 I would advise members before we move to the next item of business that this is follow-on business and sadly we appear to be missing a number of members who would be participating in this or seeking to participate in this debate and they should already be in the chamber as far as I've been advised. The next item of business is a debate on motion 12035 in the name of Kenneth Gibson on behalf of the Finance and Public Administration Committee on Scottish budget 2024-25. I would invite those members who would wish to speak in the debate to please prior to the request to speak buttons and I now call on Kenneth Gibson to speak to and to move the motion on behalf of the Finance and Public Administration Committee about up to 12 minutes, please Mr Gibson. Thank you, Presiding Officer, and I'm pleased to be opening today's pre-budget 2024-25 scrutiny debate on behalf of the Finance and Public Administration Committee. This debate provides an opportunity for committees to discuss their findings from the pre-budget reports and to explore how the Scottish Government is responded through its budget. I look forward to hearing more from members about the work of their committees during the course of this debate. For example, this year we saw the Citizen Participation and Public Petitions Committee undertaking pre-budgets scrutiny for the first time ever, which will be of particular interest. The FPA committee has further developed its guidance for committees for 2024-25, including ideas for different approaches that can be taken, signposting to relevant government and performance information and highlighting cross-cutting issues such as fiscal transparency, equalities, national outcomes and net zero scrutiny. SPICE has also taken on an enhanced co-ordination support role by identifying and publishing common themes that have arisen during pre-budget scrutiny across committees. Before we start, I want to thank all members of the committee for their diligence in the work that it has gone into producing our reports and also the exceptional support that we have received from our clerking team and SPICE. We of course need more transparency, accountability and the reasoning behind decisions and measuring progress, along with concerns regarding data gaps and delayed programmes. Those are highlighted by various committees. Many such issues are also explored in the FPA committee's own pre-budget report to which I now turn. It is May 2023, a medium-term financial strategy. The Scottish Government is projecting a potential £1 billion resource spending gap in 2024-25, rather than £1.9 billion by 2027-28. Inevitably, that will mean difficult decisions ahead in relation to its approach to taxation, prioritisation of spending and the reform of public services. The Scottish Fiscal Commission's fiscal sustainability report, published in March last year, suggests that the longer-term funding position is no less challenging. The SFC projects Scottish Government spending over the next 50 years to exceed the estimated funding available by an average of 1.7 per cent each year, or £1.5 billion in today's prices under current Scottish and UK Government fiscal policies, and the UK is in a similar predicament. Scotland's population is expected to continue to grow older with potential implications for the future demand for public services, as well as Government spending and tax revenues. It is against that background that the FPA committee focused our pre-budget scrutiny on the sustainability of Scotland's public finances. In January last year, we expressed concerns regarding the Scottish Government's lack of strategic long-term financial planning and wanted to see what progress had been made in that area. However, we found little evidence to suggest a shift away from a short-term approach to financial planning. We also set out our concerns that affordability does not appear to be a key factor in Scottish Government decision making. Our report also includes the findings and recommendations arising from a recent inquiry into the Scottish Government's public services reform programme. Given that the Scottish Government identified that, it is a clear area of focus to help it to balance the books. We found that there was an absence of an overall strategic purpose and objectives for the reform programme, as well as delays in publishing the further detail that it had previously promised. The Deputy Convener will explore this area of our report in more detail when closing the debate. In its 2023 medium-term financial strategy, the Scottish Government had committed to publishing refreshed multi-year spending envelopes alongside the 2024-25 budget. We recommended in our report that this should include sufficient detail to enable meaningful parliamentary scrutiny and allow public bodies to plan ahead. However, the Scottish Government has only published single-year spending plans for 2024-25. It explains that this is because, I quote, the nature of the autumn statement and the office of budget responsibilities forecasts make future prospects more volatile and it could be misleading to plan too far ahead across the board, close quotes. The Government plans to revisit the multi-year outlook and its next MTFS in May 2024. The SFC told us that, in our role as an independent fiscal institution for Scotland, we encourage the Scottish Government to plan its budgets over the short and long term. An approach that suggests is even more important against a backdrop of uncertainty, the committee shares that view. Our report noted that the Scottish Government plans to target spending towards delivering its three missions of equality, opportunity and community. We therefore recommended that the Scottish Government explicitly set out in the Scottish budget 2024-25 if there are any areas of spending that is assessed as not meeting its three missions test and where funding will, as a result, be reduced or ceased entirely. The Scottish Government's response states that the published portfolio allocations will reflect where investment has been sustained and prioritised. Nevertheless, while the figures provided in the Scottish Government's show where funding has been reduced or indeed increased, there is little explanation of why these decisions have been taken. Our budget report published yesterday calls for greater explanation in future years of how the Scottish Government has targeted its spending towards delivering on its key priorities. We are disappointed that the capital funding available to the Scottish Government continues to fall. That is particularly concerning during times of financial strain when Governments should be investing in infrastructure to stimulate economic growth. As members are aware, the capital budget comes primarily from the UK Government through the block grant. The latest figures from the SFC are even more concerning. In the medium-term, the SFC expects total funding, resource and capital, to increase by 4 per cent in real terms between 2023-24 and 2028-29, assuming the Treasury GDP deflator of 1.7 per cent as a measure of inflation. However, even using the SFC's figure, capital funding is expected to fall by 20 per cent in real terms over the same period as stated in page 5 of the Scottish Government's budget document. We heard during our scrutiny of the Scottish budget 24-25 that this decline represents particular difficulties for areas of the budget that align capital funding such as the affordable housing budget. The Scottish Government has responded favourably to the committee's recommendation that, to support transparency, it should adopt a similar approach to that of the UK Government and the SFC in comparing its budget plans for spending with the latest estimates or out turns from the previous year's spend. While that information is not provided within the budget document itself, the Scottish Government responded that it would set out the requested detail in an additional online publication in January 2024. While that progress is welcome, the data does not, as yet, appear to be published in me, therefore have unfortunately been unable to factor this into our scrutiny, so we call for earlier publication in the future. Along with the SFC, we have also previously called for budget data to be published by classification of functions of government, known by its acronym, COFOG, such as health, economic affairs and environmental protection. That allows spend to be tracked and measured more easily year on year, regardless of whether ministerial portfolios change. This is the second year that the Scottish Government has published COFOG data alongside the Scottish budget, which is very welcome. This year, the SFC has also produced analysis based on the COFOG data and additional detail from the Scottish Government. Unfortunately, we have not been able to consider the analysis part of our scrutiny in the year due to a late January publication date. The members who were attended yesterday will have heard great discussion and detail of the COFOG data and how it makes measurement of spend much more clearly clear to see. We therefore asked the Scottish Government to provide this detail to the SFC an earlier date to maximise the opportunity for parliamentary scrutiny of this analysis. A pre-budget report, the committee welcomed the establishment of the tax advisory group as announced by the Scottish Government in May last year. Outcomes from the tag were to feed into the Scottish budget 2024-25. We saw that as a step towards the creation of a clear strategy for taxation in Scotland and concluded that it is imperative that this work progresses at pace. However, there is no information in the budget on or if the advisory work group has fed into the Scottish Government's tax policies as announced. The committee has heard much evidence in recent years about the potential impact of increasing income tax on behavioural change, but given the uncertainty in this area, we asked the Scottish Government to confirm how it is considering potential behavioural impacts as part of its decisions on taxation policy in 2024-25 and as part of its plan new strategy for taxation to be published in May of this year. We know the work that the HMRC is doing in this area and hope that this analysis will help to support future decision making. The committee recommended that the Scottish Government produce a full response to the SFC's fiscal sustainability report. Setting out the actions, it will take to start addressing the longer-term challenges ahead, but disappointing with the Scottish Government response is silent on this recommendation. This is crucially important given the challenges that Scotland faces. We have therefore restated our recommendation in our budget report. The committee has consistently recommended that more actions needed to increase productivity, wage growth and labour market participation in Scotland. The Scottish Government has pointed to its national strategy for economic transformation as key to addressing those issues. We therefore asked what progress has been made in delivering actions in the NSCT that will help to increase productivity, wage growth and labour market participation. We also asked what plans are in place to help to broaden Scotland's tax base. The Scottish Government provided examples from the NSCT, such as the role of its tech, scale and network to support start-ups and boost entrepreneurship in Scotland, green hydrogen funding, its R100 broadband programme and introduction of fair work conditionality. The NSCT progress report, published in June 2023, sets out a fresh focus on the new actions that the Government will progress to deliver a growing economy. This year, we continue our focus on establishing the extent to which spending decisions impact on the delivery of the national outcomes in the national performance framework, and this follows our previous inquiry into the NPF's ambitions into actions. We also had to scrutinise the proposed national outcomes arising from the Scottish Government's recent statutory view, in which many committees will have a scrutiny role. The Scottish Government's response explained that its approach is embedded across Scottish Government activity. However, it is still difficult to see exactly how budgetary decisions are aligned with the national outcomes. We hope that the Scottish Government will take the opportunity of the upcoming review to make this much clearer. In a pre-budget report, we welcomed the Scottish Government's approach to enhancing its taxonomy information. For the first time, the approach identifies and categorises all spending lines across the Scottish Government with regard to the climate impact by resource, as well as capital. We understand the Scottish Government's position that, as this analysis for 2024 is new, it does not include a comparison to previous years. Instead, it aims to set a provisional baseline from which to learn. We look forward to continued developments in this area that will help to support parliamentary scrutiny of how the Scottish Government's spending decisions are impacting on climate change. In the time available today, I have only been able to touch on some of the key issues in the FPA Committee's pre-budget report and in the Scottish Government's response to it, Presiding Officer. However, I am sure that other members of the committee will wish to expand on those points during the debate. In closing, I move the motion in my name that the Parliament notes the pre-budget scrutiny that I have undertaken by the Finance and Public Administration Committee and other parliamentary committees. I recognise the importance of today's debate as part of the Parliament's scrutiny of the Scottish Budget. I thank the Finance and Public Administration Committee for its recognition of the budget challenges that they face. I would also like to put on record my thanks for the scrutiny undertaken by all parliamentary committees and the support that the clerks give to that process. The budget has been extremely challenging in its development set in the most turbulent of circumstances. As I said before, November's autumn statement by the UK Government was a worst-case scenario for Scotland, as the Institute for Fiscal Studies has noted that the tax cuts announced by the Chancellor in November will be paid for by real-terms cuts in public service spending. One of the particular challenges of the autumn statement is that the need for the gender for change pay consequentials is not being recognised. I would take the opportunity to urge the UK Government to use the spring budget in March as an opportunity to rectify that critical misjudgment. A call echoed by comments of the IMF when they said this week that the UK Government needs to be investing in public services, not cutting taxes for the wealthy. The UK Government did not deliver for Scotland's budget, resulting in a real-terms reduction in our total block grant and a settlement that falls far short of what is required. That is why I continue to press the UK Government to use the spring budget to prioritise investment in public services over offering tax cuts to deliver much-needed increased capital investment and to provide the support that households deserve during the on-going cost-of-living crisis. As I stated to Parliament in December, the UK Government's fiscal settlement for Scotland does have serious consequences for the delivery of our public services. That is the reality that we must manage for this budget. It is essential that we strike a balance between the funding available for Scotland and what can be delivered within it. That means difficult choices with Scotland's limited fiscal powers. There has been no choice but to reduce our spending to match the available funding. I hope that she can put on record that she welcomes the new fiscal framework, which allows a greater flexibility for the Scottish Government. Of course, as I have done before, as Liz Smith will be aware, but it helps on the margins. It does not help with the central point and problem that the quantum available does not match the scale of what is required and the capital availability is a significant challenge to the infrastructure needs of our country. A point that I and the Welsh—indeed, the Northern Irish—made to the chief secretary to the Treasury at our meeting last week. As