Budget 2023-24 (Committees’ Pre-budget Scrutiny)

I am pleased to open this afternoon’s debate on pre-budget scrutiny, on behalf of the Finance and Public Administration Committee.

The inclusion of this debate in the overall budget process was recommended by the budget process review group in 2017, with the aim of bringing greater transparency, influence and scrutiny to Scottish Government budget proposals. The debate also provides a welcome opportunity for conveners to set out how their committees have sought to influence the Scottish budget through their pre-budget reports, and for Scottish ministers to respond. That is why I am delighted to see that so many committee conveners will participate in the debate. I look forward to listening to their contributions, as well as to those of my committee colleagues and other colleagues. I will not touch on all our pre-budget deliberations; in closing the debate, the deputy convener of our committee, Daniel Johnson, will cover what I omit.

This year, the FPA Committee agreed to use the Scottish Government’s resource spending review, which was published in May, to inform our pre-budget scrutiny. The review set out spending plans for the remainder of the parliamentary session, supporting the Scottish Government’s ambitions from 2023-24 to 2026-27. Although it was not intended to provide fixed budgets, the review provides a clearer idea of the direction of travel for public finances, including public sector funding.

We focused our pre-budget scrutiny primarily on three spending review areas: the impact of the cost of living crisis on the Scottish budget 2023-24, proposals for public service reform, and how spending priorities might affect the delivery of national outcomes in the national performance framework. Our scrutiny was also informed by the Scottish Fiscal Commission’s “Scotland’s Economic and Fiscal Forecasts” and by “The Scottish Government’s Medium Term Financial Strategy”, which was published alongside “Investing in Scotland’s Future: Resource Spending Review” in May last year.

We thank our adviser, Professor Mairi Spowage, for her invaluable advice throughout the year. We are also grateful to all those who responded to our call for views, which ran between June and August, and to our witnesses for their evidence, which has helped to shape our findings.

However, with some notable exceptions, witnesses continue to emphasise the need for increased spending in their own portfolio areas and are reluctant to provide suggestions on where funding might be deprioritised, where additional revenue could be raised and what spending priorities should be. There is more often a willingness to assert that increased funding for their own budget area in the short term will lead to longer-term savings elsewhere in the future.

Pre-budget scrutiny came at a time when the cost of essential items such as food and energy was increasing faster than incomes, and inflation had recently hit a 40-year high. The Scottish Fiscal Commission’s May forecasts stated:

“The Russian invasion of Ukraine, steeply rising energy prices and further global supply chain disruptions in China have led to a challenging economic outlook.”

The United Kingdom faces the biggest annual fall in living standards since equivalent records began—7.1 per cent by the end of next year, according to the Office for Budget Responsibility—and just before we published our pre-budget report at the start of November, a third UK Prime Minister in as many months took office and serious concerns were emerging in relation to UK economic stability. In fact, economists and commentators had already spoken of the UK having entered recession.

In its 2022-23 budget, the Scottish Government made a series of savings in-year to identify allocations that could be used to fund cost of living support, including improved public sector pay offers. We heard in evidence from the Deputy First Minister last week that uncertainties remain on how it will balance the books for this financial year, with a sum of between £200 million and £500 million still to be found. It is concerning that there is still that level of uncertainty so late in the financial year, so any further information that ministers can provide today will be welcome.

The committee also notes the Scottish Government’s expectation that it will not be in a position to carry over any resource into 2023-24, which will place additional pressures on public finances next year. We heard evidence that the cost of living crisis is impacting people from across society, from businesses to households, to voluntary bodies and to communities.

In our pre-budget report, we welcomed the Scottish Government’s commitment to provide immediate support to those who are most in need. We were concerned about inflationary pressures persisting into the next financial year, however, and asked the Scottish Government to look further ahead at how immediate fixes over this winter might be extended into its budget for 2023-24. In responding, ministers pointed to the uprating of devolved benefits, including the early uprating and expansion of the Scottish child payment, continuation of the fuel insecurity fund and doubling of the Scottish child bridging payment as ways in which it would continue to support people through the cost of living crisis into 2023-24.

We heard compelling evidence that the crisis is having a disproportionate impact on women and asked how the Scottish Government could best support women through these challenging times. We also urged ministers to put in place robust and transparent processes to evaluate all policies and outcomes for their gender impacts. We hoped that that would better support committees in policy scrutiny decisions for their potential impact on women, including through evidence gathering.

In its response to the pre-budget report, the Scottish Government said that it was

“committed to ... mitigating ... the disproportionate impact of the cost of living crisis on women.”

It also said that it accepted

“the principle of integrating intersectional gender analysis into our policy making and are taking that forward as part of our wider work on equality and human rights budgeting.”

We have asked in our budget report for more details on exactly how that is being taken forward.

During pre-budget scrutiny, we heard different views on whether the Scottish Government should, in its 2023-24 budget, follow or diverge from the UK Government’s income tax policy. In our budget report, which was published yesterday, we explored in more detail the Scottish Government’s income tax plans for the next year, including the potential that negative behavioural impacts will reduce revenue, which was highlighted by the Scottish Fiscal Commission.

Where we continue to find common ground is on the need to increase productivity, wage growth and labour market participation in Scotland to bolster sustainable economic growth, including growing the tax base, and on the need for greater investment in research and development and greater support for innovation. Those issues are of particular interest to the committee and are ones that we continue to raise as part of our wider work, including in our forthcoming scrutiny of the Scottish Fiscal Commission’s first sustainability report, which will be published in March.

The Scottish Government has pointed to its national strategy for economic transformation as the stimulus for addressing inactivity, low productivity and slow wage growth. We continue to seek more detail on how it will do that, along with information on how budgetary pressures will impact on delivery.

