 Fyelwch i ddweud â 1 ddwyd yn 2023 i gynhyrchu a'r Fyllwyr Fellydyn yr Aelodau Cymru. Fyelwch i ddweud â Llyfrgell Gwelligus Cymru i ddweud, ond wedi bod yn gychegi gyda cyfnoddau cydweithio, rydyn ni bod yn gyfamig ar gyfer yr Ysgrifennu Llyfrgell Cymru yn cyfnoddau Llyfrgell Cymru i ddweud. Fyelwch i ddweud yn gwychredig i ddweud â erbyn cyfnoddau ysgrifennu Llyfrgell Cymru. Mr Swinney is accompanied by Scottish Government officials, Alison Cumming, director of budget and public spending and Lorraine King, deputy director, tax and revenues directorate. I welcome our witnesses to the meeting. Members received copies of the Scottish Government response on Friday. Before we move to questions on committee, I invite Mr Swinney to make a short opening statement. Thank you, convener, and good morning. I would like to thank the committee for its budget scrutiny report, which I have carefully considered and responded to last week. As I have highlighted to the committee, the budget has been developed amidst very challenging economic and fiscal circumstances. It is a budget that focuses substantial resources to support family, businesses and public services in accordance with our three overarching strategic objectives in the budget. The committee will be aware that I am not proposing any amendments to the budget bill today and I am very happy to respond to questions from the committee on its report. Thank you very much for that brief opening statement. As is traditional, of course, I will start with a few questions and then we will open out the session to colleagues around the table. The first question relates to a question that I posed in the chamber in which you responded on Thursday, which was regarding the gap, the estimated overspend that we have. When you gave evidence about three weeks ago, I believe it was between £200 million and £500 million, and work has obviously progressed to reduce that to around £100 million. I have really got two questions on that. One, how have you managed to reduce that to the £100 million and what steps are being taken to try and eliminate it altogether between now and the end of the financial year? A number of steps have been taken, convener. Obviously, there is a constant revision of the estimates that are submitted to the central finance team in relation to the expectations about budget performance. Obviously, as time goes on, risks are addressed in those numbers and they are revised, so there will be revisions down in the estimates of overspend that come in simply because the passage of time is giving us more certainty about the likelihood of the delivery of the budgets in line with our expectations. That is the first factor. The second is that we are applying very rigorous scrutiny to any new spending that is undertaken, so there is a very detailed scrutiny process that, if necessary, ultimately comes to me for decisions as to whether or not programmes are approved and judgments are made there. Obviously, there are certain programmes that are being delayed as a consequence or items of expenditure being delayed as a consequence of all that. Thirdly, we are looking at the performance of individual items of budget volatility, whether that is about tax revenues, so there is a skew to expenditure as we assess what is the likely outturn to be the case. We still have that budget gap that I highlighted to you in the chamber last week, convener. On the further steps that we are taking to address the issue, all of what I have said continues to be applied on a very rigorous basis to get to the point where we are in a position to balance the budget. I assure the committee, as I have done in writing, of the very assidious efforts that are going on to do that, and every effort that will be made to ensure that that is the case before the end of the French year. For example, in some demand-led areas, there may be less demand than one anticipated. It could be that taxes are a wee bit higher also than was perhaps originally anticipated. What kind of projects have been delayed? What are we talking about here? At this stage in the French year, there will tend to be more minor aspects of public spending programmes that will be coming forward. We will look to take those forward as early as we possibly can do, and it may be that they have to run into the next French year to be commenced, but there will be a variety of different programmes across Government. Are those programmes, in some cases, moving the kind of amount of accounting that we will see into next year, but the projects are still continuing, or are they having delays to existing projects? We cannot move the accounting. I am just wondering if there is any kind of amount of money. I know that that is just not possible. I just wanted to clarify that. So the programme has to be delayed? Yes. The crucial point here is that if the activity expenditure is incurred in this French year, it has to be accounted for in this French year. It is the way that accounting laws operate. No, I was just really keen to get that on the record, because I know that we talk about how we always have to balance a budget, and I think that sometimes people think that we can just kick it into next year or whatever it happens to be. Obviously, if a project is delayed and is expected then to be delivered next year, then obviously that adds financial strain to next year. Those are the day-to-day judgments that have to be applied to make sure that we can bring the budget in anything. I may or may not wish to pursue that further. On taxation, there are a number of issues that we have raised as a committee in terms of taxation. So, for example, we looked at when the Scottish Government plan to publish a discussion paper on tax and spending choices. The rationale for the documents change the UK Government's many budget is gradually unwound. What is the rationale? Is it because of volatility at the moment? Or are there other factors that are giving consideration to that? The original genesis of a tax discussion paper was essentially in response to what was a very dramatic change to the comparative landscape on taxation as a result of the mini-budget in September. When I came to the committee, I indicated that I thought some further dialogue was required given the nature of the significance of the divergence that had been announced. As we all know, that did not last very long, so the necessity of that particular imperative moved on. The immediate urgency and necessity of that discussion was not apparent. What I have charted in my response to the committee is that to support our own decision making about the decisions that we took in the budget in December, we undertook an extensive amount of stakeholder discussion and dialogue. I chaired a number of panel discussions of a broad range of stakeholders to hear views. The Minister for Public Finance did likewise. Obviously, there is a whole variety of other discussions that take place around that. We had an extensive amount of consultation activity, but what we did not necessarily have was a consultation paper and a wide-open consultation in the fashion that colleagues would be familiar with. I think that there is a space and a place for us to embark on some longer-term discussions about taxation, so I would remain open to some of those questions that have been looked at in the future. However, the immediate urgency was driven by what was quite dramatic changes to the tax landscape, which, as we all know, did not last long. Obviously, in the area of taxation, we are concerned that there is a working group that includes representative causes being set up to consider proposals for many full changes to be introduced in the short term, such as increasing rates of council tax on second and empty homes, and the group will also consider approaches to long-term reform. When is the working group likely to report? What I am probably best to say is that the working group has started its activity. It is difficult for me to predict exactly when it will report, but we are anxious to make sure that early progress is made so that we can consider and take forward wider discussion with stakeholders about any implications, given the fact that this is material for the decision-making of local authorities in relation to council tax. I want that process to be as concluded as swiftly as possible, but it is difficult for me to give a definitive timescale for that, but I recognise the urgency of that work to be taken forward, and it is under way. Staying with council tax, the Scottish Government currently provides council tax relief. 