I indicated to the committee on 16 January, the cuts to the capital funding are causing real issues for the Scottish budget, particularly for our health and housing capital budgets in particular. I feel that they understand the difficulties that that creates. Those are top priorities to be addressed, as I said at the committee, should additional capital become available. We emphasised that point to the chief secretary to the Treasury at our meeting last week, as I mentioned earlier on. That is why our fair and progressive approach to taxation is so important, because it enables the Scottish Government to increase the funding available for the Scottish budget, which means that, in 2024-25, we will have an estimated £1.5 billion of additional funding to support Scotland, compared with what we would have had if we had followed UK Government tax policies. I thank FPAC for its report on the budget and will respond fully to it ahead of stage 2. As I indicated to the committee, further work is under way to update the infrastructure and investment pipeline to ensure that it is affordable, deliverable and provides best value for money. We are planning to publish that alongside the next medium-term financial strategy, as it is important that future investment plans are embedded in our wider thinking on fiscal sustainability. Of course, that will be post the spring budget when we will have a better idea of what that fiscal event means for our budget. I would also like to recognise the committee's desire for genuine public service reform, and that is why we have laid out broader goals on a programme of action. It is complex and difficult. We have set out objectives, set out our approach and our structure, and we are now working across Government on our critical path to delivery. It is important that we take our workforce with us in this process. I met the civil service trade unions again this morning, and we discussed the matter alongside other issues. For the 2024-25 Scottish budget, I have carefully balanced the growing asks against the available funding. I have made decisions against our key missions of tackling poverty, addressing net zero sustaining public services and economic growth. The budget next year gives our NHS the protection of an uplift above real terms, and we are investing over half a billion in our front-line boards, taking total investment to £13.2 billion in the year ahead. That means that our resource funding for health and social care has more than doubled since 2006-07. I recognise, too, our vital local government services, and that they, of course, as the rest of the public sector, face significant budget challenges. I am pleased that, despite the challenge, our local government revenue funding is now 2.6 per cent higher in real terms than it was back in 2013-14, as confirmed in the recent accounts commission report. I do not underestimate the challenges faced by local government, which is why the budget is providing record funding of over £14 billion, including £144 million of funding for a council tax freeze, which will provide certainty and support for households across Scotland. I also appreciate the interest from local government in the new funding, estimated at £45 million, which is anticipated as a result of the new local government social care funding that was announced for England on 24 January. I am very sympathetic to local government's interest in the new funding. Obviously, it is not confirmed as yet, and we have to wait for the UK to confirm that the earliest that can occur is the spring statement on 6 March. I wholly support the Parliament's recognition of the importance of supporting the economy. That is why the budget is supporting a fair, green and growing economy, with £5 billion of investment across the Government. Enterprise agencies are important in that matter and help us to deliver more widely on the Scottish Government's three missions. In recognition of their role, we are providing over £307 million to our enterprise agencies over the coming year. The funding will support their work to create jobs, business growth and its fundamental and our efforts to tackle poverty and to generate the investment that is required to improve our public services. The Scottish Government represents, I think, distinct choices, including our single largest investment of £6.3 billion in social security benefits and payments, an increase of over £1 billion compared to £23.24. That supports people with disabilities to live full and independent lives, helps older people to heat their homes in winter, and aids at low-income families with their living costs. The 2024-25 budget also prioritises support for our young people with nearly £2 billion of funding for universities and colleges, supporting the delivery of high-quality education training and research. In terms of delivering on our net zero ambition, £4.7 billion is being spent on climate positive activity. I appreciate the interest in the £200 million of Scotland funding that is used in this budget to help to support climate change activity and, of course, the delivery of vital public services. The Scottish Government also values the contributions that are made by our remote and rural communities, and we are providing £4.3 million of capital investment to support the delivery of our national islands plan and our carbon neutral islands project, which is helping to tackle the climate crisis. In addition, £15 million is being restored to the rural affairs portfolio budget, which will be used to support farmers, land managers, rural communities and businesses across a range of programmes. The positive impacts that culture has on our nation's health and wellbeing cannot be overstated. By recognising the transformational power of culture and the value of the contribution that it makes, the Scottish Government will deliver significant benefits for the people of Scotland. We are able to confirm that we are increasing funding next year for the culture sector to £196.6 million, an increase of nearly £16 million. Underpinning our support for communities is the financial investment that we are delivering in our justice system. We are investing £3.8 billion across the justice system. That represents an 11 per cent increase in resource funding compared to the current year. I will conclude by recognising the work of the Equalities, Human Rights and Social Justice committees. The equality and fairer Scotland budget statement, published alongside the budget, looks at the impact that the Scottish budget will have on the people of Scotland. I thank the committees for their constructive engagement and I look forward to further discussion, not just on this afternoon but in the weeks to come. Thank you, Deputy First Minister, and I call Claire Adamson on behalf of the Constitution, Europe External Affairs and Culture Committee, followed by Sue Webber, around seven minutes. I am pleased to be speaking on behalf of the Constitution, Europe External Affairs and Culture Committee. The focus of our budget scrutiny, as throughout this parliamentary session, has been the Government's culture portfolio spend. That approach has the benefit of building on previous working positions and gives us an opportunity to better assess progress over the years. Through our community's scrutiny over three years, we have heard a consistent narrative around the on-going financial challenges. While Covid support was welcomed and acknowledged, recovery for the sector has been a varied landscape. For instance, Historic Environment Scotland was faced with a fall of 80 per cent in revenue in 2020, but it is now seeing increased visitors and foreign visitors recovering. It caveat that, though, with a concern around the cost of living and fuel bill costs on households and, indeed, those pressures on their own buildings. We approached the budget scrutiny with three questions. How has the culture sector evolved in the past 12 years? What progress has been made in that time on accelerating innovative solutions to budgetary pressures? What are the challenges to the future of the sector and the need for a strategic approach to ensure its sustainability? The Scottish Government's culture strategy will be key to that. A year ago, we found that budgetary challenges facing the sector had become much more acute. We were contributing to, quote, the perfect storm of long-term financial pressures, reduced income generation and increased operating costs. In this year's scrutiny, the Edinburgh International Festival suggested that the perfect storm had worsened in the last 12 months. Glasgow Life agreed that it showed, quote, little sign of abating and, perhaps, deepening. External and public funding pressures were persisting, the cost of living, fuel costs, the commitment to fair work and the sector remained under significant financial strain, the risk to its future sustainability being more severe. The cabinet secretary himself observed that written submissions to our call for views, quote, make somber, extremely stark reading. We also concluded in our committee's report last year on culture communities that funding constraints within the current financial environment pose a significant challenge to the successful delivery of place-based culture policy, including the respective funding of local government culture services, of publicly-owned community spaces where culture activity can take place. The committee, of course, recognises both the challenging economic circumstances that we currently face and the urgent need to restore confidence in the culture sector as it continues to face significant pressures. The First Minister has committed to increase the Scottish Government's investments in artisan culture by £100 million over the next five years. Let me be clear that the evidence that we received on our pre-budget scrutiny predated that announcement. The committee did not have an opportunity to scrutinise the commitment further until well into the budget process, but the cabinet secretary provided us with some more information about the commitment that appeared before the committee two weeks ago. We have since written to the cabinet secretary to seek further detail on what the sector can expect in the years after 2526. As cultural bodies and stakeholders repeatedly told us, the cabinet secretary also noted in his opening remarks to the committee on 18 January that there remains a need for long-term clarity and confidence. Presiding Officer, let us not underplay the importance of the creative economy to Scotland. Culture adds colour to our lives, shapes how we see ourselves, contributes to our shared sense of community and wellbeing. It plays a role in how we position ourselves globally. I am about to risk the wrath of our many brilliant cultural organisations by highlighting just a couple, but I mean no disrespect to the others. We are in the midst of Celtic connections, one of our brilliant festivals, along with the EIF, the Edinburgh International Festival and the other Edinburgh festivals. It is a thriving sector that stands out. Our screen sector is also booming at the moment, and it is a very welcome movement. The growth sector statistics show that gross value added of our creative industries in 2020 was £4.4 billion. That is a 62 per cent increase over the previous decade. However, over the past year, the existing brotherly challenges faced by Scotland's culture sector have become even more acute, as they have to many walks of life and many of the areas that we will be discussing in this chamber this afternoon. We want to see what progress then can be made with innovative funding solutions. We know that asks, but we need to see progress on multi-year funding, cross portfolio funding models that embed culture in the wellbeing society and approaches to additional public funding as to how the transient visitor levy might be used, or we engage with more private investment in the culture. The committee found little progress on those fronts when we reported last November, and we are calling for much greater urgency and a clear pathway to make tangible progress on implementing those funding models. The cabinet secretary told us in last year that the Scottish Government is still in the foothills of making progress in cross portfolio working. In our culture and communities report, the committee recommended that the Scottish Government should now set out how it will accelerate that work. From our pre-budget scrutiny, we said that there is a need for much greater urgency, and we strongly urge the Scottish Government to set out detailed plans and steps that will take to achieve tangible year-on-year progress. As I have already mentioned, the cultural strategy for Scotland, which has been warmly welcomed by the sector, will be key to doing that. As the strategy states, we will engage across government to mainstream culture and policy making, prioritising health and education in the first instance. Our work will recognise the transformational power of culture and value to the contribution that it makes to achieving our key outcomes. On that note, I finish. I welcome the opportunity to speak this afternoon on behalf of the Education, Children and Young People Committee in this debate. For our budget scrutiny, the committee focused on issues including funding for further education and local government education budgets. The work of colleges and their funding allocations has been a considerable focus for the committee throughout this parliamentary session. Our colleges, which are largely dependent on public funds, are facing significant financial challenges. The committee has repeatedly raised its concerns about the extent and impact of those challenges, not only in our scrutiny ahead of this budget, but also in our scrutiny of 2023-24 and in our college regionalisation inquiry report. Ahead of last year's budget, the sector provided projected significant staff reductions of around 200 to 300 full-time equivalent staff per year from 2022-23 to 2026-27. Those projections were based on a flat cash settlement for the sector across this period. Although on allocation of the £701.7 million that was initially announced for colleges for 2023-24, £26 million higher than the year before, the Scottish Government took the decision to withdraw those additional funds. Audit Scotland pointed out that that meant that the Scottish Government's funding for the sector had reduced by 8.5 per cent in real terms between 2021-22 and 2023-24. Universities similarly saw £20 million of their funding removed. Further in-year cuts of £56 million across both university and college sectors during 2023-24 have placed further financial pressure on them. We know that colleges are critical in providing opportunities for learners of all ages and, importantly, to ensure the realisation of the Scottish Government's national strategy for economic transformation. The committee is concerned about the scale of the cuts that are projected by the sector and the impact that they will have. The committee has therefore asked whether the Scottish Government has modelled the potential impact of college staffing cuts on its end-set strategy. I welcome a response to that from the minister, cabinet secretary or whomever is closing the debate later on today. The question is even more pertinent for 2024-25, given the Scottish Government's decision to reduce the resource allocation to colleges by 8.4 per cent in cash terms and 9.9 per cent in real terms compared to last year's budget. Universities will also see a reduction in their resource allocation from the £809.2 million that was initially announced for 2023-24 to the £760.7 million figure announced for 2024-25. That is a reduction of 5.9 per cent in cash terms. The committee recognises that colleges need more resource but also acknowledges the challenging nature of the current financial climate for the Scottish Government. The committee has therefore consistently raised the need for colleges to have as many financial and operational flexibilities as possible. We noted that the Scottish Funding Council introduced some flexibilities for colleges this academic year, including reducing the level of activity that colleges must deliver for their funding and ensuring that a proportion of 20 per cent of their funding is not directly related to delivery