The decision to cut employability services in-year during 2022-23 was of particular concern to the committee, although we recognised that that was just one of many difficult decisions that had to be taken in order to fund public sector pay deals and to address the cost of living crisis. We asked the Scottish Government for the analysis that it had undertaken on the reduction in funding for employability services in order to understand any adverse impact, including on its ability to meet child poverty targets. I raised the matter directly with the First Minister at the Conveners Group in September. We thank the Deputy First Minister for the assessments that were carried out and we welcome the rise in employability funding in 2023-24.

A significant focus of the resource spending review was on public service reform. The review was intended to provide a

“fresh vision for our public services reform programme”

and to set out

“a coherent package of action that will drive progress over the life of the current parliament, improving outcomes while driving efficiency and value for money”.

Those proposals also formed a significant element of the committee’s pre-budget scrutiny, and we asked stakeholders to provide their views on the Government’s proposals to achieve reform through digitalisation, to maximise revenue through public sector innovation, to reform the public sector estate, to reform the public body landscape and to improve public procurement.

We noted in our pre-budget report that reform and efficiencies often require expenditure up front and time to deliver, and we invited the Government to confirm whether its plans to achieve savings by the end of the parliamentary session are realistic. The limited information that was provided in the Scottish Government’s response did not give us sufficient confidence that its plans are achievable within that timeframe.

The resource spending review committed the Scottish Government to publishing initial outcomes and plans for its public service reform programme alongside the Scottish budget. In our pre-budget report, we asked that ministers develop detailed and transparent proposals that clearly set out priorities, funding, timescales and intended outcomes, as well as the potential impact on service delivery. Unfortunately, expected outcomes and reform plans were not published with the budget and there was no explanation for that, other than the suggestion that work was on-going. Officials are engaging with public bodies to initiate action in identifying opportunities to reduce overhead costs—for example, through rationalisation of estates and public bodies. We recorded our concern about that approach in our budget report and sought further detail in order that the Government could provide us with the assurance that we need that that work is on track and will improve public service effectiveness.

We recognise the challenges that the Scottish Government faces in identifying additional money to fund public sector pay rises in response to inflation. The committee noted in our pre-budget report that the Scottish Government is seeking to reduce the public sector head count over the rest of the parliamentary session to pre-Covid levels—from around 447,000 to 417,000. The First Minister’s commitment to a policy of there being no compulsory redundancies in that regard is welcome. We recognise that this is an uncertain time for all concerned, so we have asked for assurances that the Scottish Government will take a partnership approach with the workforce and that it will be open and transparent on those difficult issues.

We also sought assurances that ministers will approach reducing the public sector headcount in a systematic, transparent and co-ordinated way, in tandem with the public service reform agenda, while minimising adverse effects on public service delivery. In response, the Scottish Government said that it has developed its proposition around targeted workforce growth in priority areas and that it is for individual public bodies to determine locally the target operating model for their workforce. Again, we believe that more information is required. We continue to pursue progress on public service reform, pay and headcount in our budget report, and we look forward to receiving more information from the Scottish Government on those issues, in due course.

Finally, I want to return to where I started my speech—the resource spending review. When it was published, the committee welcomed the certainty and transparency that it provides in relation to expected spend in future years, although some of the decisions that would have had to be taken in delivering what is in that report would have been very challenging. As was acknowledged by the Deputy First Minister in recent evidence to the committee, Scotland’s economic and financial circumstances have changed dramatically since May. We therefore urge the Scottish Government to provide an update as soon as possible.

I now look forward to hearing colleagues’ contributions and am pleased to move motion S6M-07602, which is in my name.

I move,

That the Parliament notes the pre-budget scrutiny undertaken by the Finance and Public Administration Committee, and other parliamentary committees.

Today’s debate is an important part of the Parliament’s scrutiny of the Scottish budget, and I appreciate the engagement across the committees in preparation for the debate.

It has been a particularly challenging budget to develop. The war in Ukraine, the surge in the inflation rate and the damage to the public finances that was done by the mini-budget in September have created an exceptionally difficult landscape in which to develop and bring forward the Scottish budget. As a Government, we have had to make difficult choices, and the Parliament will have to consider and determine those choices in the course of the next few weeks.

A balance must be struck between the funding that is available and what it can deliver for the people of Scotland. We have actively chosen to increase the funding that is available to the Scottish budget through our fair and progressive approach to taxation. We have brought to the Parliament a budget that sets a different path for Scotland, which prioritises the elimination of child poverty, the transition to net zero and the sustainability and effectiveness of our public services.

The Finance and Public Administration Committee’s report recognises the nature and scale of the financial challenges that we continue to grapple with in the current financial year and that set a challenging context for the year ahead. As I made clear in my evidence to the committee earlier this month, I take seriously the points that the committee’s convener made in his speech and in the report about the undesirability of there not being a path to balance the budget at this stage in the year. I assure the Parliament that that is not for want of trying and that it is a measure of the scale of the challenge that we face because of the factors that I recounted earlier in my speech. I further assure the Parliament that we are working to address the issues in the time that is available to us.

We have limited fiscal powers, so we have had no option but to reduce our spending in order to meet the pressures on our budget, not least the £700 million of additional funding that we have allocated for public sector pay, which makes a substantial contribution to assisting public sector employees to deal with the cost of living crisis that we face.

We recognise that public sector pay is an important issue to the Parliament. I explained in my budget statement that I was not publishing a public sector pay policy because of the uncertainty about the outlook for inflation and the need to conclude some pay deals in the current year. We can still make progress on pay discussions for 2023-24. Indeed, the Scottish Government continues to engage on pay issues with trade unions and public sector employers. Along with the Cabinet Secretary for Health and Social Care, I have been actively involved in negotiations relating to the agenda for change groupings that we are trying to resolve for 2023-24.