450,000 households receive council tax reduction in an average recipient's save over £750 a year. My calculations are a Scottish Government investment of £337.5 million, roughly. If council tax increases substantially this year, do you envisage a significant increase in the Scottish Government's input into that? The council tax reduction scheme is essentially a reflection of changes that are undertaken within council tax, so there is the potential for those issues to be a factor with which we have to wrestle, but that is part and parcel of the volatility and income that the Government has to manage on an annual basis. One other thing that is very important in future Scottish Government policy and thinking is the issue of behavioural change. As you will know, the Scottish fiscal commission spoke to us and said that one paper that can have higher additional tax would raise £30 million, but, in reality, it would only raise £3 million because of behavioural change. Although it emphasises more, people are not working as hard, as opposed to, for example, moving south of the border in terms of their taxes, if they get more than one address. However, in your response, you said that the Scottish Government actually looked at this, and you said that the study found no evidence of significant behaviour change, including cross-border migration, as a result of the move to a more progressive tax system. I wonder how that sits with the Scottish Fiscal Commission, because it is saying that 90 per cent will be lost by a simple penny, which seems to me a very dramatic loss for a small increase, and yet the Scottish Government appears to be saying that, in fact, we do not really see this. In previous meetings with the committee, you have suggested that the Scottish Government is very aware of behavioural change, so I am just wondering where we are on this well-subject, which clearly needs greater exploration. How would you describe it, convener? I acknowledge the risk of behavioural change, so I am not sitting here in denial that it is not a factor. Our response is designed to say that, on the basis of what information we have seen, we have not seen evidence of people relocating for tax purposes, which is probably the best way that I would describe it. That does not mean to say that, although people are not relocating for tax purposes, there may not be a certain amount of behavioural change in the way that income is accounted for or arrangements are put in place. I think that those are two very different practices within tax planning. We are also, convener, quite early in the era of tax divergence between Scotland and the rest of the United Kingdom. There is not a lot of years of experience of this that have been the case. We have to be attentive to the detail. We have to be open about exploring those questions. In the policymaking space, we have to be conscious of the risk of behavioural change and of those implications into our consideration of what are the right, if any, tax changes to make. Obviously, the national care service is an issue that has had quite a lot of focus in recent days and weeks. The committee will be looking to scrutinise an updated financial memorandum perhaps towards the beginning of next month, if not at the end of this month. Obviously, concerns have been raised, including by members of the committee, in the chamber and beyond, about how much of next year's budget will be allocated to the national care service. I wonder whether he can enlighten us a wee bit on that. I do not think that I have much more to add to what I said to the committee when I was here last time around it. We have made provision in the budget for a range of measures in relation to the national care service, not least of which is the increase in social care payment rates, which accounts for a substantial part of the journey that we are trying to undertake on the national care service to increase the remuneration for social care staff so that that career is a more attractive proposition. Obviously, specific details about the delivery of the national care service will be linked directly to the financial memorandum that comes to the committee in due course. That will set out some of the further detail planning that is undertaken in this respect. I wonder if he will accept that there is an element of frustration in the committee that we will not get the financial memorandum until after stage 3 has passed. Members are keen to know how much of a commitment there is specifically to the NCS. Obviously, we know the size of the overall budget and there is more than £1 billion extra going into health and social care this year. However, it is that aspect of it that I think that there is a focus on. We heard in the chamber last week wildly differing figures of how much it will cost over the next five years partly because we do not have a real grip on the financial memorandum and exactly what it is likely to say. I wonder if any help in terms of parameters would be useful, minimums and maximums, for example. That is my point and my answer, convener, that the overwhelming majority of the expenditure that is envisaged in relation to the national care service in the next financial year will be in relation to the improvements to social care staff pay and the other, if I call them, the governance costs and the preparations for the service are very much the minority. The financial memorandum will, as that is redeveloped and you are asking me to commit that detail in advance of it being finalised within Government, which I am not in a position to do today. However, I think that what I have said to you about the balance of expenditure between the larger amounts on the social care remuneration and the smaller amounts on governance I hope helps the committee in finding comfort in this issue. I am sorry, Deputy First Minister. I am not really trying to get the specifics for the reasons that you have outlined, but what I am trying to do is get parameters on what is the minimum that might be likely to cost and what is the maximum that is likely to cost, which surely Government must be aware of at this stage in the budget process. I think that the maximum cost in terms of the next financial year is likely to be a figure no higher than about perhaps £50 million. The financial memorandum will give greater confidence around that point. That is certainly helpful and it is a lower figure than I have heard and I am sure others have heard and colleagues may wish to pursue that further. I want to just talk about the capital and fiscal framework. Obviously, it has been a very disappointing year in terms of the capital allocation from the UK Government that has been reduced by £185 million. Obviously, with inflation, that figure is actually higher. However, when we were basically asking about questions with regard to the capital and fiscal framework, the response was that the Scottish Government has disposed of constrained borrowing and reserved powers. Since 2016 inflation has been 39 per cent and basically the Scottish Government is still working with the same figures that it had all those years ago. I am just wondering if you have any indications from the UK Government as to when they would be willing to review the boring figures. For example, when inflation is 50 per cent higher than it was in 2016, 60 per cent and 70 per cent, what kind of on-going discussions have we had? That is clearly having an impact on the Scottish Government's ability to manage its finances. Those issues are tied up essentially with two things, convener. Any annual or periodic revisions of capital frameworks that are put in place by the UK Government—part of what has been my challenge in this financial year—has been that we have had no restating of the budget in the light of the significantly different inflation climate that we face now compared to when the budget was set. I rehearsed those issues with Liz Smith when I was at the committee the last time. The budget was set essentially in a context in late 2021 where inflation was benign and then we faced raging inflation for the whole of this financial year, which is part of why I am wrestling with the issue that you raised with me in your first question, convener, about the financial pressures in this financial year. There has been no restatement of the budget to take account of that factor. That is where some of the solution could lie in a restatement of the position. Secondly, the other area is in the review of the fiscal framework in more of a procedural space where borrowing limits could be revisited and recast. We have discussions to be had with the United Kingdom Government on the fiscal framework. Those are at a very early stage. The fiscal framework is an issue that I am sure other colleagues will ask about, which is why I did not. It is an issue that the committee has become increasingly concerned about, because we do not seem to have moved forward in the past year. I know that there has been a lot of chaos before Chancellor's III Prime Minister's. To be honest, convener, I would question the value of any conversation with most of the people that I have been dealing with over the last interim period in which I have been here because of the degree of churn, if we could put it as delicately as that. Although I understand that there is a UK Government reshuffle going on just now, who knows? We might have more churn before the day is out. Capital projects have had to be prioritised. I am keen to get some information on what some of those are. I think that there is one in my constituency and we are all for a start. However, major rail projects seem to be one of the areas where there has been a reprioritisation—a deprioritisation. However, the Scottish Government has met its commitment to expand its green investment portfolio, exceeding the target by around 15 per cent, up to £3.4 billion. Is there also some good news in there or not? I think that what we have to be conscious of is that the effect of inflation will affect capital projects in different