of credits and therefore cannot be clawed back if activity targets are not met to recognise the semi-fix term costs that colleges have. In his evidence to the committee, the minister for higher and further education and minister for veterans explained that colleges had not used those flexibilities as expected largely due to a lack of understanding. I would hope that the minister would continue to work with colleges to ensure that those flexibilities are fully understood and therefore allow colleges the opportunity to really benefit from those. The minister has committed to explore what other flexibilities are possible for colleges as part of tertiary sector reform. We welcome his commitment, but we also urge him to consider what further interim flexibilities are indeed possible ahead of such reforms that colleges cannot afford to wait. When scrutinising funding for local government education budgets, the committee took evidence from the Association of Directors of Education Scotland and the Chartered Institute of Public Finance and Accountancy Scotland local government group. Witnesses from ADES welcomed the fact that education budgets have been protected. However, they highlighted that, as a result, other areas of local authority spending have borne the burden of savings targets. They also highlighted that savings elsewhere still have an impact as education spends on other council services depends on other council services to operate. The committee noted that ring-fence grants and directed funds make a significant contribution to the funding on education by local authorities, including £130 million for pupil equity funding. However, witnesses have highlighted that, when such directed or ring-fence funds are provided for the first year but are not rated for subsequent years, it means an effective cut in funding, with local authorities needing to make up the shortfall from elsewhere within their budget. Given the pressure on local government budgets and with inflation remaining high, the committee believes that, when providing directed or ring-fence funds, the Scottish Government should be clear on how it will uprate those funds for subsequent years. As part of the evidence, witnesses also highlighted that, with several policies, including free school males and absolute teacher numbers, it is inputs that continue to be measured rather than outputs. In our letter to the cabinet secretary, we reiterated that it is of critical importance that there is a focus on the outcomes that policies are expected to achieve rather than inputs. We also stressed the need for such evidence-based decision-making, particularly at times of financial constraint, to ensure the most effective use of funding. It is essential that the Scottish Government understands what the impact of policies will be when deciding which ones to pursue. We know, after all, that such choices will be difficult, and having the evidence of impact that they will have—or do not have—will go some way to help to justify and understand those choices. The committee recognises the pressure on the Scottish Government budget, and we further recognise that the Scottish Fiscal Commission's financial outlook indicates that such financial challenges will continue over the medium term. Consequently, the Scottish Government will not be able to keep funding all services to the level that it has been. It is also essential that the Scottish Government is clear about what its priorities are and to communicate that to the people and organisations working in and relying on the sector to ensure that there is widespread understanding about what is to be achieved. Clare Baker, on behalf of the Economy and Fair Work Committee, to be followed by Ariane Burgess, is around seven minutes, Ms Baker. While today is an opportunity for a convener to talk about the committee's scrutiny of the budget, I would like to thank the Finance Committee first for its report and considered comments on the budget. I want to highlight its reflections and evidence on the economy first. To quote from its report, The committee is unclear in light of spending cuts to further and higher education, enterprise agencies and employability, how the Scottish Government has, as intended, prioritised its spending towards supporting the delivery of a fair, green and growing economy. The Finance Committee goes on to say that some individual decisions appear to conflict with the priorities of tackling poverty, growing the economy and prioritising public services. That reflects views that they heard in evidence, including from Professor David Bell of the University of Stirling, who said that it does not look like the budget particularly favours economic growth, and the Fraser of Allander Institute who stated that they would not say that the budget is particularly focused on growth. That is where my committee's session with the Cabinet Secretary for a wellbeing economy and fair work and energy began yesterday morning. Some of the frustration of looking at the annual budget for my committee is the limited budget lines that exist in this portfolio that were pointed towards demonstrating an economic growth strategy. While the national strategy for economic transformation is to be refreshed, the budget lines for this portfolio are largely on the decline. While the cabinet secretary made the case for investment in public services, which the finance committee identifies principally health and social security, the Government has to be mindful that investing in the economy and supporting businesses to expand and increase employment produces increased revenues for the investment. In the 2024-25 budget, the wellbeing economy, fair work and energy portfolio has reduced by more than 8 per cent in real terms compared to last year. In her opening speech, the cabinet secretary emphasised the role of enterprise agencies, but this year's budget particularly impacts on all three enterprise agencies, with Scottish enterprise reduced by nearly 17 per cent in real terms, Highlands and Islands enterprise by 14 per cent and South of Scotland enterprise by nearly 22 per cent. In real terms, if financial transactions are included, the capital budgets of the three enterprise agencies are reduced by over 24 per cent. The Visit Scotland budget falls by 12 per cent in real terms, primarily a significant two thirds reduction in the capital budget. That largely impacts on the rural tourism infrastructure fund, but we also heard from the Scottish Tourism Alliance that that will lead to a slide in core marketing, international competitiveness and creating awareness. Although the budgets are being reduced, there is a lack of detail on the expected impact of the cuts on the enterprise network in Visit Scotland, on their staffing levels and on the level of support that they can provide to businesses. I also do not imagine that the cabinet secretary is unaware of the significant concerns being raised by the tourism and hospitality sectors about the precariousness of their businesses. Yes, there is recognition of the negative impact of energy costs and the wider UK economic environment, but the committee also heard the sector's frustration that a lack of Scottish specific action and a lack of engagement with the sector. For the second year, while the Barnett consequentials of around £260 million have come to Scotland through the retail hospitality and leisure business rates relief scheme, a similar scheme to this has not been introduced in Scotland, Wales has introduced a scheme and Scottish businesses describe operating at a disadvantage. I thank the member for giving way. Would she, at least in her committee, accept that, whereas some businesses need support, other businesses in the retail and hospitality sector are doing very well? I hope that it is an interesting thing that we heard on the committee that, while it might appear that they are doing well, the factors that I have raised already around energy and other business pressures are reducing the profitability margin and are leaving them. We can all see the closures that are happening, particularly in retail hospitality across the country. They are still in a very precarious situation. While the Scottish Government has said that hospitality businesses on Scottish islands will benefit from 100 per cent rates relief for £24.25, which is welcome—as I say, it is welcome—but the cost of that is understood to be around £4 million. The committee has been told that businesses feel unsupported and, in their own words, there was a lack of respect when they run up to the budget. UK hospitality Scotland has said that the budget has been an opportunity to see what difference the new deal for businesses had made, but there was a lack of frustration and a lack of engagement and concern raised over conflicting priorities, an issue that was also identified by the finance committee. We recognise that the small business bonus scheme supports businesses in the sector, but the estimate that 10,000 are not eligible for the scheme. The cabinet secretary said yesterday that the Government is looking at what can be done in the long-term on business rates reform. That is a consistent issue for Government to address, but we have no timescales for action on that. The committee also asked about the changes to taxation and the impact of tax divergence within the rest of the UK. We heard evidence that that could present recruitment and retention challenges, and I welcome the finance committee's call for the Scottish Government to keep under review the potential impacts on business and the economy of differential income tax policies in Scotland. In 2021, one of the Government's stated priorities was support of £50 million funding for a women's business centre. Despite the committee regularly asking for updates, we saw no progress on that. Following Anna Stewart's review, the recommendation from that pathways report is now for a national network of pre-start centres, which the Government is supporting. Yesterday, the cabinet secretary advised that the resources for that are £1.5 million, which is in the innovation and industries line of this year's budget, that is somewhat short of the £50 million that was pledged in 2021. That is an area that the committee will continue to have an interest in. In our pre-budget letter, we asked for an update on the Scottish Government's £100 million commitment to help businesses to improve their digital skills, capability and capacity. By last February, only £38 million of the allocated £100 million had been spent. The £38 million represented support provided through digital development grants, digital development loans, the digital boost national programme and a pilot project on digital productivity. It is disappointing that, due to financial pressures and new priorities, those four programmes are paused when the evidence that we have heard was that they were oversubscribed, and that Scotland is comparably behind in terms of our digital business offer. In this area, more strategic funding is being retained, but the direct support to businesses which they really value is going. In addition to scrutinising business support, the Economy and Fair Work Committee continues to focus on the investment needed for workplace training and skills development. Supporting businesses to address priority skills and skills gaps is vital, and the committee has concerns about the removal of the flexible workforce development fund and the impact that it will have on employee development. It is regrettable that the employability budget for next year is down by more than 24 per cent and, in particular, the fair start Scotland budget will fall by £13.9 million, closing it to new referrals. That is against a backdrop of last year's reduction in planned spending. With the labour market pressures that we are experiencing and a real risk of a rise in unemployment, employability services are vital for supporting those who wish to work but face barriers to doing so. Last year, we asked for assurances on equality impact assessments as cuts in this area risk marginalising people and reducing their opportunities. Fraser of Allander continues to provide analysis, highlighting why employability spend is important, and the committee will shortly turn its attention back to Scotland's disability employment gap and what more does need to address that. We all want to see investment in our public services, that everyone benefits from, but one key source of revenue to enable investment is a strong economy, and the Government has to be mindful that cuts in this area can have negative long-term consequences, and it must do all it can to generate economic activity in communities across Scotland. Thank you, Ms Baker. I now call Ariane Burgess on behalf of the Local Government Housing and Planning Committee to be followed by Co-Cab Stewart again around seven minutes, Ms Burgess. Thank you, Presiding Officer, and I'm pleased to speak in this debate on behalf of the Local Government Housing and Planning Committee. The committee's pre-budget scrutiny this year focused on workforce issues in local government. However, that scrutiny has broadened out in the course of the budget scrutiny into a wider consideration of the financial sustainability of local government, and it is on that broader perspective that I will focus my comments today. Mindful of the committee's remit, however, it would be remiss of me not to reflect on the proposed cuts to the Affordable Housing Supply Program budget, and before I turn to the primary focus of my comments, I want to touch briefly on those cuts. Although we have not yet scrutinised the implications of this potential cut, the committee wrote to the minister asking for an indication of the considerations that informed the cut and its implications. In his response, the minister points to a 10% real terms fall in UK capital funding over the medium term between 2023 to 24 and 2027 to 28 as precipitating the cut. He notes that a review of the deliverability of the Affordable Housing Supply Program schedule for 2026 to 27 will be brought forward to 2024. He also notes that in parallel the Scottish Government will accelerate work with the financial community in Scotland and elsewhere to boost private sector investments in Scotland and help to deliver more homes. We will be holding round table sessions later this month looking at the Scottish Government's housing to 2040 strategy and the extent to which it aims are being delivered or indeed whether they continue to be the right ambitions for housing in Scotland. As part of that, we have asked participants to reflect on the implications of these cuts for the deliverability of the strategy and meeting Scotland's housing needs more generally and we will reflect on the minister's response to us. I look forward to sharing the findings of this work with Parliament. As Charles Short's Snoopy author said that's the secret to life replace one worry with another and with that in mind I now turn to reflect on our consideration for the local government budget. The challenges facing councils are undeniably sizable. Amongst other things councils are having to face the challenges of pay inflation and living wage costs. Costs associated with COVID-19 recovery, energy inflation, non-pay inflation including costs of materials, construction costs and contract inflation, demand for and price sensitivity of chargeable services and the related impact on income from fees and charges. In this context at the end of last year the local government information unit published its first-ever survey looking at the state of local government finance in Scotland. It found confidence in council finance is critically low. Indeed respondents from eight different councils said that there was a danger financial constraints could leave them unable to fulfil their statutory duties. In our budget considerations last year we stressed the importance of local and national government concluding a new deal to meet these challenges. We particularly stressed the importance of agreeing a fiscal framework and we welcomed the government's commitment to that. It's pleasing therefore one year on to see that progress has been made. The committee was immensely pleased to see the Verity House agreement published last June and it is pleasing too that