I appreciate that there is a wide range of views across the chamber on what the budget should support, and the debate offers an opportunity for a wider conversation. I look forward with interest to hearing the perspective from a range of committees in members’ contributions to the debate.

I thank the Finance and Public Administration Committee for its pre-budget scrutiny report and stage 1 report and for its acknowledgment of the wide-ranging challenges that the Scottish budget faces. I will carefully consider the recommendations in the report and will reply to the committee in writing in due course.

For the 2023-24 Scottish budget, I have carefully balanced the growing asks against the funding that is available. The budget recognises that we must take action now to enable us to overcome the even greater fiscal challenges that lie ahead. Our approach is set out in our medium-term financial strategy, and we continue to take steps to improve that each year in response to the challenges that we face. Further updates in relation to the implications of the current environment and the different environment to which the convener referred will be set out by the Government in due course—that is likely to be in the medium-term financial strategy.

Critical for the Scottish Government is our continued commitment to ensuring that our public services provide the support that people and communities need, improving outcomes and reducing inequalities while remaining fiscally sustainable. The UK Government’s financial plans will make that incredibly challenging, with the funding outlook for the later years of its spending review period looking increasingly bleak. For those and other reasons, I have taken decisions to increase the higher and top rates of taxation in the next year in order to boost the revenue that is available to the Scottish Government and the Scottish Parliament to address those questions.

Reform of our public services is vital to ensure their sustainability. We have already pursued those issues with public bodies and set out our approach, which is built on joining up service delivery to direct resources towards more person-centred services and, in doing so, make better use of resources.

Secondly, we will undertake a rigorous review of the public body landscape, the work that public bodies do and how resources are used to improve outcomes. That work is not easy and will involve a whole-system approach, which we know will take time to deliver the results that we require.

Thirdly, we are expanding the utilisation of digital technology in the delivery of our public services.

Finally, we will carefully manage public sector employment, in dialogue with public bodies and with our trade union partners, who must be at the heart of dialogue on all such questions.

Change happens when we all buy into and contribute to a vision of effective, sustainable and person-centred services that is both achievable and ambitious, and that will be the focus of the public service reform work that the Government undertakes.

I place on record my thanks to all the committees for their scrutiny work on the budget. In the time that is available to me, I will reflect on a number of the issues that they raised, although I will come back to that in my closing speech, when I have heard from committees about some of the issues that we can further address.

The Economy and Fair Work Committee acknowledged the current challenging economic circumstances and expressed interest in the financial support that we intend to provide for a range of economic and business areas, including enterprise agencies, tourism and the hospitality sector. The 2023-24 Scottish budget maximises the support that we can deliver for businesses through the budget directly and through non-domestic rate support mechanisms.

The Health, Social Care and Sport Committee acknowledged that the scale of the financial and operational challenge across the health and social care sector is unprecedented. That is why the 2023-24 Scottish budget will provide more than £19 billion of investment in health and social care. That is an increase of more than £1 billion, which has been made possible due to the additional revenue that we have raised through our fair and progressive taxation system. As a result, we are exceeding our commitment to pass on all the health and social care resource consequentials to the health and social care system.

The Social Justice and Social Security Committee offered views on a range of social justice and poverty issues. The Scottish Government takes those issues seriously, and I hope that our response in the budget to those significant issues is commensurate with the seriousness of the issues that the committee put to us.

We have taken exceptional steps to support Scotland through the cost crisis and, by the end of March 2023, we will have invested about £3 billion in a range of measures to support households. In addition, we are investing £442 million in delivering the Scottish child payment, which is the most ambitious child poverty reduction measure in the UK. We hope that that measure, along with the uprating in April 2023 of all other Scottish benefits by the September consumer prices index figure, demonstrates that we are providing a comprehensive package that will help us to eliminate child poverty in Scotland.

The Education, Children and Young People Committee raised the important issues of colleges, universities and early learning and childcare. The education and skills resource budget for next year will increase by £132 million, to more than £3 billion, to enable us to address many of those issues.

The Local Government, Housing and Planning Committee focused its pre-budget scrutiny on affordable housing. The Government has put in place investment to support the continuation of the long-term affordable housing programme—next year, we will make available more than £750 million for affordable housing. The local government settlement has been enhanced through a cash increase of £570 million, or 4.5 per cent, which represents a real-terms increase of 1.3 per cent.

The Net Zero, Energy and Transport Committee sought evidence on topics including the fair fares review and bus support, heat in buildings and the joint budget review. We have set out a range of measures, including the investment over the course of the parliamentary session of more than £1.8 billion in heat and energy efficiency, to enable us to properly address the challenges that the committee put to us. In addition, as we have set out on previous occasions, we are expanding the fuel insecurity fund.

In conclusion, I highlight the work that we have taken forward with our recent announcement of the islands deal. We have set out commitments to support our rural and island communities, and the rural affairs budget reflects those challenges.

I look forward to hearing responses from committees and will reflect on those issues in my closing speech. I stress the importance of ensuring that we set a budget that utilises the resources that are available to us, but I make it clear that some very difficult choices had to be made to get us to the position that we are in. I look forward to hearing the views of committees as we take forward our constructive engagement on the Scottish budget.

As convener of the Health, Social Care and Sport Committee, I am pleased to contribute to this debate on the budget. To inform our pre-budget scrutiny, the committee issued a call for written evidence, which received a total of 20 responses. We took oral evidence from selected witnesses on 20 September 2022 and wrote to the cabinet secretary with our recommendations on 27 October. I am grateful for the cabinet secretary’s written response of 15 December and his appearance before the committee on 10 January 2023 to answer questions about the budget.

The evidence that we received highlighted concerns about the unprecedented financial pressures that our health and social care services face. Those pressures have been exacerbated by the spiralling cost of living, which is having a damaging effect on the wellbeing of our citizens and on our health and social care workforce, and by the vastly increased cost of running the national health service because of fuel costs and inflation.