ways. For example, any capital project that requires raw material inputs is going to face significant challenges because of all the implications for supply chains and costs that have happened as a consequence of the aftermath of Covid and the disruption of the conflict in Ukraine. Some other aspects of capital expenditure, as you highlighted, are some of the moves to net zero, some of the investments that are made in research activity, for example. Those are less susceptible to some of the erosion of value as a consequence of inflation. The point that I would make to the committee is that the approach that we are essentially having to ask portfolios—we are making portfolio allocations and we are having to ask portfolios to undertake prudential judgments about the timing and the progress of projects based on what value they can achieve as a consequence. There will be projects that are finding where the cost estimates are increasing very significantly and therefore it is not prudential to proceed with those just now because in a few months time there may be an ability to secure a more competitive price for those projects by the deployment of that capital expenditure at that time because the inflationary pressure has receded to an extent. What I would say is the best way to perhaps characterise this is that we are asking portfolios to align their commitments with due regard to the inflationary climate rather than reprioritising. Maybe we are just using different words, convener, in that respect, but it is to try to get—but you won the points that I made in my budget statement. There were four factors that I identified in my budget statement before I got on to the detail. I said that the significant increases in input prices and energy costs mean that our capital budget will be unable to deliver as much as would have been judged possible just a few months ago. The Government will keep those factors under constant review as we take forward the capital programme. That is essentially what I have just said we are doing, that we are conscious of the corrosive effect of inflation when we are trying to make the most appropriate and prudential judgments about when we should deploy particular projects with regard to the inflationary pressures. I think that the difficulty there was that even if inflation declines dramatically, which everyone anticipates at will this year, the prices are still fixed at high level. Because the capital allocation has shrunk, you are still going to have to try and squeeze a quarter into a pint pot. However, I was intrigued to find that the green investment portfolio has already attracted £300 million in private investment, with £875 million currently under offer in active discussions. There is a significant private resource to come in to help boost and deliver those projects. Totally. What the Government has got to make sure that we are effective in doing is giving the policy certainty and direction to the private sector to enable investment to be undertaken. If I give the example of the decarbonisation of electricity, the Government gave policy certainty that it wanted to decarbonise the electricity generation within Scotland. That policy certainty has been given for the entire duration of this administration for nearly 16 years. As a consequence, we have largely decarbonised our electricity generation means in Scotland. That has not been done by Government investment, it has been done by Government policy certainty, but it has been delivered by private investment. That is the type of climate that we have got to operate. As for private investment, I was at the First Minister and I two-part the other week there in the—it used to be called the financial services advisory board, but I cannot remember what it is currently called. It brings together a variety of different interested parties from the financial services community. The Lord Mayor of City of London was at that particular discussion. That whole discussion was predicated on the significant availability of private sector investment to support a number of opportunities, but especially the journey to net zero and the Government's policy direction we believe will help in that respect. What has helped the Government's policy direction is that stability over such a long period of time, whereas south of the board there has been incredible turmoil in terms of energy policy going in all sorts of different directions, reversing up, down, roundabout. There has been very little consistency for long-term financial planning, whether you turn out wind, solar, nuclear, whatever it happens to be. I take that on board. Just one last question from me, on growing the tax base and productivity. That is a key area for us, and you responded to our questions on that by saying that economic modelling estimates the delivery of key components of the national strategy for economic transformation could increase the size of a Scottish economy at least £8 billion, which is almost 5 per cent, other than it would have been by 2032. You have gone on to talk about, for example, a network of hubs that support high-growth tech businesses, technology sector export plan, hydrogen innovation scheme, low-car manufacturing challenge fund, but I am just wondering what other components there are that will deliver that £8 billion extra. Secondly, in terms of Scotland Wind leasing, you have basically talked about perhaps £28 billion of potential Scottish economic activity. Over what time period that is going to be delivered? The national strategy for economic transformation is set over a 10-year period, convener. My expectations would be that it would be in that period. In terms of the elements that are important, I would highlight perhaps three distinctive elements. The first is the development of entrepreneurship, the entrepreneurial people and culture element of the national strategy, which I think is absolutely vital. It relates to some of the points that you have put on the record, convener, about the tech scalers. We have seen very formidable improvements in performance as a consequence of some of those concepts already, and the Government is investing to roll those out around the country. The second element is about the necessity to have productive regions and regional economies in Scotland. I was recently viewing, as an example of that, an investment that the Government has brokered along with Hans-Anne's Enterprise, the Western Analyst Council, the Stormley Trust and the Stormley Port Authority in the construction of a deep water port in Stormley, which is making formidable progress on the ground. What that will open up is the opportunity for very significant new marine-based activity in the Western Isles. The first tranche of that will be that cruise ships will be able to berth in Stormley Harbour, which large ships cannot currently do. I was listening to some of the preparatory work that has been undertaken to develop more economic opportunities in the Western Isles to accommodate the interest and enthusiasm of visitors coming on these cruise ships into the area. We have already seen some of that success demonstrated very effectively in Orkney, for example, where cruise ships can get right into Hudson Pier. That first tranche will significantly boost the economy of the Western Isles. That is before we get anywhere near hydrogen and the ability to develop green hydrogen from the renewable energy footprint that will come from the Scotland process. That is just one example of one regional policy intervention that the Government is involved in supporting. We are involved in supporting many others around the country. The third element is essentially around the development of the necessary skills and capacity to ensure that we can make the most of the changes in the economy that are coming our way. I am very confident that, as a consequence of the much better dialogue that we now have involving relationships between our college sector and business, for example, our colleges are very attentive to finding the skills requirements that companies require to support the transition, particularly to net zero, and to be able to invest accordingly. Those three issues of entrepreneurship, regional policy and skills lie at the heart of addressing the productivity challenge that you put to me. I have a very positive and productive meeting with my local ASHA College just last Friday. I am now going to open up the session to colleagues around the table. First, we will be Daniel Duglis. I want to initially follow up on the answer that you gave around the cost for the national care service in the coming financial year, which is approximately £50 million, excluding costs of increasing pay for social care workers. The financial memorandum that we currently have set up costs to the national care service over a five-year period, and the costs for the coming financial year, which is 23-24, were ranged between £63 million and £95 million. If you look at those costs, that is all essentially from the establishment phase of the national care service in terms of central administration. Indeed, the actual running costs within that five-year period do not start kicking in until five years. If the plan was to spend between £60 million and £90 million, and you are now spending £50 million in the coming