although there have been significant challenges since then to the relationship between local and central government particularly in the council tax freeze both sides remain committed to the agreement and progressing with its ambitions. Nonetheless the ambitions of the Verity House agreement are yet to be realised and we must see significant progress towards them in the course of this year. Central to realising the ambitions of the Verity House agreement and meeting the immense challenges facing local government must be the immensely complex and the efforts to agree a fiscal framework have been ongoing for many years. Nonetheless it is critical that a fiscal framework is agreed as soon as possible. A fiscal framework must be in place in time to inform next year's budget and enable the Scottish Government and local government to work together more effectively. We cannot wait another year. In the absence of a fiscal framework unfortunately we found our budget considerations beset again by different interpretations of the budget figures. I'm confident that this sentiment will have been expressed by all of my predecessors as conveners of various different iterations of the local government committee over the last 25 years. We can't keep doing this for another 25 years. The Scottish Government and COSLA must agree a common understanding of the figures and how best to present them so that we can focus on outcomes for our communities now and not debate over different interpretations figures. There must also be clarity and certainty around what is ring fence and what is not and what is directed spend and what is not. We continue to hear different interpretations of this and we must get beyond this so councils can be clear on the flexibility they have to deliver for their communities. The Verity House agreement expresses an ambition wherever possible to provide multi-year certainty to local authorities and we appreciate the challenges in providing local authorities with that certainty. However the committee would welcome any further reflection on how as part of a fiscal framework there could be a move to multi-year funding. We look forward as a committee to working with the Scottish Government and local government this year in the drive to progress the Verity House agreement and in particular the drive to a fiscal framework. We can be here again next year saying the same things. Thank you Presiding Officer. Thank you very much, Mr George Burgess. I now call Cokab Stewart on behalf of the Equality, Human Rights and Civil Justice Committee to be followed by Edward Mountain. Mr Stewart, around seven minutes please. Thank you Presiding Officer. I'm happy to contribute to this debate as convener of the Equalities, Human Rights and Civil Justice Committee. The three principles of human rights budgeting are participation, transparency and accountability. Our 2024-25 pre-budget scrutiny saw a set out on a three-year plan to look at each of these principles in turn. We started with participation, transparency to be explored in 2025-26 and accountability for 26-27 pre-budget scrutiny. Over the summer, instead of a typical call for views, we ran a public survey aimed at understanding how people relate to the budget. More than 100 people responded to that survey and we saw clearly that people understand budget decisions in the context of how it affects their lives. We also got the impression that it's often difficult for citizens to see the positive impacts of the Scottish Government's decisions. I'd like to express my thanks to the people who took part. The survey gave us information that touched on almost every portfolio and their input showed the value of reaching out beyond our usual stakeholders. Along the survey and hearing evidence from stakeholders, including Bemis, COSLA, Health and Social Care Alliance Scotland and the Scottish Women's Budget Group, the committee put a specific focus on engaging and working with a citizens panel. The committee's officials, including the clerks, spice and the participation and communities team, identified a group, the whole family equality project, which is supported by capital city partnership. They agreed to take part and work with us all to help us, the politicians, to learn how they, the people, view and understand the budget process and in particular how the budget impacts on their lives. Before I talk about the citizens panel itself, the process itself, I want to say a massive thank you to the citizens for their willingness to engage with us. They demonstrated a lot of passion and it was good to see their confidence and understanding grow throughout the process to the point that if they weren't happy with something they would certainly let us know. At the end of August, our officials met with 12 participants from the project to build capacity within the group, discussing the roles and the differences between the Parliament and Government, giving the panel an introduction to the budget process. That was followed by an online drop-in discussion to help the panel prepare for the next stage of the deliberative process, which was facilitated workshop and the committee on 12 September and was also attended by Collette Stevenson, convener of the Social Justice and Social Security Committee. It was an opportunity to discuss how and when people should be able to participate in the budget process and what barriers there are to participating. It also allowed participants to share their lived experience and explain how they felt spending decisions had influenced their experiences in areas such as social care, health, local government, education and young people. On 24 October, five members of the panel spoke to the committee in public session during which they told us questions that they would like the committee to put directly to the minister and that is exactly what we did. However, there was disappointment amongst the panel that they felt that the minister wasn't able to answer the questions in sufficient detail due to the intersectional nature of their questions that were covered across portfolios. We followed up by writing directly to the appropriate portfolio ministers. It would be fair to say that previous iterations of the committee have also encountered similar issues. If equality, inclusion and human rights are to be properly mainstreamed, there needs to be a clearer sense and demonstration of ministers working collegiately across portfolios. One thing that came through loud and clear during our engagement with the panel is that people, citizens, see the Government as one entity, not as a range of disparate silos. It is important that we as members and as committees recognise this. If we don't, what impact will we have? Citizens were very clear in their understanding of competing budget demands and that difficult choices needed to be made, but they needed more information on the rationale for those decisions. As well as being something expressed by our citizens panel, that came through loud and clear in our post-budget session on Tuesday this week, when witnesses Professor O'Hagan, Heather Williams and Claire Gallacher all said that it is really difficult to understand how budget or spending decisions and allocations have been reached. We can all acknowledge that times are challenging and the Scottish Government and others have very tough decisions to make in terms of how they allocate money. That being said, as Heather Williams pointed out, people will have different views on how funds should be allocated or what should be prioritised, and they may well disagree with some decisions. However, if there was a better way or a clearer explanation as to how those tough decisions were reached, at least people would be able to better understand the reasoning and processes behind them. Witnesses did remark that progress was indeed being made. It is just very slow and it is very much a work in progress. For example, it is important to recognise where progress is being made. A good example of that is the increased linkage between budget and the programme for government, which is very welcome. Observation on where that can be further improved is that we need clearer links to performance against outcomes. The upcoming refresh of the national outcomes is an opportunity to consider how that might be made possible. We should all give some thought as to how we can assist the process through scrutiny. We need to encourage as well as challenge. We regularly talk or recommend the Scottish Government to mainstream equalities. Our predecessor committees have also encouraged more mainstreaming of equalities, and human rights across all committees' scrutiny of the budget must be further developed and become embedded. There are opportunities. We can be creative, innovative, for example. There are opportunities for joint committee working in some aspects to ensure that the fullest scrutiny is applied. We can make recommendations to the Scottish Government, and we can ask what it is doing. There is nothing to stop us, especially if we work in partnership with real people in citizens' panels, by listening to them and considering the solutions that they may suggest. The spice blog that was published yesterday provides useful context and offers some helpful pointers on how all committees might adapt their scrutiny. Finally, following our experience on working with the citizens' panel, I would strongly encourage other committees to consider that approach also. Edward Mountain, on behalf of the New Energy and Transport Committee, to be followed by Collette Stevenson up to our own seven minutes, Mr Mountain. Thank you very much, Presiding Officer. I welcome this opportunity to speak on behalf of the Net Zero Energy and Transport Committee. It is our role to scrutinise the Scottish Government's actions to secure progress towards becoming a net zero nation and to check if it has the resources that it needs to tackle the climate and nature emergencies. We have, frankly, a huge remit, and in the time that I have, I can only pick on a few highlights. Last year, I stood up in this debate and undertook on behalf of the committee to hold the Government to its commitment to increase transparency around the carbon footprint of the budget. This year, some progress has been made with the publication of the Climate Change and Carbon Assessment alongside the budget, so we welcome that. However, on Tuesday morning, just as we were starting to take evidence from the Government, we were told that some of the figures used in the assessment were inaccurate. Clearly, there is a huge amount of work still to be done to reliably articulate from the Government to the Parliament on how budget decisions contribute or indeed do not contribute to reductions in carbon emissions. For example, a theme of our budget work has been funding public transport, a vital component of the Scottish Government's own ambitions to reduce car travel by 20 per cent. On buses, we heard of grants and funds reduced to zero, and of late notifications of this to key organisations such as the Strathclyde passenger transport. We are unclear how such decisions will help to step the change to net zero. The committee has dedicated much of this session to ferry services, as indeed did our predecessor committee in the last session. So, it becomes no surprise that I mention it here. It is disappointing to hear that money has not been allocated for the work to upgrade the harbour at Ardrossan, merely to contribute to a review of the business case of that harbour. We also heard that no decision has been made to procure vessels through the small vessels replacement programme, although funding has been earmarked. We still do not know what the final costs of hulls 801 and 802 are going to be. EV charging infrastructure has also been a further theme of our budget work. We are pleased to hear of the delivery of 2,700 chargers through the £65 million of funding for Charge Point Scotland. However, progress through the electric vehicle infrastructure fund is less clear. The fund is to develop 6,000 new charge points over four years. We are halfway through that period. We heard this week that £20 million of that fund has been committed, but not yet drawn down. The fund has yet to deliver any charge point. That raises the questions about the effectiveness of spending and the pace of progress under that fund. Another point of our pre-budget work involves assessing budget settlements for Scotland's environmental regulators. We are pleased to see that both NatureScot and SEPA have received a real-terms increase in funding for this year. I hope that that will translate into real progress in areas such as habitat restoration and robustly enforcing existing laws and regulations protecting the environment. Before I talk to the next point, I want to remind the Parliament that I am a partner in a farming partnership, which has trees on it, but I have not applied for any planting grants in the last 10 years. My point is that the trouble with the good news on SEPA and SNH is that it is somewhat undercut by the news elsewhere in the budget. For instance, we need to see an acceleration in tree planting, both for habitat restoration and to absorb carbon emissions. However, funding for Forestry Scotland and woodland creation schemes has been reduced, despite ambitious targets already being missed since 2017. We know that this is a tough financial year, but we question the consistency of decision making and the implications that this has for the Scottish Government on reaching its own goals. We would remind the Scottish Government that Forestry Scotland is not a tap that it can turn on and off as required. Turning to the budget allocation for energy, the ambitions of the Scottish Government for the offshore wind sector are indeed welcome. However, we have raised questions about the efficacy of funding for as long as we continue to have somewhat clunky marine consenting and licensing arrangements. The cabinet secretary told us that the decision to kickstart the £500 million fund for offshore wind meant that funding for nitrogen innovation was not being prioritised in this budget year. We note that so far, only 7 per cent of the £100 million previously committed to hydrogen over the Parliament has been allocated, with no additional monies being made available in this budget. The Scottish Government has previously committed to spending its considerable revenues from Scott Wind leasing on tackling climate and nature emergency. Yet we heard that the money drawn down so far has been used to support the overall budget and that this may well be the case in the foreseeable future. Again, we appreciate the Government's financial predicament, but it is worth reflecting on the long-term benefits that ring-fencing money could afford. We are at a crossroads in our journey towards net zero. 2030 now looks pretty close to us. There are questions about whether some of the decisions in this year's budget maintain the momentum that we need to meet our 2030 and 2045 targets. But to this end, a note of qualified optimism, there will be a climate change plan this year. Some of us wish that it could have been sooner, and I'm told that it will be delivered by November. It would have helped if it had been delivered sooner for our budget scrutiny to have had it in our hands. But we are where we are. That will set out, I hope, the Government intends to deliver its carbon reduction targets and details of the associated funds that are needed. We really look forward to considering that plan alongside the other committees and hopefully getting a better understanding of the policy choices that the Scottish Government makes. It will still be able to deliver by 2045. Indeed, that plan should make our budget scrutiny next year more meaningful. I am delighted to speak on behalf of the Social Justice and Social Security Committee in today's debate on the Scottish budget. First of all, I would like to put on record our thanks to organisations that assisted with our pre-budget work. I want to speak about a few key areas of the committee's scrutiny. As others have mentioned, the setting of this budget has to be seen in the context of challenging financial circumstances and difficult choices. Our scrutiny focus is very much on poverty and the impact that the Scottish