Witnesses also highlighted the long-term impacts that the Covid-19 pandemic has inflicted on the physical and mental health of the Scottish population and on the wellbeing of the NHS workforce. That will require on-going financial support in the years ahead. Long Covid continues to impact the health and social care workforce, unpaid carers, those receiving care and the wider population. That, too, will continue to come at a considerable cost as we find out what treatments might be needed in future.

However, the impact of the pandemic has not been universally negative. Many of those who responded to our call for evidence were keen to highlight how positive experiences of the pandemic, and of how the pandemic was managed, have helped to drive innovations in healthcare delivery.

One of our recommendations to the Scottish Government is that it must continue to foster a culture of innovation in health and social care. We must ensure that the improvements in the efficiency and effectiveness of service delivery that were brought about by the ways in which our health and social care workers managed the pandemic are embedded and built on. For that to happen, we must ensure that we are properly monitoring and evaluating the cost-saving benefits of innovation and that we are learning lessons. As one of our witnesses told the committee, encouraging innovation includes giving practitioners the confidence to try new approaches.

My committee has long asserted that there are persistent and substantial gaps in the available data on various aspects of health and social care. Stakeholders who contributed to our pre-budget scrutiny told us that that impedes budget tracking and the assessment of spending against defined outcomes, meaning that certain outcomes might not be measured at all. Although we recognise the £1 million uplift in health spending and the increase in pay for NHS staff, it is vital that, given the Scottish Government’s constrained budgetary environment, we have the data to accurately measure the impact of spending against those outcomes and to target finite resources as effectively as possible.

Many of those who contributed to our pre-budget scrutiny highlighted the negative effect of single-year budgets on long-term financial planning and said that that can hamper efforts to prioritise resources towards preventative spending and to meeting NHS Scotland’s stated ambition

“to become a service which is both environmentally and socially sustainable”.

As the Convention of Scottish Local Authorities wrote in its submission to the committee,

“Overall, there remains a continued focus on input and output measures rather than outcomes when it comes to public spending. This drives behaviour and spending in ways that are not necessarily best value.”

We fully appreciate the immense strain that our health and social care services are currently under as they face immediate and acute demands that are, as I have said, unprecedented. However, prioritising preventative spending and net zero investment is a nettle that we know we need to grasp if we are to stand any chance of putting health and social care finances on a more sustainable footing in the long term.

The committee has called for clarity on when the Scottish Government will bring forward an updated medium-term financial framework for health and social care. We recognise that no budgets are set through that framework, but, nonetheless, publishing it would give health and social care decision makers greater certainty and confidence, enabling them to plan funding in the longer term and give greater priority to the preventative spending that we know will unlock better health outcomes in the future.

In our letter to the cabinet secretary, the committee also emphasised the importance of taking a whole-system approach to assessing the health impact of non-health spending. I commend the cabinet secretary’s commitment in his response to

“working ... with Public Health Scotland ... to explore better ways to embed the consideration of health issues into decision-making at national and local level”.

We also want to recognise the cross-portfolio working on tackling the poverty-related determinants of ill health, which represents a real step change in approach.

I note the forthcoming health impact assessment of the population health impacts of the cost of living. The committee has repeatedly made the case for more systematic use of health impact assessments, including as part of the budget process. I hope that that publication will provide an exemplar for the increasingly systematic application of a “health in all policies” approach to future budgets.

There can be no doubting the huge financial challenges that the health and social care sectors face, but if we are to achieve the goal of placing health and social care finances on that sustainable long-term footing, we as policy makers must retain a focus on longer-term planning, preventative healthcare and an integrated whole-system approach, fostering innovation, effectively measuring our progress and improving long-term outcomes.

I realise that Sue Webber is speaking for the committee. Is it the committee’s thinking that we should give a bit more to the colleges and a bit less to universities?

I welcome the opportunity to speak on behalf of the Constitution, Europe, External Affairs and Culture Committee. We focused our pre-budget scrutiny on the culture spending portfolio. I thank all those who attended our round tables and who submitted evidence to the committee.

Although culture spend represents a relatively small proportion of the budget, the return on investment in culture, heritage and the arts is significant. Culture enriches our lives and provides a platform for innovation. It is of strategic national importance, from Edinburgh’s festivals, which attract more than 4 million people to our capital each year, to Scotland’s screen sector, which contributes £500 million to the economy and is set to become a £1 billion industry by 2030. Our grass-roots cultural organisations work in communities up and down the country to change lives every day. Scotland’s cultural heritage is intrinsic to who we are as a nation. It plays a crucial role in how we market and position ourselves globally—Burns night, which was last night, is just one example of that.

Over the past year, the budgetary challenges that Scotland’s culture sector faces have become much more acute. The evidence that the committee heard was clear and sobering. The committee found that the culture sector is experiencing significant financial pressures, which are, as Iain Munro of Creative Scotland said, driven by a “perfect storm” of reduced income generation, increased operating costs and longer-term budgetary pressures. That comes as the sector struggles to recover from the Covid-19 pandemic and has been compounded by the cost of living crisis that is affecting us all—indeed, we heard that the cost of living crisis presents

“an even greater short and medium-term challenge”

to the culture sector than the pandemic did.

Let us not forget that culture was among the sectors that were hardest hit by the pandemic. We were told that the emergency support that the Scottish Government provided had been essential in helping many cultural organisations to stay afloat. Now, however, the sector’s already fragile recovery from the pandemic is in doubt, as cultural organisations are vulnerable to significantly increased operating costs. That has followed on from longer-term budget pressures for the culture sector, which go back to 2010. In its session 5 report “Putting Artists In The Picture: A Sustainable Arts Funding System For Scotland”, the Culture, Tourism, Europe and External Affairs Committee pointed to a

“real-terms reduction in funding for the arts”.