year, does that imply a delay to the full implementation of the national care service? If so, what is being held back? What are you refasing in that plan? I do not think that it says that. It just says that that is the best estimate that we have. Obviously, the financial memorandum looks many years hence operational decisions are taken about what is expected expenditure in any particular programme. Those numbers will be reviewed on a constant basis. However, as I have tried to explain to the committee before, the Government is concentrating on the preparations here in two respects—getting the initial organisational arrangements in place and boosting the salaries of social care workers, which is what we have allocated the substantial amount of money that is in the budget to enable that to be the case. I understand that financial memorandum is a broadly stated thing. We are all used to financial memorandums not necessarily bearing it to be 100 per cent accurate, if I can put it like that. However, it strikes me that this was a memorandum that was only published six months ago or thereabouts. It was implying costs not just by its coming financial but in the current financial year of not insignificant amounts, but it is now saying that the amount that will be spent is almost 50 per cent of what the upper range was. Certainly lower than the lower range. It strikes me that some... I think that we are really stretching this point. The sum money that I have put on the record is in very close proximity to the lower end of the financial memorandum. We are at risk of making a mountain out of a molehill here. Forgive me, Deputy First Minister, but in my previous life I spent a long time looking at both financial plans and project plans. If a project or indeed a programme plan was at 20 per cent variance within six months of the plan being published, which is essentially what we are saying, 15 to 20 per cent, something would have changed somewhere. You may say that that will not have a very significant impact in a programme that is scheduled to cost well over £1 billion. I will accept that, but what I do not accept is that there has been essentially no change and there is nothing to see. I am really just trying to understand what has altered in the Government's planning, thinking and assumptions in this plan to actually say that the projects across the financial year are going to undershoot what the plan was and the plan was only published six months ago. It is not a major point, but I think that something must have changed. All I am trying to say is that I do not think that there is an awful lot of difference between the two numbers that we are talking about. It is the only point that I am making. Again, we are talking about a financial year that, by your own estimation, is going to be incredibly tight. Therefore, understanding really how the Government is controlling costs is important, and that might be relatively small money in the grand scheme of things, but those things do add up. However, if you do not want to go into any further, I am happy to move on. What I am interested in substantially is understanding about the risks and parameters of the budget. There is a great deal of unpredictability. I always look at a budget thinking about fixed and variable costs—costs that are under control and costs that are beyond your control. I would like to ask some questions about that. First, about payroll, but also about things such as energy costs and material costs. A very approximate of £45 billion of resource spending within the budget, around half is on payroll costs, about £21 billion. Do you anticipate that going up or down in the coming year? There is no public sector pay policy accompanying this. I would like to understand whether the £10.50 pay floor, which was introduced in the last pay policy, will continue, or whether that pay floor will increase in the coming financial year? Quite a lot in there, convener, so let me try and work my way through all of it as best I can. In relation to payroll costs, I would imagine that those costs will increase during the year because I do not think that the degree to which public sector headcount will fall over the course of the year will be outweid by the increase in salary costs that will take place. I am not going to shortly produce an axial spreadsheet that gives the modelling behind that, but that would be my best assessment of what is the position that is likely to be in relation to Mr Johnson's question. On the second point in relation to the role of pay policy, I have not stipulated a pay policy for what I think is a pragmatic reason that we stipulated a pay policy last year and it became pretty meaningless pretty quickly, so we are essentially trying to do some further work to establish what might be the parameters of pay policy in terms of the expression of that pay policy, but the parameters of pay policy are that organisations committing to pay deals have to be able to afford them within the budgets that are being set, so I would not want the committee to think that there are parameters on pay, there certainly are parameters on pay, affordability is the big parameter on pay policy as we navigate our way through a volatile climate. Thirdly, the other big variable is energy costs and they will be influenced by some of the decisions that the United Kingdom Government takes on the management of energy costs, but essentially we are saying to public bodies and organisations that they have to live with those challenges. The last area that Mr Johnson asked me about was about the £10.50 pay floor, and my view would be that that would rise to £10.90 as a consequence of what steps we take. I will come to energy policy in a moment, but just to round out the conversation around payroll, there is obviously a number of other costs that can be attributed. Again, it is very important to manage those things, i.e vacancy rates can have a cost, they can lead to supplementation through agency staff, there is also the use of third party contractors or outsized resource. I would just wonder if there are broad parameters that you have set for the use of agency staff and third parties and also what is the level of vacancy across the public sector or certainly those bits that are directly under your control and how are you managing those things? There will be variables in costs. One of the factors that public bodies expected at one stage to have to deal with was increased national insurance contribution costs. That has not been the case, that has been reversed. For example, for local government, I know that local government finance has been a very active issue. That is a saving for local government of about £70 million, so that frees up expenditure within local authorities. On the fundamental point that Mr Johnson raises, I would best summarise it by saying that any employment arrangement that is not direct employment is more expensive than direct employment. It is generally undesirable. One of the points that we are trying to address, for example, in the discussions with the trade unions in the health service, is to get to a position where we address some of the underlying issues that might encourage or tempt members of staff to operate in an agency rather than employment status. We try to reshape that balance so that more people are on employee payroll as opposed to on agency payroll. If you are running a hospital ward, you have to have the requisite number of people, and if you do not have the direct payroll, you have to go to agency. That will come at more cost. The more we can undermine or reduce non-employee payroll costs, the better. That is the strategic guidance that is being issued in that respect. Is that a formal policy? Have you issued that instruction to the civil service around minimising that? Are there formal recruitment freezes in place currently, or are there short-term steps that you have taken? I do not think that I could say that we have issued a formal directive to all public bodies on that point, but those are well-established practices of what we would expect leaders of organisations to undertake because of the very fundamental point that I made to Mr Johnson, that non-employee payroll costs are more expensive than employee payroll costs. In terms of the prudential management of public finances, we would expect that to be undertaken by individuals. In relation to the Scottish Government, we have headcount controls in place, and we are working to reduce overall staff numbers. I should express that. To contain staff numbers, we have increases in staff numbers because, a few years ago, we were not responsible for any aspects of social security. We now are, so we have more employees as a consequence. However, we are trying to reduce those costs, and we have formal headcount controls in place that require appropriate sign-off within the organisation. At the risk of continuing my technical line of questioning, everyone is familiar with the issues around rising energy costs. All organisations are facing them, and the public sector in Scotland would be no different. I would just be interested in what is the total energy bill and, in particular, the exposure to gas, and what are the implications of the ending of the UK Government's arrangements directly on the public sector in