Government's budget could have on addressing it. Given that many people continue to face difficulties in making ends meet, as the cost of living impacts persist, we recognise the importance of maintaining the real-terms value of benefits. That is why we called on the Scottish Government to upgrade all Scottish benefits by the September consumer price index of 6.7 per cent. We are pleased that it did that. The vast majority of the £7.5 billion social justice budget is for social security. At £6.7 billion, the increased investment of £1 billion on social security compared to last year will provide support to more than 1.2 million people. The Scottish Government has chosen to spend more on social security, delivering 14 benefits, seven of which are unique to Scotland. That includes the Scottish child payment worth £25 per eligible child per week. The Cabinet Secretary for Social Justice advised that the payment is lifting 50,000 children out of poverty this year. While child poverty is still too high, the cabinet secretary assured us that the Government is relentless on its focus of reaching the child poverty targets and has promised to provide an update on progress. We also know that the Government's approach to the application process for adult disability payment has resulted in a higher number of claimants receiving support. That is very welcome. Sharing people with long-term health conditions and disabilities get the support that they need is crucial to building a fairer Scotland. On the scale of social security investment, the Scottish Fiscal Commission told us that social security spending in 2024-25 will be almost £1.1 billion more than the Scottish Government receives from the UK Government through the social security block grant adjustment funding. That difference is estimated to rise to £1.5 billion in 2028-29. The committee acknowledges that increased investment in social security has to be funded and that that has implications for the Government's budget decisions in other areas. Another key theme examined in our pre-budget scrutiny was homelessness. Recent statistics showed that the number of homeless applications increased in 2022-23. Both Shelter Scotland and the Scottish Refugee Council called for housing to be prioritised in the budget. It referred to the current situation as a housing emergency, but Shelter Scotland highlighted that it is not just one crisis. It is an affordability crisis, an accessibility crisis, a crisis for children and a crisis of cost. All those crises have come together as an emergency. When the cabinet secretary appeared before the committee, we asked why, given the importance of new affordable housing to reduce poverty and homelessness, the Scottish Government cut the affordable housing supply programme budget. She highlighted the impact of the UK Government's decision to slash capital spending. We also heard about the impact of inflation and Brexit-related workforce challenges on house building costs and that the Scottish Government will work with stakeholders to maximise value for money. We hope to hear confirmation from the Scottish Government soon about its ambition to build 110,000 more affordable homes by 2032. We will continue to monitor the budget's impact on homelessness. A further area of stakeholder interest was the proposed parental transition fund. The cabinet secretary advised us that the fund cannot be delivered as originally planned due to interaction with reserved tax and benefits, but that the Scottish Government will continue to deliver on the overarching policy aim to support parents into employment. We wanted to understand the decision taken. The importance of parental employment in addressing child poverty cannot be underestimated. Our recent report on tackling child poverty through parental employment takes an in-depth look at the cross-cutting actions that are needed to make progress. As such, we were keen to know what the Scottish Government is going to do to support those parents who would have benefited from the fund. The cabinet secretary stressed that the Government is still spending £90 million on employability support. We have yet to discuss the Government's response to our report, but I am sure that we will carefully consider follow-up work and the impact of the budget. I want to briefly touch on fair funding principles for the third sector, and we continue to press the Scottish Government for updates on the provision of multi-year funding, as SCVO has made a plea for more consistency. We look forward to receiving a detailed update on that from the Scottish Government, and on its commitment that, for 2024-25, approved funding is notified in March this year. That would afford organisations the best opportunity to deliver their crucial services in the coming financial year and to seek match funding, particularly as many of those services are essential to support people with complex needs, experience and poverty. In conclusion, we all recognise the challenging fiscal circumstances. However, the committee welcomes the Scottish Government's decision to increase investment in social security. Estimates suggest that Scottish Government policy overall is lifting 90,000 children out of poverty. We will monitor that and continue to scrutinise the impact of Scottish and UK Government policies on social justice, and committee members will be listening closely to the Scottish Government's response this evening. I am pleased to contribute to this afternoon's debate on behalf of the Rural Affairs and Islands Committee. This afternoon, I want to reflect on our pre-budget scrutiny, as well as our session with the Cabinet Secretary three weeks ago, and the publication of the budget. I will be honest and open with the members in saying that a pre-budget scrutiny exercise has once again been significantly squeezed as a result of the volume of legislation that the committee is currently considering. I am sure that other committees will have experienced the year-round approach to financial scrutiny that is challenging when committee time is mostly taken up with bills and legislation. For that reason, the committee took the decision to continue with its previous approach to scrutiny by specifically focusing on the funding commitments associated with implementation of the national islands plan, with a broader, more general overview of the Rural Affairs and Islands portfolio. I will initially update members on our pre-budget scrutiny before concluding with comments on the budget. As I mentioned in my opening remarks, the committee specifically focused on the funding commitments associated with implementation of the national island plan, which is supported by the island's capital programme funding. The Scottish Government stated that the aim for the island's programme is to help to fund critical and transformational infrastructure projects while addressing pervasive problems for island communities. The Scottish Government's 2021 programme for government included a commitment to invest £30 million over five years, but at the time of our pre-budget scrutiny, there was no specific island plan capital allocation for £24.25. The committee recommended that levels of funding should be maintained in line with the commitment that was made in 2021 for the Government. We now note that £4.3 million capital funding for the island programme and the carbon-neutern islands project has now been announced for £24.25. However, most of our scrutiny is centred on the capacity and the funding of the island programme and the programme's ability to make the critical and transformational infrastructure projects address the real challenges that are faced by our island communities. Challenges such as the disproportionate impact of the cost of living crisis, which the Shetland Islands Council suggests are 20 to 65 per cent higher for island communities than the United Kingdom average, fuel poverty and, of course, depopulation. The cabinet secretary emphasised that no single intervention would address the issues of depopulation in that support for island communities straddled multiple portfolios. The island plan, along with its 13 strategic objectives and associated funding, will shortly be reviewed and the committee will want to see clear evidence of the benefit of these critical and transformational infrastructure projects within island communities. Turning next to the budget published in December and the cabinet secretary's evidence to the committee in January, the first thing to note is that the Royal Affairs and Land Reform and Islands budget is the portfolio with the largest percentage reduction in capital and resource budget, a 7.8 reduction in cash and a 9.3 reduction in real terms. We heard from the cabinet secretary that the Scottish Government has had to take difficult decisions and make very difficult choices. The committee sought reassurance that the budget reductions would not impact negatively across the agriculture, fisheries and forestry sectors. The cabinet secretary provided some clarification of where the Scottish Government anticipated being able to meet the current demand despite budget cuts. The committee will continue to keep a close eye to ensure that on-going spend can deliver stated ambitions. We were told of the return of £15 million to the portfolio, however welcome that might be, it should be noted that this is only a fraction of the £61 million taken from the portfolio as part of the 2022 emergency budget review. We also heard from CONFOR, the confederation of forestry industries, that 32 million or 41 per cent of the budget would be cut for woodland grants. Now that would, we're told, it was devastating, meaning that tree planting targets would not be met in addition to the resulting impact on climate change targets. It would also lead to job losses, the destruction of millions of trees, and a blow to the sector confidence that will take a long time to recover from. The cabinet secretary conceded that this was particularly disappointing and highlighted some of the work being done to move forward. I should say that forestry is a policy area that the committee has only recently taken on, but it's clear that this is an area that we will need to monitor closely. A pre-budget scrutiny looked at the level of funding for developing science and technology and the marine sector, and we welcomed the cabinet secretary's response setting out her intentions to make science and technology funding one of the top priorities of the marine directorate. The committee looks forward to hearing more about how this commitment will improve the scientific evidence base to inform fisheries policy, particularly inshore fisheries. We look forward to further discussions around funding available for marine science and technology with the cabinet secretary in due course. Finally, in relation to the marine directorate, the cabinet secretary told us that one of the reasons for the cuts in the budget was a result of the decision not to proceed with the highly protected marine areas. The Health, Social Care and Sport Committee recently concluded its pre-budget scrutiny for 2020-24-25, and the exercise has highlighted several important themes as being key areas for the Scottish Government to work on over coming years. The first of those relates to multi-year budgeting. Many respondents to the committee's call for written views highlighted that the current model of single-year budgeting hampers the delivery of services and stands in the way of transformative change required in the sector. Following calls from the committee for the Scottish Government to bring forward its refreshed medium-term financial framework for health and social care, I wrote the cabinet secretary's commitment that that will be published in the spring. I reiterate the committee's request that that provides more detailed analysis than was previously set out in the medium-term financial strategy or the resource spending review. In previous years, the committee has highlighted concerns about the availability and accessibility of data related to health and social care spending, and the Scottish Government subsequently gave a commitment to make progress in that area. However, the committee has heard evidence of on-going issues with data and the challenges that this creates in measuring and reporting on progress towards meeting-defined budget and policy goals. I welcome the cabinet secretary's response to the committee's pre-budget scrutiny letter, which sets out a range of data currently available to support decision-making, analysis and scrutiny, and indicates that there is on-going work to improve availability and accessibility and to improve transparency. The committee's pre-budget scrutiny highlighted the importance of the NRAC formula in determining levels of funding to be allocated to individual health boards in Scotland. In his response to the committee, the cabinet secretary confirmed that work to review the formula is under way, but that will take time to complete. We also heard concerns from Audit Scotland that a number of Scotland's 14 territorial NHS boards may not be able to break even by the end of the latest three-year financial planning period, as they are currently required to do. It would be helpful to receive some reassurance from the Scottish Government today that robust contingency plans are in place to deal with such an eventuality. The cabinet secretary also told the committee that the level of co-operation between boards to reduce costs, particularly on-shared services and functions, is variable. The committee would be grateful if the Scottish Government could keep it updated as data becomes available and how it is encouraging further co-operation between boards and how effective that has been. The committee heard evidence that workforce capacity remains the biggest risk to recovery of NHS services after the pandemic. There is equally a concern that any committed increases in the health and social care budget may be consumed by recent and welcome pay settlements that have avoided strike action by health care staff in Scotland and the impact of inflation. In that context, I welcome the update from the cabinet secretary that progress has been made towards reducing NHS Scotland's reliance on agency staff. As the sector's most important asset, it is vital that we retain a focus on getting the best out of that workforce, including the use of innovation to free up capacity while ensuring that health and wellbeing of that workforce is consistently and proactively supported. Issues related to preventative spend have been a recurring theme for the committee and its financial scrutiny this session. Evidence submitted to the committee has highlighted the significant challenges of moving towards a preventative approach to health and social care spending in the context of acute short-term demand for services. The cabinet secretary also made the point during the committee's budget scrutiny session that, against two key measures, performance has been moving in the wrong direction, namely mortality rates are increasing and health inequalities are widening. Those are areas where a reinforced focus on preventative spending could have a real impact in reversing that negative trend. We acknowledge that, in the space of severe budgetary pressures at the current time, maintaining a focus on prevention is going to be a huge challenge. However, for the long-term sustainability of health and social care services, we should not let that weaken our determination to keep that focus. Many submitting evidence to the committee argued the case for initiating a national conversation to involve the public in discussions around the future of health and social care in the context of increasing demand, demographic change and finite budgetary resources. I welcome the cabinet secretary's acknowledgment in responding to our pre-budget scrutiny letter that, although the Scottish Government is committed to ensuring the fundamentals of Scotland's NHS, it does not change that reform is required. Furthermore, the committee received oral and written evidence that highlighted significant shortcomings in linking health and social care spend to specific outcomes. Based on the evidence that it received, the committee asked the Scottish Government to address how it intends to shift away