During the Constitution, Europe, External Affairs and Culture Committee’s evidence sessions, Sir John Leighton, who is director general of the National Galleries of Scotland, said that

“we face a funding challenge the like of which I have never before witnessed or, indeed, imagined.”

He made it clear that the roots of the challenges

“lie in patterns of funding across a longer period”.—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 29 September 2022; c 24.]

Creative Scotland’s core revenue budget has reduced in real terms by approximately £13.1 million since 2010-11. The impact of the longer-term pressures, combined with further fiscal pressure arising from the recent resource spending review, featured as a key theme in the evidence that the committee received. If the spending review plans prove accurate, funding for culture and major events will fall in real terms by an estimated 4.7 per cent by 2026, despite being protected in cash terms.

This year’s budget settlement for Historic Environment Scotland and the National Galleries of Scotland was welcomed and was said to provide a “year-long breathing space”. However, the rationalising of estates, which Mr Gibson spoke to earlier, is a very different challenge for Historic Environment Scotland than it is for other organisations. Funding for Creative Scotland is down by more than 10 per cent, but that will be offset by national lottery income and reserves while the Scottish Government faces budget constraints. Although we welcomed hearing the cabinet secretary’s reasoning for that decision at committee, it is not recurring money and therefore not a long-term solution.

The committee recognises that other areas of the budget are also under considerable pressure, so there are no easy budgetary solutions in tackling the considerable difficulties that the culture sector faces. However, there must now be an increased urgency to accelerate innovative solutions to the funding challenges that culture faces. That includes the development of additional public and private revenue streams for the sector.

The committee wants progress to be made on establishing a percentage for the arts scheme, which has been consistently proposed by our community and third sector organisations. We should also consider how the culture sector could benefit from the proposed transient visitor levy, given the role that culture plays in attracting visitors to Scotland.

The committee has discussed at great length the mainstreaming of culture across portfolios. We would like to see consideration of investment in culture from other budget lines and a reappraisal of what is considered to be health spending. That should include recognising the contribution that preventative spend in the arts makes towards health and wellbeing—whether that is through projects such as choirs for sufferers of dementia or chronic obstructive pulmonary disease or craft classes to tackle isolation, stigma and mental health problems. On the Scottish Government’s aim of redirecting funding towards demonstrable preventative approaches, we need to see progress.

The committee has made all those recommendations previously and, in the face of the “perfect storm” that I described earlier, we reiterate them because the evidence that we have received suggests that a strategic approach is still lacking when it comes to mainstreaming culture. To quote Sir John Leighton, the ambition to embed culture in health and wellbeing is

“still rotating in mid-air; it is rhetorical”.—[Official Report, Constitution, Europe, External Affairs and Culture Committee, 29 September 2022; c 45.]

The committee welcomes the cabinet secretary’s reassurances that closer cross-portfolio relationships are being developed, but we need to see that in action.

I turn to multiyear funding—

I apologise, Presiding Officer. I shall leave my remarks there.

It is my pleasure to speak on behalf of the COVID-19 Recovery Committee on our pre-budget scrutiny work. I thank all those who gave evidence to the committee and responded to our call for views, which informed our letter to the Government in advance of the publication of the budget documents in December. I know that stage 1 of the Budget (Scotland) (No 2) Bill is coming up, but I think that it is important that we have this debate today to hear how the pre-budget scrutiny work of committees has helped to influence and shape the Scottish Government’s budget.

Our committee agreed to focus its scrutiny on the on-going costs associated with the pandemic, as set out in the Covid-19 strategic framework, and on how the Scottish Government has planned to fund its Covid recovery strategy. We were interested in the read-across between the strategic documents and the Scottish Government’s other fiscal documents such as the resource spending review, the medium-term financial strategy and the “Equality and Fairer Scotland Budget Statement 2022-23”.

Before I go on to talk about our pre-budget work, I would like to say something. Although we are, thankfully, no longer in an emergency situation, for a lot of people, Covid is not over. That includes in particular those who have suffered loss and those who are trying to cope with long Covid, and I offer my sympathies to them. Those people are always at the forefront of our minds in our work on pre-budget scrutiny and on the recovery strategy and the strategic framework, with no exception.

In its pre-budget work, the committee heard evidence on three main themes: Covid recovery and the cost crisis; on-going Covid and pandemic preparedness associated with the strategic framework; and the outcomes-based budgeting and policy evaluation associated with the recovery strategy. The committee also touched on the wellbeing economy and considered the read-across between the Scottish Government’s strategic documents and how they support the Government’s stated aim of achieving a wellbeing economy. I will take those themes in turn.

First, on Covid recovery and the cost crisis, we asked the Government to clarify whether budgetary and inflationary pressures had impacted on its priorities and its ability to deliver on the outcomes as set out in the Covid recovery strategy. As we have already heard in the debate, the Government has confirmed that the cost crisis has indeed had an impact, but it is still committed to making progress towards the shared Covid recovery strategy outcomes. The response to our pre-budget letter also highlighted that the recovery strategy will run up to September 2023.

We asked the Deputy First Minister about that last week, when he came to give evidence on the budget, and he explained that the aim is to mainstream Covid spend across all portfolios. I fully expect the COVID-19 Recovery Committee to be involved in ensuring that that mainstreaming is done effectively.

We also called for more clarity and transparency on funding directed at achieving the priorities and outcomes that are set out in the recovery strategy, and more detail on the evaluation and effectiveness of those funding allocations. I was pleased that the Government agreed that budget transparency is important. Its response highlighted its commitment to the delivery of the national outcomes as set out in the national performance framework and the fact that its budget was set accordingly. This is an area of continued interest to the committee, and I will talk more about it later.

