on the new deal there's a number of discussions taking place there was a number towards the end of the year and a number this month at ministerial level to really try to move things forward we also know that Cosola and Solas have been clear that they want to get it right and they would rather not rush and get it right and take time and I think probably that's on balance the right judgment if it's going to stand a test of time then if it takes a few more months to get it right I think that's probably the right call to be honest thank you for that I'm going to bring in Willie Coffey thanks very much again Cabinet Secretary I was first elected as a local councillor in 1992 and every year as night follows day there's a one fight argument every year about ring fencing and so on and so forth and we've touched on it today do you think there's new life that might be needed into that debate perhaps in the new deal that could attempt to resolve that dispute every year because when the public look at this and perhaps read the debates going on they can't cut through on the figures it's incredibly difficult and complex for the public to maybe even to decide who's right and who's wrong and you've heard some examples of it even today so do you think there might be a little bit of effort to think in the new deal negotiations to try to resolve that particular issue and to enjoy it annually for ever more I mean it would be good to get away from that wouldn't it I mean I guess previously we had the Concordat which actually did have a very different way of delivering services in that there was almost entire ring fencing was done away with at that point however I think it's fair to say that there is perhaps not been the delivery in some quarters of some of the priorities can I be as kind of gentle as that so the question is as we've touched on on a couple of occasions through this session what could be done that strikes the right balance between maximising flexibility but having that flexibility for what is spent on what now there might be some issues around what you've said there around the transparency of what's spent on what and how that's done I think is part of the discussion that needs to be made but so if you go back to homelessness I think there would be no one really generally in local government and elsewhere that would say that homelessness investment in services is not a priority but it's a discrete amount of funding so I would need some assurance that it's not that discrete pot of funding that's for that purpose and it goes into a bigger pot but homelessness is an agreed priority for all of us how does that then translate to what's delivered within that local authority on homelessness services because it's a really important discrete area of work that supports some of our most vulnerable people so that's one example of so we need to track that out and discuss about what might that look like that gives all of us the assurance that we need so that if there's questions in the chamber on homelessness I've got some assurance and confidence that what I'm saying about delivery on homelessness services is actually the reality on the ground so these are the types of discussions that we need to have and we need to get it right and it needs to be able to last the long term so that we can get away from what you've described as being kind of intemnable, kind of annual discussions and that's not to say that local priorities are not important they are and for each local authority will have quite rightly different priorities and that's not to cut across that at all but there will be agreed priorities the Covid recovery plan maybe points away to some degree that there was all kind of shoulders to the wheel against clear objectives and joint priorities there may be some lessons in that how we can use that learning to apply it to other areas it was nice to hear you reminisce about the historic contract in 2007 there was very nice to hear that again but the narrative cabinet secretary around ring fence intends to be kind of negative it's as if the impression is that we're forcing councils to do things they don't want to do but these are shared priorities we understand we might try to get to that kind of discussion so that it's not seen as directive from on top to do things that local authorities might not actually want to do in fact share these priorities with the Government don't they? I think you're right there's very few I can't really think of any that wouldn't be shared priorities and I think there are some sensible kind of changes that need to be made not just for local government incidentally but I think third sector as well where we sometimes require quite onerous reporting for relatively small amounts of money and that's really not in anybody's interest so we need to have a sensible set of arrangements that strikes the right balance and allows the movement of money where that needs to happen and there may be times where things are underspent for a variety of good reasons and you know so we need to be aware of that but I'm hopeful that we can make progress and on the point that you mentioned yourself you gave a few examples of how there's more flexibility within local government to raise their own revenue and you mentioned that you cited a couple of examples there is that a journey that you would see continuing that we would hope to give more flexibility to local authorities because our understanding is that across Europe we have more of an ability to raise revenues locally than perhaps councils do in Scotland so is that kind of direction a travel one that you support and you would hope to develop in the future? Yes definitely but it will take time sometimes something sounds very simple and straightforward but nothing ever is and it always takes a bit longer to put things in place and to get it right but on the principle of it absolutely and I think we would welcome dialogue with local government around some ideas that they might have beyond what's already on the table and being agreed around different ways of raising revenue that might be different from the city authorities to the rural ones I think there has to be a recognition that 32 local authorities are all quite different in nature and priorities and populations but at the principle of it yes I don't see why not Lastly for me just on the issue of certainty and multi-year funding announcements and arrangements is that becoming an embedded approach that the Scottish Government will hope to continue to take so that local councils can plan ahead for 2-3 years rather than this annual preparation and planning that sometimes is subject to volatile changes in the economy so that some you prefer to stick with multi-year settlements providing that level of certainty yes and the fiscal framework is really key here and it really intended to establish a new fiscal relationship with not just multi-year budgets but established agreed ways of working including how local governments engage in the budget process and that might offset some of the issues that we talked about earlier greater flexibility improved accountability and I think where we can we absolutely should and not just for our local government we mentioned the third sector earlier on and I think giving certainty to them around multi-year funding would be a major step forward and discussions are going on about how that could work thank you I'm going to bring Paul McClellan in with the supplementary I think I've touched on this before at the social justice committee I'd asked the DfFM about the fiscal framework discussions that are going on between the Scottish Government and the UK Government at this time and whether more flexibility would assist probably the committee in a demand-led service to suppose local government and housing is demand-led I don't know if there's any thoughts on the discussions going on at the moment between the UK and the Scottish Government about flexibility that might help your portfolio have you got any comments on that at all? Do you mean in terms of the financial framework in terms of borrowing powers additional borrowing powers or anything else you think would be useful because I think we then discussed it within the social justice committee in that regard we know for example that the social security budget is a great example of how that agreement doesn't work and the limitations on borrowing powers is just a major impediment exposed hugely through Covid and then a cost of living crisis so as a