from a focus on short-term targets and towards a long-term outcomes-based approach. In response, the Scottish Government highlighted its care and wellbeing dashboard as providing a framework to drive progress towards a common set of long-term outcomes. In its updated format, this is a welcome innovation. As part of the annual budget process, it would also be helpful to be able to map progress towards these long-term outcomes against health and social care spending. The committee would also welcome a debate as part of the forthcoming five-year review as to how the national performance framework can be reformed to become a more effective tool to support strategic outcomes-based policy-making and spending in the areas of health, social care and sport. In conclusion, the health committee's scrutiny of the budget 24-25 has again highlighted some of the key challenges that we need to confront to place health and social care spending on a more sustainable footing for the long term. I and my fellow committee members will look forward to continuing to scrutinise to what end the coming year's budget is meeting those challenges in the months ahead. I refer members to my register of interests in that I hold a bank nurse contract with NHS Greater Glasgow and Clyde. I welcome the opportunity to contribute to this afternoon's debate as chair of the Scottish Commission for Public Audit. One of the commission's main roles is to scrutinise Audit Scotland's budget proposals and report to Parliament on them. Last Friday, we published our report on Audit Scotland's budget proposal for 2024-25. Audit Scotland's budget comes from two sources—the fees that it charges to audited bodies and funding that comes from the Scottish Consolidated Fund. In our report, we noted that Audit Scotland's budget proposal represented an overall 8.4 per cent increase on the funding required from the Scottish Consolidated Fund from last year's budget. The commission met in December last year to consider Audit Scotland's budget proposal, specifically the £13,229,000 of funding required from the Scottish Consolidated Fund. The 8.4 per cent increase represents an additional £1,029,000 from last year's budget. Of the 8.4 per cent proposed increase, we heard that costs relating to Scotland's participation in the biannual national fraud initiative made up 1.9 per cent, and the cost of delivering non-chargeable audits to organisations such as the Scottish Government, Environmental Standards Scotland and Consumer Scotland made up another 1.8 per cent. While we understand that only 4.7 per cent of the total increase is within Audit Scotland's direct control, we raised concerns at the level of the overall increase, particularly in the context of the significant pressures on Scotland's public finances. Audit Scotland is unable to carry reserves, and any budget remaining at the end of the financial year is returned to the Scottish Consolidated Fund. However, this leaves very little time for the money to be reallocated and spent effectively before the end of the financial year. Given the significant and on-going pressures on Scotland's public finances, we sought reassurance on the robustness of Audit Scotland's proposed expenditure and efficiency savings, as well as noting its focus on productivity and efficiency. In our report, we asked Audit Scotland to apply more focus in future on ensuring that accurate financial planning is undertaken at the outset of developing its budget proposal in recognition of the fiscal constraints across the public sector. Audit Scotland's budget proposal also sets out plans for its audit modernisation project. The budget proposal states the importance of ensuring public audit is, I quote, efficient and effective both now and in the future. Year 1 of the audit modernisation project, which is 2024-25, is expected to cost £148,000. That will be funded through internal efficiency savings. We heard from the Auditor General for Scotland that audit modernisation will be a significant factor in future budget proposals for the next three years, but at this stage of the project, any future cost estimation would be speculative. Our report draws Parliament's attention to our plans to strengthen our scrutiny and challenge function in relation to Audit Scotland. As part of this, we plan to hold additional informal meetings on emerging priorities, and we have identified the audit modernisation project as just such a priority. We also plan to review the timetable and written agreement for the submission of Audit Scotland's budget proposal to ensure that we have sufficient time to fully examine and discuss the detail of the proposal with Audit Scotland prior to its formal submission. The final budget allocation for Audit Scotland is, of course, a matter for the Scottish Government, but, in closing, I draw the attention of the Parliament to the conclusions set out in our report for steps to be taken in future. We expect, in future years, to see more evidence from Audit Scotland and how it plans to achieve efficiency savings and avoid underspends. We also set out the steps that the commission itself plans to take to strengthen its scrutiny and challenge of Audit Scotland on those matters. Thank you, Presiding Officer. Only this week, the IMF reset their predictions for the UK economy. They predict the UK to be the second worst performer in the G7 this year and the joint third worst performer in 2025. We have, in essence, and reflected in our report No Growth over the course of 2023. A response to the dire performance that the UK Government was made in committee from the Office for Budget Responsibility. The real spending power of Government departments in England goes down by about £19 million over the forecast period. If those spending plans are sustained, there will be fewer real increases in Barnett consequentials. In other words, we have to expect further cuts in Scotland's budget. The context that we are discussing today exposes yet again the fundamental weaknesses and uncertainties that are involved in operating within a framework of UK dependency. The only way of fully addressing public sector funding pressures, particularly in the absence of appropriate borrowing powers, is to maximise efforts to create long-term sustainable growth. The UK Government economic failure has profound implications. I deeply regret and have spoken often about the cut in the capital budget. That regrettably has led to the Scottish Government making cuts to affordable housing. We understand that the investment in housebuilding has such positive benefits, not least in terms of growth. We also know that the Joseph Rowntree Foundation has described cuts as brutal in the context of the housing situation in this country. I absolutely appreciate the difficulty that the Cabinet Secretary for Finance has been placed in by dependents in the UK, but I hope that that proves to be a short-term cut. As soon as possible, it must be fully restored and the impact on the Scottish Government's commitment to complete 110,000 affordable homes by 2032 minimised. We know that a lack of affordable homes leads to rises in homelessness, poverty and as negative impacts on health and education. Another area that is considered in committee and important for long-term planning is the opportunities that are presented from offshore wind. Over 2022 to 2023, more than £756 million was raised from leasing of seabed rights from offshore wind farms. I did notice the view of Professor David Bell that such funds should be regarded as an equivalent to a sovereign wealth fund that should be used to support future generations. He explained, and I quote, that, to be equitable, it should not only be spent on the generation that has been lucky enough to have that revenue gathered. He also agreed with the suggestion that fiscal rules should be applied to protect the funds, and I was pleased to see that included in the report from FPA. I understand and totally empathise why the Cabinet Secretary for Finance took a different view and focused on revenue spending, but I think that we need to find a way to give some priority to future generations and our future economy and society and critically enabling growth. My last comment concerns public administration and the need for reform is overwhelming. I absolutely sympathise around its complexity, its expense, its time consuming, its populated by vested interests and so on, but the landscape is beyond cluttered and has to be reduced. I do not have my glasses today, so I cannot read what I have written. I suspect that, over too many years, the solution has been seen to create a quango, a commission or whatever, and now we have a real problem that needs to be solved. The cabinet secretary has faced an enviable task, and I think that she deserves our support, not just now but in the future, in navigating through extremely difficult circumstances. Thank you, and I call Liz Smith to be followed by Ross Spear. Thank you, Presiding Officer. I do have my glasses. Could I welcome this budget report as well as thanking the clerks and indeed our special adviser? I think that the convener deserves considerable credit for his very level-headed focus, indeed his award-winning leadership of the committee, because that has helped us along the way, considerably. It is an important report, not just because budgets are always important, but the circumstances are difficult, obviously. There are on-going difficulties from inflation, from increasing volatility with global relations and, of course, the knock-on effect on trading route supply chains, etc. Next week, on stage 1, we will take our party political stances on the budget, setting out our different perspectives and how we would cost that. Today is all about setting out some of the issues that have arisen not just within the finance committee but, obviously, within the other committees, the leaders of which have spoken this afternoon. Central to all of that is the very desperate need to raise an increasing amount of revenue, but also at the same time to improve productivity, economic growth and to address the economic connectivity, which is definitely at a worrying level. The committee therefore believes that the Parliament should be fully focused on policies that will encourage more people back into the labour force, which in turn raises questions about economic structures and public sector reform. The conclusions about that in our report are very clear, given the extent of our concerns in that regard. We should note at this point that it is the common view of so many economic commentators and of key business groups that Scotland is in desperate need of many more highly paid jobs. There are encouraging signs in the energy sector, green technology, gaming and financial services, but we need to address the other sectors and to ensure that there is a just transition for oil and gas, but it needs to be properly supported too, given that it is so important to the revenues that we bring in. However, the other very significant tension, which has been the major focus of the committee's scrutiny, is taxation and the associated behavioural changes. Committee colleagues will agree that there is some very worrying data presented to us by the Scottish Fiscal Commission and other forecasters that current tax policies, while increasing revenues in the short run, which they have, are likely to have detrimental effects on consumer and business behaviour. We are very interested in the modelling of that, which, to date, does not appear to have been undertaken. The committee is also very mindful about the issue of longer-term planning, strategic planning, that is, and the Scottish Government's prevarication in this respect. The huge rise in predicted future spending for health and social care and social security demonstrates the scale of the black hole that is facing the Scottish Government in the years ahead, and inevitably that raises interesting questions around the fiscal framework. I thought that Arianne Burgess made a very important point earlier on this afternoon. It is not just about the fiscal framework between the UK and Scottish Governments. It is also about a fiscal relationship between the Scottish Government and local authorities and, when it comes to that, we really would like to see progress on a three-year funding basis. The convener has rightly raised concerns about the timescales for public sector reform and the lack of detail given what was previously announced by the Scottish Government. That is a very important point, given the significant implications for budget planning and, indeed, for forecasting. On the same note, we have an issue about the extent to which public sector paydeals will affect the forthcoming budgets, both for 2024-25 but in on-going years after that. There is the capital issue, and that is important. Michelle Thomson was right to speak about that, because the UK Government has got problems with that, as well as the Scottish Government, and no doubt we will have more debate on that next time. I will end with the forecasting issue, because I think that the committee would welcome assurances from the key stakeholders. The Scottish Fiscal Commission, the OBR, the ONS and the HMRC are working as closely as possible to provide all the detail that is so important to the finance committee and, indeed, all the other committees of this Parliament for effective scrutiny of how the Scottish Government raises its revenue and how it spends taxpayers' money. The budget was set in a more difficult context than in any that we have seen so far in the devolution era. As the committee noted at the start, we went in with a £1.5 billion gap in our public finances—a huge cut to the capital budget, 10 per cent by the measure that the Scottish Government uses, 20 per cent by the measure that the Fiscal Commission uses, but also a deeply dysfunctional process, particularly at the end of the process where we have this mad dash for a couple of weeks between the UK autumn statement and the publication of the draft Scottish budget. Even with regard to that, a budget should reflect a Government's priorities. It should make it clear what a Government believes in. Indeed, that is the first line of the Deputy First Minister's forward to this budget document. The Scottish Government outlines its three priorities and three missions as equality, opportunity and community, which are all very agreeable, but I think that there is a bit of a problem there if they are all so agreeable. What does not meet one of those priorities? Priorities imply that there are other things that are not priorities. That is good—that is necessary when you have a budget that does not stretch far enough. I want to highlight some examples of what I think are high-value areas of spending that are aligned with those missions. In contrast to what was said about my party an awful lot, there are lots of things that the Greens want to see grow. We want to see more high-quality, lasting jobs in green industries, for example, preferably in businesses that are owned in Scotland, even more preferably in businesses that are owned by their workers. We are proud of the fact that that is happening in Scotland. Around the same time as the draft publication of the budget, the Fraser of Allander Institute report showed that, in 2021, we went from 27,000 to 42,000 jobs in green energy. That trajectory should continue with new measures such as what was in the national planning framework for shortening the decision time for onshore wind applications and creating that certainty for businesses in the sector. However, the budget includes £67 million for the offshore wind supply chain. To me, that is spending to seize opportunities. It is very much aligned with that mission. Those jobs that we created will add to the tax base, continuing the positive trajectory that we have seen for tax revenue in the last couple of years after a difficult period losing similarly high-paying jobs in the oil and gas sector in the years previous to that. Alongside the solar targets that the Government set out and other measures, I think that that will continue seeing jobs growth in a really important sector for our economy and strengthening the tax base. Edward Mountain for the net zero committee mentioned the real terms uplifth for NatureScot and