Turning to the on-going Covid costs and the pandemic preparedness associated with the strategic framework, we considered the report of the standing committee on pandemic preparedness and its recommendations, and looked at the budgetary implications of the on-going cost of dealing with Covid. We asked for an assurance that the Government would commit additional resources to implement the strategic framework, if that was required to respond to a new variant of concern or a mutation in the future.

That point was made by a number of witnesses, and the Government has said that it remains alert to the threat that is posed by potential new Covid variants. It also pointed to the plans published by Public Health Scotland that set out the processes that will be undertaken to identify and assess any future risk.

We also heard about the importance of funding the on-going activities in relation to vaccinations, surveillance, testing and personal protective equipment, and were reassured by the Government’s commitment to allocate funds for those measures.

On-going surveillance, in particular, was an issue that we focused on and have since explored further. We wanted to understand how the waste water surveillance played a major part in identifying Covid outbreaks during the pandemic, and how that, and genomic sequencing, can continue to be used in the event of any further outbreak.

We looked at what future investment might be needed in surveillance measures and genomic sequencing for the on-going Covid-19 response and future pandemic preparedness. I am sure that members from all parties would agree that we do not ever want to be in a position in which we are unable to respond to another variant that emerges. It is important that, despite the current fiscal pressures, the Government allocates appropriate funding to pandemic preparedness and on-going surveillance measures.

We heard that good preparedness measures require a baseline level of funding and that project funding is not sustainable in terms of recruitment. With regard to the learning around PPE, we heard that stocks should be actively used rather than being warehoused.

I will turn briefly to the outcomes-based budget and policy evaluation, which is an issue that is of continued interest to us. In considering the funded policies that are contained in the recovery strategy, we were keen to know how the success or otherwise of certain policies can influence future policies and Government budgets. We explored the Organisation for Economic Co-operation and Development’s Covid-19 recovery dashboard, which was developed to monitor how different countries are performing in the context of recovery. While giving evidence, the Deputy First Minister acknowledged that one of the challenges in deciding public expenditure priorities is assessing the most effective use of public expenditure at any given moment.

In light of the evidence that the committee heard, we recommended that the Government consider the OECD Covid-19 recovery dashboard and explore whether Scotland should adopt a similar approach to monitoring its recovery from the pandemic. Indeed, we considered the OECD dashboard in more detail just last week in advance of our session with the Deputy First Minister. In response, the Government again referred to the national performance framework and its similarities with the dashboard as a tool for measuring recovery through the stated outcomes relating to Scotland’s economy, environment and wellbeing.

Finally on the wellbeing economy—this will have been of interest to other committees—we heard differing views on what exactly constitutes a wellbeing economy and that it is not clear how the national performance framework is used as a policy decision-making tool to help to deliver a wellbeing economy.

I will conclude. It is worth reiterating that one of the core objectives of the budget process is to improve transparency and raise public understanding and awareness of the budget. I believe that our pre-budget scrutiny has achieved that objective in relation to Covid spend.

I am pleased to speak in the debate as convener of the Criminal Justice Committee. I thank the committee clerks for their support during the budget scrutiny process and I thank all the members of the committee, who worked collegiately together during it. I would also like to thank the cabinet secretary for his attendance at committee on 23 December last year to give evidence as part of that process.

The justice spending portfolio covers the important work of our police and fire services, our prisons and courts, and many other key bodies which are critical to the safety of the public, such as third sector charities. It is for those reasons that the committee was concerned to read the resource spending review of May last year, which proposed flat-cash settlements for the years ahead. The Scottish Parliament information centre estimated that that would mean that resource spending in our remit could fall in real terms by £102 million, and that capital spending might also decrease in real terms by £5.2 million.

For individual bodies, such as Police Scotland, the Scottish Prison Service and the Scottish Courts and Tribunals Service, we had been looking at real-terms reductions of nearly 8 per cent, according to SPICe. Clearly, that would have had a very significant implication for criminal justice bodies—indeed, much of the evidence that we heard from different organisations was stark and reflected their concerns about the potential impact on their function, staff and effective delivery.

I thank all of those who gave evidence to us and for the candid way in which they set out the challenges ahead, such as how they could fund decent pay increases for their staff if the resource spending review plans were to come to pass. For example, Police Scotland told us that every 1 per cent increase in police pay in the future would cost £11 million per year to fund, which equates to around 225 staff; hence, a 5 per cent pay increase would cost about £222 million per year and could equate to a reduction of just over 4,400 officers and staff if no extra money was forthcoming.

Similarly, the Scottish Prison Service’s chief executive said:

“there is no or at most, very limited, opportunity to the scaling back of”

its

“operations without significant risk to health and welfare support ... reputational damage, the loss of”

services

“and the risk to operational stability across the estate.”

We heard that, in our courts, the Scottish Courts and Tribunals Service

“might have to reduce summary and civil business by up to 25 per cent, cut back on the £3 million that goes into the budget to pay for part-time judiciary and look at the unpalatable option of reducing staff numbers.”—[Official Report, Criminal Justice Committee, 2 November 2022; c 5.]

We also heard from senior staff in the Scottish Fire and Rescue Service that savings of between £29 million and £43 million would equate to a reduction of approximately 780 whole-time firefighter posts, or around 20 to 25 per cent of the whole-time firefighting workforce.

It is for those reasons and others that the Criminal Justice Committee said that the Scottish Government should find extra resources in its budget to provide a better settlement for organisations in the criminal justice sector than that proposed in the resource spending review.

The member talks about the Government finding extra resources, and our committee convener talked about how we need to balance the budget. Did the Criminal Justice Committee have any suggestions about where those resources should come from; for example, should we cut the NHS budget, raise tax or something else?

I think that it is uppermost in everybody’s minds, not just those of committee members, that if we are to increase a budget somewhere, we need to look at where that will come from. We were certainly very conscious of that, but our priority in the budget scrutiny process was to look at the evidence that we were taking from the sector and reflect it in our report to the cabinet secretary.