April? Do you have a broad sense of the risk exposure that the public sector has to gas volatility over the coming budget year? I would probably be best to say that I should write to the committee with some detail on that, because I do not have that at the front of my mind today in relation to the specific comprehensive cost of that. I would counsel that this is not just about gas prices. The gas price is then a driver of the electricity price, which is of great concern. Obviously, I think that I better get precise information that there will be extensive collective public procurement of electricity and gas supplies, which might have been bought at a time, which has provided us with more or less protection. I think that I better write to the committee about that detail. I apologise for being very technical, but these are significant organisational budgetary exposures. I think that they could be overlooked. Therefore, I think that I have sort of an interest in those committees. I think that the point that I am happy to agree with Mr Johnson about is that there is a whole host of inherent pressures in the budget. To go back to Mr Johnson's questions in the very starting point in this section, there was a point about the degree of risk that is inherent in the budget. I would have to accept that there is a significant amount of risk, because we are living in very volatile times in terms of inflation, the implications of inflation on employment costs, energy prices and the cost of procurement of materials, which is getting better now. Earlier this year, it was at its most acute, sharp and difficult. It is getting better now, as some of the supply chains and alternatives to the Ukraine situation—the disruption around Ukraine—begin to settle down. However, we still face very significant risks. Of course, that could all change very dramatically as well. I have one final question. Again, I am very happy for you to get back. I do not necessarily expect you to have that hand. One of your key points in your introduction was the number of demand-led budget lines and that being a source of uncertainty. Do you have a global figure for the proportion of the Scottish Government budget, which is demand-led? Not off the top of my head, but I could provide that to the committee. However, it will include a much larger proportion than it ever used in the past because of the presence and prevalence of social security expenditure. However, it will also include aspects of concessionary travel, education maintenance allowance, agricultural payments and rail subsidy schemes. There will be quite a number, but we can provide the committee with our best estimate of that. The committee has an understanding of the risk profile and uncertainty that will be very helpful. Deputy First Minister, I want to ask a bit more about public sector reform. Obviously, the committee was disappointed that we did not have any of the initial outcomes. The Auditor General said that public sector reform is now urgent. Can you maybe talk us through what is happening and when the committee will actually see some of the thinking that the Government has got on that and just a timetable for that as well, Deputy First Minister? I am conscious of the committee's interest in this topic. I have a feeling that we may have been talking across purposes about the committee. I certainly do not want the committee to have the view that we are waiting for some moment of public sector reform to come along. Public sector reform is under way on an on-going basis. As a number of live examples of that, I would cite as the best start bright futures programme, which is in relation to the child poverty alleviation work, eradication work, which involves a significant amount of public sector reform. The work on keeping the promise is about public sector reform, because that relates to how we support some of our most children that face the greatest of challenges. There is work under way on education reform around the Scottish Qualifications Authority and Education Scotland. There is the wider reform work that has been undertaken through the introduction of early learning and childcare, which of course was completed last year. I understand that the committee feels that there is a big report waiting to be published. Why I would essentially characterise it as the Government is committed to the Christie Commission principles. We have been taking them forward on an on-going basis since the Christie Commission reported. Those are some of the most recent examples of what we have undertaken. The Covid recovery strategy, which involves a significant reshaping of the public sector into the delivery of public services, is perhaps another of the most recent distillations of what the Government is undertaking. Taking that stage further, maybe what I was expecting, when we think of things like the local governance review about public bodies working closer together, maybe collocating a lot of areas to try and get the asset based down, maybe even reducing the headcount would reduce, as we have discussed earlier with Daniel Johnson. I guess it is sort of that areas that we would expect in some more information. Is that work on-going then? Yes. I appreciate Mr Lumsden's question. We are directly working with public body leaders on estate rationalisation, on bodies working together. We are trying to encourage steps to reduce estate utilisation by collocation. We are in a context now where the world is quite different, because not everybody is working in an office, as they generally used to be. There are opportunities to reshape estate provision, and they should be taken, make no mistake about that, because of the necessity of reducing overall cost and making impact. That whole range of activity in dialogue with public body chief executives is being taken forward. There are groupings of public body leaders that work together on some of those projects, and we have encouraged them and motivated them to take as significant action as they can. What should we expect as a committee to see coming forward? Should there be a blueprint on how we all work together? We talk about digitisation as well. We have to be more efficient going forward. As we have seen, headcount reduction will probably have to come through to maintain the public sector payable at the level that it is, or increasing slightly. As a committee, we would like to see where we are going and what the impact that will be to our public services. It depends on what we mean by a blueprint. If it is a list of office buildings that will be rationalised, that is unlikely. I do not think that that is the way that a programme should be predicated. The perspective that we should be starting it off from is how we should reduce costs, improve efficiency and rationalise the estate, and then put the challenge to public bodies to make sure that that happens. Some of those things will have to happen because of the financial constraints that are applied because of the budget, and that will apply right across the public sector. I think that the Government would be able, and I hope in the response to the committee's report and the detail that we have gone into in that respect, to give the committee more clarity about the direction of travel. What it does not do is say that those are the list of operational changes that will take place, but we can obviously report on them as they take their course. It does not give a timetable as well. I think that it is what we were looking for as a committee. I am very happy to keep the committee informed about developments in that respect, which I think would perhaps address some of the issues. Would you agree that all those things are vital going forward to try to maintain the public sector pay bill at a level of approximately where it is now? Absolutely, yes. We look forward to seeing that. You mentioned flexibilities. Last time you were here, Deputy First Minister, about moving capital to resource spend. Has there been any update on whether you have been given that flexibility from the UK Government to do that? The UK Government is in dialogue with us about all the issues about management of the budget this year, so that is an active part of discussion with the UK Government. I am very happy with the nature of those discussions so far. Obviously, it has an effect on the ultimate budget management that we take forward. Do you have a plan B of that flexibility that is not granted? I have a solemn, absolute commitment to balance the budget this year, so we must accomplish that task. Last question that I had was about non-domestic rates. Last month, I asked for details on the revaluation. We still have not received that. Do you have any more details on that? Obviously, the poundage has been frozen, but the intake from non-domestic rates has increased by about £250 million. We are trying to get an idea of what is behind that increase. I will check on where we are with the information that the committee should have had on that. I will check that and get that to the committee as soon as I possibly can do it. Okay, thank you, convener. Okay, thank you. John, to be followed by Michelle. Thank you very much, convener. I do not want to go over too much old ground, although that is a temptation, obviously. A couple of things that have happened