matter of urgency those are issues that really do need to be opened up and if we can get that opened up and a different budget settlement for the Scottish Government in terms of those flexibilities and borrowing powers that will benefit parts of the public sector so it's really very important that additional borrowing powers would assist what's going on within the sector in the bithousing and inflation absolutely thank you what would we need to do to get that opened up? discussions have been muted but they're not at a detailed level as far as I'm aware there has been an agreement to talk but there has not been much detail around any progress being made specifically but happy to again drop a note on what the latest position is I think it's I would like to think maybe I'm being entirely optimistic that the UK Government perhaps recognises the point and that might be a good starting point to recognise the point and the fact that the arrangements that have been around for over 20 years are now waiting a bit thin and are not fit for purpose so I'll write or I'll ask DFM to write that would be very helpful just further to the questions and answers which you've given to both Willie and to Paul I wondered with regards to the national care service what COSLA have been outlining their concerns around where it currently sits and where all the budget pressures that you've outlined this morning there's an opportunity to pause to look at that and to allocate the resources attached to that now to local government so that that funding is not being used and to look again at what's happening with that policy I mean firstly on just on the budget I think I mentioned earlier on there was 100 million for health and social care to support the increase in the real living wage as well as more funding for social care in the round in terms of the deal at the moment it's still local government delivering social care so that's important I mean as we move forward we absolutely are committed to the principle of delivering a national care service we'd like to work with COSLA local government in doing that but we understand and hear their reservations and we need to work through those and we are part of doing that I think we'll be working with perhaps those local authorities that are keen to make progress to demonstrate how things can be done in a different way I don't think anybody could say that the current arrangements and I was a big advocate of integration and I had high hopes and expectations and as a former home care organiser I probably know far more about this and I ever wanted to in terms of the interaction between health and social care and some of the blockages in the system and integration was an attempt that everybody had a lot of hope for to overcome some of those barriers but it just hasn't delivered in the way that I think all of us had hoped and aspired to so doing nothing will change is not an option the national care service I think I've delivered it correctly and it will take time to get that right I think it can deliver a better deal for people who are receiving care and when you hear what they have to say they are very strong views in favour of reform and change Okay, thank you Thanks Miles from Annie Wells who's joining us online Good morning Cabinet Secretary and thank you, convener Cabinet Secretary, you did touch on service reform in that previous answer to Mark Griffin and as you'll know the recent accounts commission local government financial bulletin the commissioner William Moy stated that if councils are to find a safe path through the difficult times ahead they need to focus on more service reform and based on strong engagement with communities what more can the Scottish Government do to assist councils in this process? Well, thanks for the question and I think maybe just firstly to say it's not just local government that needs to look at service reform I think we need to look across the public sector about how can we do things differently and that's not about a diminiation or reduction in quality of service but it is a recognition that if you look towards years 3 and 4 of this budget cycle continuing a business as usual is just really not an option given the reductions in resources that will be coming to the Scottish Government so really now the next couple of years is the time to be looking at how that reform could happen and the council commission have said likewise that local government needs to be part of the story there and is a huge part of the public sector landscape when you think about the interaction whether we've just been touching on local government and health but there's interaction between local government and other public services and interaction between local authorities on a regional basis and I think we need to have a rapid dialogue and it is a dialogue it's not for us to tell local government how they should reform it needs to be a dialogue first of all, primarily among local government about the appetite for reform and for change but I certainly think there is an appetite within the Scottish Government to support that type of thinking and if we can be of assistance to local government and indeed other parts then we're keen to do so thank you cabinet secretary thank you convener we have a little time on hand so I'm just going to loop us back to the affordable housing conversation and I just wanted to pick up on rural rural housing the reduction in budget for the affordable housing supply programme will likely add to increasing pressure on landlords and local authorities to provide sufficient housing in their communities and therefore I'm keen that we support community led developments to complement our national efforts to tackle the rural housing crisis and through the work I've been doing in my region it has become clear the vital role the role that community housing enabling organisations play I'm aware of around 600 projects in my region across 150 communities or in a pipeline process and the work that the enablers are doing is work that's very much in a way what you're talking about in terms of the reform piece you've been talking about it's work that needs facilitation time it's about bringing the communities to a place where they really understand if they have the capacity and the confidence to take the leap to take forward housing which is quite an onerous thing to do I'd be interested to hear how this budget supports rural housing enablers to support communities in taking action on the housing crisis that they are experiencing first of all let me first of all recognise your interest in this and I know that you've certainly had a number of discussions about the importance of affordable housing delivery and development not just in urban Scotland but very much in rural and island Scotland as well and I'll be aware of the developing remote rural and island housing action plan which I see as a really important milestone in getting an understanding of the blockages some of which you've just articulated and more importantly how we overcome those respect to have full plan in the spring and the important consideration within that is the role of the community housing trust movement and we've also given a commitment to look at how they can be supported in the work that they do and one of the areas that has been identified and it's not an easy one to resolve is that that kind of early stage development phase and I think that's something that the plan needs to look at and look at how that can be addressed and I think that the community housing trust has an important role there not least that sometimes in very very small developments resolving community differences, keeping people on board working through some quite tricky issues quite often they are well placed to be able to help and lead that work so very much recognise the point you're making convener and I'm hoping that the plan will help to move forward these issues thank you very much for that I look forward to seeing the plan in the spring and obviously this really connects into our the government's commitment to also maintaining our rural populations in place definitely thank you very much for coming today and giving us your evidence responding to our questions I think it's been very helpful to the committee to hear a bit more detail about the budget allocation as we agreed at the start of the meeting to take the remainder of our agenda items in private we have no more public business today and I now close the public part of the meeting