We also said that any extra resources that could be provided needed to do more than just be used to support any pay increase awards in the sector.

In his response to our budget report, the cabinet secretary gave assurances that he had

“no intention of overseeing a budget for the police force that results in 4,000 officers leaving”,

and that he also wanted to protect the provision of high-quality services in our prisons and courts.

I welcome those assurances and I welcome the fact that the cabinet secretary has been able to negotiate an additional £165 million of investment to address the significant pressures on the justice system. I note also that the capital budget for the sector will increase by £37.4 million in 2023-24, which is very welcome.

We know that the cabinet secretary has had to make some hard choices here, and I trust that our pre-budget scrutiny and the evidence that we took have helped him in the process of decision making. However, I note that, despite the extra resource, some difficult choices will have to be made.

The committee will be happy to work in partnership with the Scottish Government and other criminal justice bodies in 2023-24 and beyond, to prioritise spending and to make best use of the money that is available.

I welcome the opportunity to speak on behalf of the Social Justice and Social Security Committee in the Finance and Public Administration Committee debate on the Scottish budget.

During this budget cycle, we have been acutely aware of the challenging economic circumstances in which the Scottish Government has prepared its budget. Notwithstanding that, the committee has been keen to ensure that budgetary decisions within its remit focus on protecting people on low incomes, as they are most affected by the cost of living crisis. Crucially, that includes the third sector, which provides vital support to some of the most marginalised groups.

To support that work, the committee has also examined how the Scottish Government is taking a human rights approach to its budget decisions and what that means for achieving social justice and addressing inequality. The cost of living crisis has brought poverty and the right to an adequate standard of living into sharp focus. The Scottish Human Rights Commission drew our attention to the need for poverty to be viewed in human rights terms and emphasised that

“Poverty represents a failure (a violation) to fulfil the right to an adequate standard of living that is established in international human rights law. Other rights, like the right to education, to work and decent working standards, to health and adequate food and adequate housing, are also affected by poverty ... Poverty, viewed through this lens, is thus best viewed as a cluster of human rights violations in Scotland.”

The Scottish Government has prioritised tackling child poverty—it is one of the four key priorities that it set out in the resource spending review. We welcome the increase in the Scottish child payment to £25 per eligible child per week, which the cabinet secretary has indicated should reduce relative poverty to 1 per cent below the interim target of 18 per cent. Of course, we will not know whether that is the case until statistics are available in 2025. The committee will therefore keep a watchful eye on progress throughout this parliamentary session.

With inflationary increases eroding the value of financial interventions, we actively encourage other committees to keep challenging the Scottish Government to tackle child poverty through policies that lie within their remit. Social security is just one way to invest in people.

The committee notes that, in 2023-24, the Scottish Government needs to find £776 million above what it receives in social security block grant adjustments, which is more than double what is needed this financial year. According to the Scottish Fiscal Commission’s recent forecast, that funding requirement is expected to continue to grow, reaching £1.4 million by 2027-28. How to address that gap and the impact of the cost of living crisis proved to be a little more controversial for the committee. However, we wait to hear the outcome of the review of the fiscal framework and whether that will ease the pressure. Still, the fact remains that social security is, rightly, a demand-led budget and that, as such, funding will need to be made available.

It is therefore critical that we double down on preventative measures. We heard that for preventative policies to make a difference and to lead to sustainable and consistent improvements, such measures need to be funded over the longer term. We took evidence from the Deputy First Minister on the £53 million in-year cut to employability funding. The committee was concerned that that would slow down progress on parental employment, which is a preventative approach aimed at reducing child poverty. We recommended that the cut should be time limited and asked the Scottish Government to provide a timescale in which the funding will be reinstated to the level before the cut. In response, the Government has committed to reinstating funding for 2023-24.

As I set out at the beginning of my speech, we have maintained our focus on the funding issues that the third sector faces. The issues that the sector is experiencing are long running. However, the pandemic, which was swiftly followed by the cost of living crisis, has seen the situation worsen to levels that have not been encountered previously.

Voluntary organisations face increased costs, including transport, supplier and materials costs, and rent—the most significant costs are energy and staffing. The Scottish Council for Voluntary Organisations reminded us that the sector provides public services. It advised that

“voluntary organisations employ more than 135,000 people, which is 5 per cent of the Scottish workforce.”

The Poverty and Inequality Commission explained the impact on volunteers. It told us that

“volunteers who were offering to drive to deliver packages and care support to people can no longer afford the fuel”.

On the consequences of single-year funding on advice services, the Child Poverty Action Group said that

“short-term funding means that they cannot take someone on and train them up, because by the time they have done that, the funding will be over and the person will have had to leave.”—[Official Report, Social Justice and Social Security Committee, 22 September 2022; c 22, 25, 28.]

The Scottish Government has acknowledged that the sector needs stability of funding and the opportunity for longer-term planning and development. The Cabinet Secretary for Social Justice, Housing and Local Government advised us that the Government has adopted fairer funding practice, and that it is committed to increasing multiyear funding, with multiyear settlements as the default wherever possible, which is a welcome step forward. We will, of course, follow progress to see whether that approach is having the desired impact on the sector, as we are aware that other grant funders also need to deliver multiyear funding.

Before I come to the end of my speaking time, I would like to cover homelessness. Having a place to call home is an important aspect of an adequate standard of living. Following publication of the budget, Shelter Scotland raised concerns that funding for homelessness services had been frozen and that funding for the delivery of new social homes had been cut, impacting on the Scottish Government’s international obligations on the progressive realisation of rights.

We asked the cabinet secretary about that. She clarified that funding

“for the affordable housing programme remains at £3.5 billion.”