recently are the IMF forecast that the UK economy is not growing unlike most other competitors. Interest rates got up to 4 per cent last week. I just wonder if either of those is having an impact on next year's budget. Undoubtedly, the context that the IMF reports on will have an impact on the budget, because, if the IMF is correct, it would be quite a mighty achievement if we were not affected by that context at the IMF site. Obviously, interest rates rising is a particular challenge, because that affects a number of the points in relation to investment in the economy, whether that is at an individual level or whether that is at a corporate level. Obviously, we need that investment in the economy to drive growth within the economy. If interest rates rising leads to a reduction in house transaction activity, then that will have an effect on land and buildings transaction, tax revenue and, subsequently, on the Government's budget. That is just one example. The second area that I wanted to touch on was in dialogue with council colleagues. Clearly, they are struggling to balance their budgets and we are struggling to balance our budgets, and everybody realises that everybody else is in a difficult place. One or two issues that they have raised with me would be about revenue raising, if they could have a little bit more freedom to raise revenue. A particular example that they gave was private landlord registration fees, and another one was being allowed to increase penalty charge notices for parking and things, which would look like it would have the both improve illegal parking situation and also give a bit of extra money. I think that it has been mentioned £3 million for Glasgow. Is that the kind of thing? Is there any space for that kind of thing? I am certainly very happy to explore propositions that come forward from the local government in relation to the question that the convener asked me about the work on council tax. I am very keen that we make early progress so that, if there is more flexibility that local authorities can deploy in relation to council tax, then we should try to seek that. On the two specific examples that Mr Mason puts to me, I am just not sure about the arrangements in relation to fixed penalty notices, as to where power and control lies about that. I have to take that one away, but I am very happy to consider any propositions that might assist local authorities. I recognise the challenge that local authorities face in the current context, but, as Mr Mason correctly says, we are all facing them. I have a finite sum of money that I can allocate. I have taken decisions, not without controversy, to increase taxation. Having done that, that increases the resources that I have at my disposal, and that has enabled me in the round to increase the budgets available to local authorities by more than £550 million. If we were to increase that any further, we would have to take those resources from someone else. It is not my air of expertise, but they were certainly telling me that all local authorities had agreed that there could be an increase in penalty charge notices, but it seems to get stuck somewhere. I will take that one away. I cannot quite recall what the arrangements are, but I will give the committee a response on that. On the theme of flexibility, I think that you have suggested that you might be able to give local councils a bit more flexibility. Another example that they gave to me was that some money goes in that is ring-fenced, for example, for the health and social care partnerships, but if they are able to make a saving between them and the health board in the health and social care partnership, if a saving can be made there, that saving cannot be moved out to help some other part of the council that is under more pressure. Again, would that be the kind of thing? I have to say that I am pretty sceptical about that, because if I look at that issue, that is directly related to the fact that we have 1,700 people on delayed discharge in our hospital, so if there is somehow underspend emerging out of more efficiency in health and social care partnerships, I would like to see that used for its purpose of making sure that people are properly supported in a care environment appropriate to them, which suggests to me that it is unlikely that that resource should be taken out of health and social care partnerships and put into some other area of council activity. I think that we should concentrate, because we have all got a collective understanding that our hospitals are operating at far too intense a level. Hospital occupancy is, the last time I looked at the data, in the mid 90 per cent. It should be in the mid 80 per cent as a maximum. We have 1,700 people on delayed discharge, so if there are resources that have been freed up because of efficiency in health and social care, I think that we should use that to expand our health and social care footprint. Another suggestion that was made to me was around the question of teachers. I think that the pupil-teacher ratios vary around the country in the councils. I do not think that any of us want to reduce the number of teachers, but it was suggested that Glasgow and some other councils all have an above-average ratio at the moment. Therefore, could there be any flexibility that at least they move to the national average rather than having this extra investment? Those issues have obviously been raised with us by local government and the subject of discussion with the education secretary who will be making a statement to the Parliament today on the subject. Good morning. I am picking up a couple of themes that have already been touched on. Firstly, in terms of public service reform, I have been through all the responses and I can see that there is a lot of stuff going on. That is absolutely clear and I certainly await with interest for further detail on it. I suppose that one thing that jumped out at me was that it is no bad thing to ask local government to come up with their own ideas and I am sure that they will do that. However, that bottom-up approach is only one way. What consideration have you given to a top-down approach? It is something that I raised before, the fact that we have duplicate functions across our 33 local councils. In particular, I would highlight HR and the finance directorship. Presumably, we have 33 finance directors and an average salary of £88,000 or so. That is roughly £2 million each, not to mention the department. My question is that I consider it unlikely that local councils themselves would come up with the idea that we could have a centralised FD function across even some local authority areas, and likewise with HR. Is that something that you would give consideration to? As a matter of fact, we are all on the same page. It is an option, but I could just imagine the sight of John Swinney turning up at COSLA headquarters to say that we are going to do a top-down reform of local government. I would imagine that Mr Lumsden would be at the front of the queue to support me in all my efforts. I think that it is possible, but I would much rather encourage a process in which local authorities make the necessary changes of their hands rather than the Government doing it to them. I do not think that that is the way that it should be done. However, let me express my frustration about this point, because I think that Michelle Thomson and the Lights are on a particular problem here. Let me go back to the former world that I used to occupy as education secretary. There are 32 education authorities and 32 directors of education. In the local authorities, they are of wildly varying sizes, so one director of education in the city of Glasgow will be dealing with a fundamentally different proposition to the director of education in Clackmannanshire, for example. Some years ago, to take the Clackmannans example, Clackmannans and Stirling councils did quite a bit of collaboration and essentially got very close to running a joint education service. Nobody lost their identity, nobody lost their focus on education, but they decided to dismantle those arrangements. I thought that that was a point of regret, to be honest. I think that there is scope for exactly what Michelle Thomson suggests at me. I encourage local authorities to work together on the creation of regional improvement collaboratives among groups of local authorities. There is a lot of good work going on among those improvement collaboratives on education. I think that shared leadership would help a lot of those things as well. I accept that that is me beginning to get into the territory of specifying what local government should do, and I am left with a pretty strong impression from local government and message from local government that that is not particularly welcome. I have every sympathy with the view that the First Minister expressed. I have probably only made myself very unpopular by suggesting that. I am acutely aware of local sensitivities, but it appears to me to be the case in duplicated functions where it is not predicated on the very important people outcomes. There is a lot of complexity to it, but it is counting and measuring broadly similar things across a range of services. If anything, to me, it would give more light to how money is being spent. I know