SEPA's budget. Obviously, it is a green. I am pleased to see that. However, the chief executive of NatureScot Francis Zuska mentioned that the finance committee said, I quote, I see in the budget a shift towards recognising the long-term challenges of climate change. So there is alignment there with that mission. I contrast that alignment with the note that the finance committee report makes on the council tax freeze, not aligning with the equality mission. The £140 million that is not aligned with the mission is no small amount. Again, there is a contrast there. That is £140 million. There is a billion pounds more going into the social security budget. That is a clear demonstration of the commitment to the equality mission to continue the progress that is made this year in lifting 90,000 children out of poverty. However, we need to be upfront about the implications of that. We all agreed across all the parties that it was necessary to upgrade social security payments in line with inflation, but clearly that outstrips the Barnett consequentials available, and that money then has to come from elsewhere. That is a priority. The Scottish Government has chosen to prioritise supporting the most vulnerable with the support of all of our Parliament, but we need to be honest about what the implications of that are. There are mostly reasonable demands for spending elsewhere, a lot of which we have heard this afternoon, but that is not possible when you have chosen what to prioritise within a limited budget. I have highlighted climate and child poverty as spending examples, because those are two areas that are linked to statutory targets. Again, we are agreed by all parties in Parliament. If we cannot prioritise everything, we certainly must prioritise those. We have a legal obligation to do so, and that will be at the expense of other areas of the budget, something that we need to be far more honest about and to create more space in Parliament outside what is obviously a very politicised budget process after this point to do so. I hope that the Government will take the opportunity to hope more debates outwith the budget process on Government time for us to air those longer-term issues. Thank you very much. Unlike Liz Smith, I will not start by praising the convener of the finance committee. He has got quite a hyphen in enough of himself already. I thank you for the opportunity to speak, and I realise that today is primarily for conveners to put forward their committee's angles on the budget. However, it is good that the finance committee members get to contribute as well. There are a lot of angles on the budget, so I can only touch on a few. Firstly, the tremendous increase for social security from £5 billion to £6 billion. That is unmatched in other parts of the budget, and it is partly because it is demand led and possibly harder to limit. However, I would suggest that it is very necessary, both the Scottish child payment and the adult disability payment, if we are serious about tackling poverty and inequality going forward. However, we will need to carefully consider how this budget grows, as the Scottish Fiscal Commission has suggested it might. Secondly, one suggestion from witnesses has been whether the Scottish child payment could be increased even further. It is widely accepted to be one of the Scottish Government's greatest successes and has had a real impact on child poverty. It is worth seriously considering whether the council tax freeze costing some £144 million or a further increase in Scottish child payment would be more effective in supporting households in poverty. Some organisations active in that sector certainly argued that a council tax freeze tends to benefit the well-off more. On taxation, Liz Smith painted a slightly gloomy picture on possible behavioural change, and we have had different kinds of evidence at the committee, whether raising taxes will put off both organisations and individuals being in Scotland. However, we should remember a few other things. A mortgage in London is likely to be £8,000 per annum more expensive than in Scotland. There quality of life here is better in many regards, for example no student fees. At a bigger picture, the UK tax level, in my opinion, is too low to sustain quality public services. It is currently some 38 per cent of GDP going to tax and public services, which is much lower than countries like France at 47 per cent or Belgium at 53 per cent. Link to tax are the anomalies between the UK and the Scottish systems, especially around national insurance and personal allowances. That is pointed out in our report at page 11, but the Scottish Government indicated that the UK Government has not been willing to engage. It seems to me that we can only have a proper joined-up and logical income tax system if the full system is devolved, including national insurance and personal allowances. Public service reform has been mentioned by others and has been a theme that the finance committee has considered over a period of time. I think that we realise that it is a tricky area and there could be losers as well as winners. However, we do not think that there should be procrastination on that and would like to see clear and definite plans as soon as possible. Specifically within that is the issue of the increasing number of commissioners and other office holders. The SPCB's role is clearly and correctly to ensure that commissioners and others have the resources to be able to undertake their functions effectively. We agree with that. I think that the finance committee, however, has concerns about the growing number of commissioners and whether resources are being diverted away from front-line services. That is why the committee will be carrying out an inquiry on that topic. Another theme throughout the budget process has been whether or not we need to wait for the Westminster spring budget before setting out more longer-term plans, for example an updated infrastructure investment plan. I accept that we need to get the balance right in all of this. We are very dependent on Westminster budgets and other decisions. The more information we have, the better. However, I fear that there is almost always uncertainty coming down the line, and we need to plan ahead even if those plans have to be changed later on. My seventh and final point would be around non-domestic rates. There have been calls for us to copy England on hospitality and give greater relief to businesses across the board. However, we know that some parts of hospitality are doing extremely well and do not need Government support. Therefore, I agree with the Scottish Government approach of targeting support where it is most needed, for example for the islands. Sure, in an ideal world with less limited finances, we could do more, but we have to choose priorities. If Opposition parties think that those priorities should be different, they need to tell us where to spend more and where to spend less. I am sorry, I am finished. I now call the final speaker in the European debate, Jamie Halcro Johnston. I join my fellow committee members in thanking our clerks for their work in putting together this report. I advise Professor Mary Spowage for her guidance, which is particularly helpful for myself as a relatively new member of the committee and the witnesses who gave their time and expertise and a spice for their support. During our scrutiny of the draft budget, I focus largely on how it might impact on rural and island communities that make up so much of my highlands and islands region. That, of course, does not mean just looking at the rural affairs budget in isolation, but at all areas where decisions may have consequences. In our evidence session with the Deputy First Minister, I listed the various budget lines where cuts have been made and my concerns over the impact that this could have on our rural and island communities, concerns raised by Fin Carson in his contribution. I recognise the Deputy First Minister's response that the Scottish Government has tried to prioritise the sector's priorities within a tough budget, but that in itself leads me to how decisions are made and the transparency of that process, an issue raised by some of our witnesses and highlighted by our convener, Kenny Gibson, in his speech. While the budget shows us where funding has been reduced or ended, we found that there was little explanation of why those decisions had been taken. One example of that is in relation to reductions to the housing budget, which has been mentioned earlier. Another, and one highlighted by the Fraser of Allander Institute and again by Fin Carson and Edward Mountain earlier, is in the forestry budget, which, having seen a significant increase in last year's budget, saw a significant cut this year. In our pre-budget report, the committee recommended that the Scottish Government sets out explicitly any areas of spending that it has assessed as not meeting its three missions test and where funding will, as a result, be reduced or ceased entirely. However, we remain unclear just how the Scottish Government has assessed its decisions in line with its priorities, so the committee agreed that it would be helpful to have a more detailed explanation of how those decisions are reached and of the trade-offs that the Scottish Government has to make in taking those decisions. That would be of interest in relation to the cuts in some of the key drivers of economic growth. The committee was unclear on how reductions in the budget to further and higher education, to enterprise bodies, including Highlands and Islands Enterprise in my region, and to employability would deliver the economic growth that most of us agree is so vital. While I recognise that Deputy First Minister expects enterprise bodies to focus on their priorities, they will have to do so with decreasing support. It will be important to know how the Scottish Government intends to assess any impact on economic growth, and I look forward to that information being provided to the committee. If I can turn briefly to council tax, particularly the impact of the proposed freeze on bills, witnesses highlighted that it will impact councils differently. The Fraser of Alland Institute highlighted the example of Orkney Islands Council, my own home council. Council leaders in Orkney are considering a 10 per cent increase in council tax, but if agreement is reached between the Scottish Government and COSLA to only compensate for a 5 per cent increase next year, councils like Orkney risk being left short. In contrast, councils that may have looked to only increase their council tax bills by less than 5 per cent would, as the Fraser of Alland Institute made very clear, gain from that approach. There are risks being winners and losers from many council tax freeze, and the committee noted that any freeze does not expressly target those in poverty questions how the policies in line with the Scottish Government's own stated plans to prioritise spending delivering on its three missions. There is only so much that can be covered in a four-minute speech, and I hope that colleagues from across the chamber would ensure that the key concerns and recommendations that are included in our report are raised today, and, most importantly, that the Scottish Government takes them on board. Thank you very much, Presiding Officer. I begin by thanking all speakers, but particularly the committee conveners who have contributed to this debate, which has been largely consensual, although Liz Smith struck a bit of an onimous tone when she reminded us that that might be quite different when we come to stage 1 next week. Let's keep on the consensual tone while we have it. I guess, as anticipated, as a general comment, and then I'll come to the specifics that people raised, I think that, as anticipated, and we'll probably see more of this through the other stage 1 and the other stages of the budget debate, that the focus is inevitably, by and large, going to be on where budgets are reducing rather than where they are increasing. Of course, that is inevitable that we are going to have to reduce some budgets with less money, difficult choices having to be made. Not everything can be funded, and therefore we have tried to ensure, by and large, that the funding and decisions and priorities that are made are following those key missions. That brings us to some quite difficult choices. Clare Baker, in her contribution, talked about some of the issues raised by the hospitality sector, and it is no doubt that the hospitality sector, who incidentally have had quite a lot of engagement with ministers. I met them recently. Tom Arthur has had on-going engagement with them, but their ask, understandably, would be that, out of the £310 million of consequentials for £24.25, the £260 million of that would flow through to business rates cuts. However, in looking at that from a Scottish Government point of view, that would have meant less money for the NHS and other front-line public services, which I was very upfront with the sector about when I met them. Those are difficult choices, and we have to make those difficult choices, not out of any lack of respect for any sector, but because we have to focus on the priorities and outcomes. For me, making those choices in collaboration with colleagues funding front-line public services had to take priority in difficult times now. We will continue to discuss with the sector around how we can look at supporting them going forward in a way that is affordable. I want to make one other general comment before coming to some specifics. A lot of people have mentioned quite rightly the challenge that capital budget reductions are going to have, not least in respect of the housing budget, for example. I reiterate my commitment to look at that as a key priority. I talk about the 10 per cent reduction, and I take into account the comments made by the committee convener about the different analysis of that, but let's stick with the 10 per cent reduction for the moment. In real terms, in terms of money, it's worth just reminding the chamber that that amounts to £540 million of a cut a year in the lead-up to £27.28 million. That's a cumulative reduction of £1.6 billion. If you think about what that means in reality, that is the replacement of a large hospital. It is half the affordable housing budget. It is numerous areas of capital spend. It would purchase a lot of trees in terms of tree planting, and so on. The reason I make that point is that, for public consumption, apart from anything else, sometimes when we talk about a 10 per cent cut in capital budgets, what does that actually mean in reality? 