that it is unpopular. I think that there is a substantive issue in this. To be clear, I think that it would be wrong for the Government to drapes in and say that this is what is going to happen. I do not think that that would go very well, to be honest. However, if you look at other prospects or other propositions, for example, local authorities have come together in really quite intense collaboration around some of the city deal and growth deal propositions. At economic strategy and development levels, local authorities are working much more intensely together than they have in the past. I think that that throws up some significant opportunities for authorities to work closely together to rationalise, to reduce costs and to make sure that they have more. Nobody needs to lose their council boundaries. I know that the Government is very clear that we are not having a local government reorganisation. However, collaboration between councils—if I think about Mr Lumsons' neck of the woods, if I am correct, the Aberdeen City Council's headquarters are within the boundaries of Aberdeen City Council. A lot of joint working might actually be byw I know what happens, but a bit more intensely would be quite a good thing. I think that there is scope for that, and I would simply encourage it. I do not think that it would be helpful for the man from the ministry to turn up being helpful. Going back to an earlier point that came up in terms of the fiscal framework review, I suppose that I want to dig down a wee bit into what exactly is happening here. Again, I fully accept the multitude of personnel changes within the UK Government, and that has been clear—it has been quite the revolving door. However, I want to understand exactly where we are. As far as I am aware, the terms of reference are not yet agreed, so can you help us to understand where exactly the blockers are, what actions you have taken, where you feel that you have been unable to make progress? At the moment, looking at reading through the responses, I am no more certain of exactly and specifically where we are with it, given its importance that we have highlighted. Essentially, both the Scottish and UK Governments have communicated the topics that we are interested in pursuing. We have not been able to make headway on that largely because—I am not saying this to point the finger, because I think that it is just a knowledge of reality—there has been an awful lot of change in the UK Government, and there has been a lot of other issues to be wrestled with. I am seeing the chief secretary to the Treasury later on this week, so I have the opportunity to pursue some of those discussions with him. I look forward very much to that conversation, because I am quite sure that we can make some progress. Obviously, I can keep the committee up-to-date on any developments that emerge, but I do not think that there are blockers or blockages. I think that there has been an awful lot of other things that have had to be sorted out. Given what has happened in the UK in the course of the past few months—in the UK Government in the past few months—I can understand that the Treasury has had some really pretty significant issues to wrestle with, and this is not absolutely a mission critical. My last question, then, is your perception that there is still a genuine appetite for change from the UK Government? Is it hard to determine that until your meeting on Friday? That perhaps is a question that you will ask. I think that the UK Government is committed to the fiscal framework review, so I simply take that at the face value, and we will embark on those discussions in the most constructive way that we can. Last week's question on this, then, do you think that it is likely or would you hope to be in a position where there is some kind of combined statement of intent emerging from the meeting on Friday with some specifics as to progress that is being made? Is that an outcome that you would hope for? We just have to take forward—this is a routine discussion with the Welsh Finance Minister as well, so it is our fiscal—what does FISC stand for? Financial Interministerial Steering Committee. Too many acronyms in this world, so that is happening on Thursday. Obviously, we will have the opportunity to discuss those issues. Just going back to the national strategy of economic transformation, specifically your responses to paragraph 79 and 80, you said an interesting thing in your response that you felt that three things were absolutely critical, namely entrepreneurship, productive regional economies and the necessary skills for building capacity. On that last point, one of the issues is about ensuring that those people who have come out of the Labour force are encouraged in some cases to go back in. There has been a huge amount of economic analysis done down south and in Scotland about just how difficult that process is, partly because of long Covid issues, but also because people feel that the changing circumstances, if you yourself referred to people, are not going back to the office. What policies do you think are best implemented to try to encourage more people who have huge range of skills that we desperately need in the economy to improve productivity, etc? What policies do you think will best implement that? I know that it is a difficult area, but what do you think we should be doing? I might perhaps best address that question by looking at two different categories of people. The first category is people who have been in economic activity and, as a consequence of whatever has happened in the course of the last couple of years, have maybe decided to not to continue that economic activity. For a lot of those people, Covid has been very disruptive to lots of people in lots of ways, and we have to find ways of motivating people to continue to make an economic contribution for perhaps longer than they at this moment want to do. Probably the key to that is entrepreneurship. A lot of those individuals have probably got an economic contribution that they can make through entrepreneurship, and we have to make sure that our entrepreneurship activities are reaching them in a way to provide them with a route to take forward those ambitions. That is one group. The other group is people who have been in economic activity for a lot longer. I see that as part of the work that we are doing on the child poverty delivery plan. We have to erode that level of economic activity in Scottish society. As I have said to the committee before, we have seen an improvement of about a year in a year of about 1 per cent point in economic activity. The committee might say that that is only 1 per cent. That is actually pretty significant because economic activity levels are about 21 per cent in Scotland. It can only ever really come down to something like about 15 or 16. Narrowing that by 1 per cent is quite an achievement. Relentless focus in a supportive way, in a holistic way to those individuals, is necessary because all those cases will be complex. None of them will be simple. They will all be complex. They will need complex interventions to help somebody to get into economic activity. However, we have to do that because, as Liz Smith will know from all of her dialogue across the economy, everyone is shorter people. That is an interesting answer. Is there an aspect of this that is about trying to help employers to understand that they have a big role to play in making their workplaces more attractive both from a working practice angle but also from a financial aspect? A huge number of entrepreneurs in the private sector and the Government has to be careful about intervening too much. What do you think the Scottish Government can do to encourage employers to think very carefully about just how attractive their workplace is in relation to people staying at home? Is that a really big part of it? That is some of the evidence that we have taken from— I think that Liz Smith rightly cautions me about treading too far into private sector management practices, but I think that there are opportunities for employees to be continued to be involved in activity but by working in a different fashion. If we go back three years, working from home was the exception, not the rule. Hardly anyone did it, hardly anyone used teams and all the rest of it. The world has changed. People are able to undertake their lives in a slightly less congested fashion. I would encourage employers to be as flexible as they can with their workforce because I would be surprised if they cannot get all the benefits from their workforce that they would expect to receive. What about financial incentives? I saw an interesting article about the possibility of allowing over 55 people who might be more encouraged to stay in the workplace if they had some tax relief on the extra savings that were made during that older period of work. Do you think that there could be some financial incentives that might help? I am sure that those things all help in making the judgments. Where we could exercise those, I am not certain, because I do not think that we have the flexibility to do what Liz Smith suggests. Employers have to look with care. The Government has to look with care at what it can do to try to maximise the continued economic contribution of individuals. I am sure that the answer is yes, but I assume that the Government is looking at ways in terms of transport policy and housing policy that are all part of the issue of making it more attractive for people. On the question about the fiscal framework, I am sure that it will come to political debate at a much later time, but there are issues that have been put to us as a committee, and I think that we have pretty much agreed on that. There are difficulties because of the timescales of the OBR forecasts and the Scottish Fiscal Commission forecast, namely that there is a bit of a lag and gap between them. Obviously, the Scottish Government has to be at the behest of both the OBR and the Scottish Fiscal Commission, whereas the Treasury requires the OBR to make its policy statements. Do you feel that that complication is something that can be crossed that we can get over this problem, and is that something that you would like to see resolved as we move from the 2016 fiscal framework to 2024 or whenever it happens? As the person who negotiated the fiscal framework, I recognise its necessity. There has to be a fiscal framework, but I think that what I would also accept is that it has to be practical in the way that it operates. One of the issues that I think that the last 10 months that has demonstrated to us is that the fiscal framework does not work where you have an inflationary shock of the type that we are currently facing, because it has required me to do some really demanding things that have not gone down well. I have had to cut employability budgets. I am pretty clear that the Social Security Committee of this Parliament does not particularly think highly of that decision, but I had very few options to try to get the budget into balance. I think that if we enter the discussions from the perspective of trying to ensure that the framework operates effectively, that will be a helpful way to proceed. There are a variety of questions that come. One of the points that the convener made was about long-term certainty and being able to offer that to the wider marketplace. I think that that is really quite critical, but it is not just critical for the wider marketplace, critical for the third sector, critical for local authorities. If we are in a kind of stop-start situation, which is often where we are in budgetary terms, I understand that it is not desirable. I think that there is quite a lot that we could do to address the practicality of the framework. Lastly, when we had the academic panel in which we were discussing a lot of this problem about forecasting, it is quite willing to accept that there is a difficulty about forecasting when one Government is looking at two sets of figures and the other Government is looking at one set of figures. Do you feel that that is something that we can do something about for the next fiscal framework, or is it just a fact of life that that situation exists? I think that we can certainly try to address that issue. We follow and we are blides by statute to follow the fiscal commission advice, which of course reflects on the OBR advice. In statutory terms, I do not feel—certainly, in approaching the budget this year, I was not thinking very much that I had to reconcile the Scottish Fiscal Commission with the Office for Budget Responsibility. I was just essentially saying that I have an obligation to listen to what the Scottish Fiscal Commission is saying and to take my budget decisions on the basis of that premise. I do not think that there is a decision about where the centrality of advice comes from. I do not think that I felt any confusion about that. There is going to be more question about timing. I am very happy to explore any issues about that. I was quite intrigued in the response about the comments regarding the Dundee Pathfinder project with regard to employability, and I think that that is something that we want to look at further. Interestingly, you will be aware that the UK Government is talking about raising the pension age from 6 to 7 to 68, bringing that forward from 2044 to 2034, so that will increase the workforce. I do not know how many people aged 60, 70 or 68 will still want to remain in the workforce, but that is when the state pension age will change. In terms of employability yesterday, I was at ACS in Motherwell. I do not know how familiar I am with that facility. It is a circular economy facility. It is the largest clothing recycling facility in Europe. It employs 150 people and it takes clothes and puts them back into the marketplace. 16 per cent is the workforce of disabilities. It has a very high proportion of refugees and ex-offenders working there. It takes a lot of people from the margins to pay well. It is very high-tech, etc. It has a very low carbon footprint, etc. A lot of good things are happening. It is about trying to learn from some of that best priorities and see how else it can be expanded in Scotland. Can I come in on that point, convener? I think that you are light on a really important question, which is about the nature. I am not familiar with the status and the nature of ACS, but I had the privilege at the Business and the Parliament conference of talking to the chief executive of Dovetail Enterprises in Dundee, which is a furniture and mattress manufacturing facility. It is a social enterprise. It would be the best description. It is reaching out to create economic opportunities for people who are often very remote from the labour market. One of the projects that they were talking about was the fact that they had been successful in landing the contract for furnishing and equipping the Social Security Scotland offices in the city of Dundee. Having just been in those offices a few weeks ago, I can attest to the quality of the product that they have. However, it was a perfect example of how public expenditure through public procurement, all done properly, can result in really beneficial social and economic outcomes. There are people in the labour market active and engaged labour today who would not have been there had it not been for the degree of support that they had had through employment at Dovetail Enterprises. It will not be exactly the same as the example that you cited. It goes back to one of the points that Liz Smith made to me or one of the points that she put to me in a slightly different context. It takes employers to think about how they might be able to engage and activate people who are not currently active in the labour market and to be open to that. Not everybody will be prepared to work with ex-offenders, but we need to help people to get their lives back on the road again. As a social enterprise, I know that the cross-party group in the Circle economy is going to visit it. I asked about ex-offenders. It says that their level of productivity is excellent. If all their workforce was ex-offenders, they would not mind at all because they are able to deliver the product that is required. One last question before we move on to the next part of our agenda. That is about private finance initiative public-private partnerships. When the Scottish Government came in in 2007, there was a very significant financial burden that had been placed on an annualised basis. I understand that, with interest rates going up, that is a significant impact. What impact is that having on the Scottish Government and local authorities on increased repayments? In certain projects, there will be implications as a consequence of interest rates changes. I do not have a detailed picture in front of me today. The Government publishes the information on PFI projects on an annual basis, but, if there is more information, I can produce for the committee. I will look to do that. My own local authority was before inflation. That was about £16 million, £17 million that it was having to pay for schools completed in 2007. Those payments got to 2037, but there is a significant increase, because a lot of those are tied into current interest rates, as opposed to having a fixed rate for a period of time. It was to look at the implications of that across the public sector. Any information on that would be helpful. With that, if there is no other question, I will call the session to a close. We will have a five-minute comfort break. We have no amendments, but in terms of the standing orders, we are obliged to consider each section and schedule the bill and the long title and agree to each formally. We will take the sections in order, with schedules being taken immediately after the section, the introduction and the long title last. Fortunately, standing orders allows us to put a single question with groups of sections or schedules that are to be considered consecutively, and unless members disagree, that is what I propose to do. The question is, that section 1, schedule 1, section 2, schedule 2, section 3, schedule 3 and sections 4 to 11 be agreed to. Are we all agreed? Can you analyse that? We are all agreed. John is continuing his Richard Lyle impersonation, even at the committee. Secondly, the question is that the long title be agreed to. Are we all agreed? That ends stage 2 consideration of the bill. Thank you, cabinet secretary. I will now suspend the meeting for one minute before we move on to our second agenda item, which will consider the budget bill at stage 2.