1.6 billion is what it means in reality, which is why one of the key asks that I made to the chief secretary of the treasury, who is, I hope, in listening mode—we had a very constructive meeting—is the same ask from the Welsh and Northern Irish—is what has to revisit that decision at the spring budget. I guess that's why the infrastructure investment pipeline is difficult to not wait until the spring budget. Frankly, if we get some movement on capital, which I really hope we do, then, of course, that will have a major impact on what we are able to fund in that pipeline going forward. I guess that's why the sequencing of timing around these key decisions is so important. Let me turn to some of the comments in the remainder of time that I have. The convener has always set out some of the key issues that we are facing—the issues around data, tracking, some of the issues of behaviour and the HMRC analysis and work that they are undertaking will be very important in the space. As I have said before, it is of benefit to the Scottish Government to be able to have the evidence in front of us from all sources about the impact of some of the decisions that we make. I would say that we still have a positive net in migration to Scotland, people of working age making the decision to come and live here. However, we take the comments of the Scottish Fiscal Commission and, indeed, the committee's deliberations on that very seriously. Members mentioned the issue of the long-term fiscal sustainability. We will very much come back to that. My suggestion is that we align that longer-term debate with the next medium-term financial strategy in May, but I am open to discussion with members about the best timing for that, but I can give a commitment to revisit. Claire Adamson, on behalf of culture, talked about innovative funding solutions and cross-portfolio working. In difficult financial times, we have to be imaginative about how we use the collective funding that we have, and we need to get out of silos. That is not just in the culture sector, it is across the board. Sue Webber made some interesting points about the additional operational flexibilities. I think that there is a requirement on Government, on ministers that when times are tough, we maximise some of those flexibilities in the college sector and elsewhere. We are also clear about our priorities. If there is less money, whether it is in our enterprise agency or any other body, we have to be very clear about what our priorities are. Not everything can be a priority, and we cannot ask organisations to do more if budgets are stretched. We have to be really clear, and that is a fair point. I also agree about outcomes being more important than inputs. Of course, the harsh reality of political discussion around teacher numbers, for example, then comes in to the arena. The more we can focus on outcomes across the board, the better, but it runs up against quite hard political discussions in this place. Clare Baker mentioned the comments that she made about the NDR choices, so I will not labour that point. Ariane Burgess talked about the fiscal framework and the progress that has been made. I think that that is very important for local government. We may have our differences around council tax freeze policy with COSLA, but where we agree is that going forward the local government fiscal framework will be really important in making sure that we help local government on to a more sustainable footing going forward. Co-Cab Stewart reminded us of the importance of equality in all of our budget setting. Edward Mountain reminded us of some of the importance around our net zero ambitions, and of course, despite the reference to some of the budget corrections in the annex, of course, the overall £4.7 billion remains a commitment in terms of the positive action on climate change. I thank the cabinet secretary for giving way. Actually, Annex J is the one in question, and I just wanted to see if the cabinet secretary could address when the committee might get that. We were told later the day when we were discussing it, not received just yet, Cabinet secretary. I will follow that up as a matter of priority and make sure that we get that to the committee as quickly as possible. I think that it is imminent, but I will double check that once this debate is over. Stevenson talked about the importance of the funding that we are investing in the Scottish child payment in social security as a whole, and I remind us of that key mission to reduce poverty. It is a huge investment, and there is a question for us going forward around making sure that that investment—I think that John Mason made this point—is about the sustainability of that, and we have to consider that as part of that longer-term horizon. Claire Hawke talked about multi-year budgeting. Her request was about the contingency plans for health boards and the requirement for sustainable footing. We have commissioned three-year plans from NHS boards up to 26-27 for that very reason. Given the level of spend that our boards deploy, but also the pressure—not least pay pressures—we have to support our health boards to make sure that they can deliver what we are asking them to. I thought that Michelle Thomson made some excellent points and reiterated the IMF comments, which I think are pertinent and timely. The restriction of levers that we have and our dependency on UK Government decisions, funding decisions in Whitehall, and the consequences of that. She talked about reform absolutely crucial, the decluttering of the landscape, absolutely, and we are determined to play our part. There is a parliamentary element to this, of course, which, again, I think that John Mason referred to. There might be space for cross-party working around this, and it does not become a bund fight about which organisation should continue or not be formed. I think that there is a recognition that, collectively, we need to pause to think about the number of commissioners and the number of public bodies. I am certainly up for that discussion, if others are. Liz Smith was very complimentary of our award-winning finance committee convener. I am not sure whether that will continue, but I think that the point is that we have an opportunity around some of the things that we agree on. We disagree on lots, but there are things that we cannot agree on to try to create some of that space to work together around those areas. Ross Greer reminded us of not everything can be a priority and that we need to be clear on why areas are and why areas are not. I take that challenge on board. Cabinet Secretary, I must conclude. He pointed to the importance of the investment in green energy, the £67 million investment in the offshore wind supply chain, which is part of a £500 million ambition going forward. Just finally, on the comments that John Mason made, he challenged us around the need for evidence to look at some of the decisions that we make around the social contract and the importance of that. The complexity of a taxation system that is a hybrid system and the need for complete devolution of the tax system is something that I agree very much on. I look forward to further engagement over the next three weeks. I now call on Michael Marra to wind up the debate on behalf of the Finance and Public Administration Committee. I am happy to start this as deputy convener of the Finance and Public Administration Committee by setting up my appreciation for all of my colleagues, not setting out anyone in particular. I have to say the expertise that they bring to our discussions and the very collisionate nature in which we have those discussions has been. I greatly appreciate it. I thank all members who have contributed today to a very useful debate to get insights into the work of the various committees around what is a very challenging budget for the Government. There are clearly some areas of common interest and themes across committees that I will touch on some of them. I would ask the Scottish Government to reflect and make greater progress on those issues that the Cabinet Secretary has already committed to doing. I would highlight those, including enhancing transparency and accountability, a very key concern of our committee and look to provide more explanation around decision making and avoiding slipping timetables for the deliveries of programmes and strategies, which has too often been the case. I think that the latest example of this is that the Scottish Government is committed to providing outturn figures by the end of January—I believe that we are into February—and we still have not seen those as a committee. I know that tax returns were being completed in the last few days, but it would be good to see those figures in front of Parliament. As well as touching on contributions today, I will talk a little bit about a focus on public service reform, which is a key element in our pre-budget report. My colleagues on the finance committee have set out some of the broader economic challenges that we face as a country. Michelle Thompson rightly referenced the IMF's note of significant caution for the UK challenger in the face of downgraded growth forecasts. Liz Smith touched on some of the global situation, which impinges on that, with trade restrictions and conflict presenting unpredictable headwinds for the UK economy, as it seeks to recover from the unpredictable behaviour of Liz Truss and quasi-quarting, in part. That sluggishness certainly predates the catastrophic—sorry, sluggish growth predates the catastrophic mini-budget. The DFM has set out the capital challenges and the value of that cut. It is vital that we have a UK Government that is truly committed to growth in our economy. Kenneth Gibson started the debate by setting out the very long-term challenges that economy feels and faces, particularly around demography. That has been highlighted by the Scottish Fiscal Commission and its long-term forecasts and its work. Some of the challenges that we are facing in our budget are not unpredictable. They have been indeed predicted. I was struck by comments that I saw online today from Torsten Bell from the Resolution Foundation by moaning the explosion in dog ownership during lockdown, which he seemed to think was perhaps part of the cause of people deciding not to have children in the idea of having recalcitrant and misbehaving animals in the household. However, he will use an advising on that this is a very long-term trend that the UK is facing, and it is particularly pronounced in Scotland. The challenges in our tax base and funding our public services will continue into the future, and we need to grapple with that as a Parliament, as we have been doing in part today. We should also reflect a little bit on the approach that the Chancellor has taken in the autumn statement. We might anticipate in the budget statement to come in March. Frankly, he was reasonably well signalled in terms of the Chancellor who does not really want to reheat the UK economy, that he is particularly concerned about getting interest rates down. Again, that approach has been well signalled by the Government, whether some of us may agree with it or not, I think that the signals were clearly there. Ross Greer set out that a government, I think that in sightfully a Government for whom everything is a priority, has no priorities. I think that that is certainly the case. We have certainly structured some of this debate around the Government's missions that they have set out in terms of what they want to achieve from their budget. The conveners today have set out their own and the great wealth of evidence that they have taken from citizens and organisations across Scotland about what they want from the budget in front of them. I think that there is a theme in this about the lack of focus on growth in that. It is one of the missions that was set out by the Cabinet Secretary and by her Government. Claire Baker from the Economy and Fair Work Committee commented on that and the evidence that they had taken. Certainly, it is evidence that is reflected in front of us in the Finance Committee. There is a real concern that the Government really has not met its own challenge in stepping up to the plate about providing growth. Ariane Burgess talked about, and I think that that is a related issue from the local government housing and planning committee, about the cuts to affordable housing budgets. Certainly, housing and the provision of it is a key issue to making sure that we have growth in our economy, not just in terms of the provision of housing for families, but in the supply side of that, in terms of making sure that the supply chain is in our labour market. Collette Stevenson touched on the same theme on behalf of the social justice and social security. I thought that she painted a picture that was deeply worrying about multiple crises adding up to an emergency in the much of the evidence that she had taken and her colleagues had taken in that area. The Deputy First Minister set out in her first speech her sympathy for the call around the housing budget. She has also set out to the Finance and Public Administration Committee that housing would be the priority should more money become available. I am sure that that is a circle that can be squared in her negotiations with COSLA, which I will continue to be challenging that we have explored today. That need to find resource for local government, and the housing side of that perhaps is something that she can bring together into the one place. John Mason shared his concerns around the proliferation of commissioners. I think that we have great sympathies across the Finance and Public Administration Committee for that point that he made. We would all like to glad that that is on the record here today, and there is more work to come from our committee in that area. That takes part of its general perception and the general proliferation of public bodies in Scotland, Presiding Officer, and part of the key question of public service reform. That broad theme of reform, I am aware, is something that many of the committees represented today are looking at specific issues and instances of reform—justice reform, national care service, education reform, and so I intend to close my remarks by focusing a little bit in that area, Presiding Officer. Our pre-budget report has expressed concerns that the focus of the Scottish Government's reform programme has, even since May 2022, changed multiple times, as have the timescales for publishing further detail on what that programme will entail. We have brought forward recommendations aimed to bring much needed impetus, focus and direction to the Scottish Government's reform programme to ensure successful outcomes can be achieved at a much quicker pace. The Scottish Government had previously agreed to provide six monthly updates to the committee, and the first of those updates was published alongside the Scottish budget in December. We asked that it included a clear vision and strategic purpose for what it wants to achieve with the programme, the financial strategy to accompany the reform programme that was committed to by the then Deputy First Minister in March 2023, and details of each work stream under the programme, including milestones for the delivery and clear measurements of what we would term success. It is clear from the update provided by the Scottish Government that it is at a much earlier stage around the reform programme than was expected, particularly given that it was an issue that was first described as a priority in the resource spending review back in May 2022. Of course, we can go back as far as the Christie commission in 2011 to see a blueprint about how some of that might have been delivered, but that was 13 years ago, and it is disappointing that such little progress has been made in the intervening time. The Government's update set out key aims and principles for a 10-year programme of public service reform and actions that it needed to take in the next one to two years to respond to immediate budget challenges to build a platform for ongoing change. Over the next three months, the Scottish Government does intend to agree a shared approach to reform with local government, public and third sectors, and the Deputy First Minister has set some of that out. Unfortunately, there was no mention in the update of the financial strategy that was intended to accompany the reform programme. In our budget report that we published just yesterday, we are asked the Scottish Government to revisit those recommendations, and I would appreciate if it would do so. That report also set out our concerns regarding the confusion that still appears to exist in relation to the Scottish Government's policy on public sector headcount and workforce levels, not least within the Scottish Government itself. In its response, the Government said that it intends to set out the pay metrics for 24-25 following the UK spring budget. That is the second year in a row, Presiding Officer. The Scottish Government has not published a public sector pay policy alongside the Scottish budget, and in time to be factored into the SFC forecast. The committee is disappointed at that delay. Given the significant rise in the public pay bill in Scotland, it is a key issue that the Government should address. The committee looks forward in the coming weeks to further engagement with the Deputy First Minister, the Finance Secretary and the whole of the Parliament as we address the budget ahead of us. That concludes the debate on the Scottish budget 24-25. It is now time to move on to the next item of business. There is one question to be put as a result of today's business, and that is that motion 12035, in the name of Kenneth Gibson, on behalf of the Finance and Public Administration Committee on Scottish budget 24-25, be agreed. Are we all agreed? The motion is therefore agreed. That concludes decision time, and I close this meeting.