However, she recognised that that translates to a real-terms reduction from the previous budget, which, the cabinet secretary noted, is due to the

“impact of high inflation”

and

“a 3.4 per cent real-terms reduction in our UK Government capital allocation between 2022-23 and 2023-24.”—[Official Report, Social Justice and Social Security Committee, 19 January 2023; c 15.]

However, the cabinet secretary did highlight that the Scottish Government was taking “steps to mitigate” the impact. On funding to eradicate homelessness, the cabinet secretary hoped to have two clear purposes—a reduction in the use of temporary accommodation and the prevention of homelessness—which would bring about a “sharper focus”. Again, we will continue to scrutinise progress in that area.

In conclusion, we have used our scrutiny to ensure that the Scottish Government’s budget takes account of low-income households and the impact of poverty and related preventative actions.

We acknowledge that this coming year’s budget is set against a very challenging fiscal context, not least because of the current cost of living crisis. It is essential in times such as these that the budget works to maintain the right to an adequate standard of living for the people of Scotland.

As the Finance and Public Administration Committee, we have quite a focus on the budget for a fair part of the year. At the risk of repeating what I have said in previous years, the Scottish budget must be as fair as we can make it and meet as many needs as it can, but it must also be affordable, so it can never meet every need as we would, ideally, like it to.

In the first place, I very much welcome the effort to increase our resources so that we have more to spend on vital public services such as the NHS and local government services. I welcome the income tax increases, which add just 1p to the 41p and 46p rates.

The UK tax system is far too complex and inconsistent. As long as national insurance remains separate and regressive, and as long as income tax, corporation tax and capital gains tax are not more closely aligned with one another, we will get inconsistencies and artificial behaviour to avoid tax, such as people who are really employees becoming companies in order to pay less tax. As the Deputy First Minister said at our committee meeting on 10 January, such behaviour may be legal but it is also “morally wrong”, because people who live in Scotland benefit from things such as the policy of no university tuition fees and better early learning and childcare, and they should therefore be paying more tax for those advantages.

Most people do not choose which country to live in on the basis of which has the lowest tax. They look at overall quality of life, they want to have a sense of community and, obviously, they want to be close to family and friends.

Although income tax is fairly progressive, which is welcome, our property taxes are not so progressive. That point was made by Professor Anton Muscatelli and the expert panel. I welcome the increase in the additional dwelling supplement from 4 per cent to 6 per cent. It is only a 2 per cent change, but it can help to swing the balance towards first-time buyers and away from second-home owners and those who buy to let, which has to be a good thing. I bought my flat when I was younger, as, at that time, did many people who were on fairly ordinary wages and salaries. However, it has become increasingly hard for younger people to purchase a home, and we need to do what we can to help them.

It is probably worth saying at this point that, in November, the committee had a very useful full-day conference with the Royal Society of Edinburgh on taxation in Scotland, and good papers on taxation have been produced by the Institute for Public Policy Research and others. I strongly believe that we need to get the general public more involved in discussing tax and where we, as a nation, want to go. Do we want to have lower taxes and to see public services decline as a result? Alternatively, do we want to have high-quality public services, with higher taxes to pay for them?

While I am on the bigger picture side of things, I should mention the fiscal framework. I very much welcome the fact that it is being reviewed. I know that we signed up to it fairly voluntarily, but it seems to me that it is fundamentally biased against Scotland. We cannot really compete with London and the south-east of England, so we will keep losing out unless the framework is changed.

Finally, I come to the Scottish Parliamentary Corporate Body budget. I was very concerned by the proposal that the budget for the commissioners and the ombudsman should increase by 8.1 per cent. On top of that, we heard that there are calls for the number of commissioners to increase to 14. We need to remember that that money is being taken away from actual services. Every £1 for the commissioners is £1 less for front-line services.

My final point is about MSPs getting a pay increase of 1.5 per cent. I think that that is reasonable in the circumstances, and I very much welcome it.

Overall, we would all like to do more than this budget can do. However, our room for manoeuvre is limited, and I think that it is a very reasonable and realistic budget in the circumstances and that it should be supported.

It is a pleasure to follow my FPA committee colleague and to hear contributions from everyone who has spoken today. It is refreshing to have light rather than just heat. Many very valuable observations have already been made about the committee’s report, so I shall simply make a few additional observations.

One of my biggest concerns is the flat capital budget. The Scottish Fiscal Commission points out that that is a real-terms cut of £185 million due to a lack of UK Government funding and the impact of inflation. I again emphasise that capital funding is vital for investment in long-term infrastructure improvements and for research and development spending. Typically, Governments will borrow to invest, yet in that matter the Scottish Government has significant restrictions where the UK Government has none. Our unbalanced devolution provides full powers to cut spending but vastly inadequate powers to borrow in order to invest.

I want to raise an issue regarding the data that we have on the Scottish economy. In some areas, such as inflation, we are entirely reliant on Office for National Statistics data for the UK. In relation to understanding our economy, we also have inadequate data on the differential impacts of policy by gender, which is an issue that the Deputy First Minister will know that I continue to pursue with some vigour. In other words, if we are to see more strategic and long-term financial planning, which the committee has rightly called for, it would be purposeful to have all the data that is needed for us to do so. Therefore, rather than a focus on measures that serve no specific policy-making purpose, such as “Government Expenditure and Revenue Scotland”, I would welcome a focus on identifying areas such as the Scottish inflation rate and how our economy serves women as well as men.

There are other areas that could benefit from additional focus. For example, in giving evidence to the committee, Professor Sir Anton Muscatelli pressed the case for serious thought to be given to ensuring that growth results in an increased tax take. One aspect of spurring growth is that it will do more to encourage entrepreneurship and, in that regard, will do much more to support women entrepreneurs who face structural barriers. With that in mind, I look forward with interest to the forthcoming report by Ana Stewart and the tangible Government actions that I hope will arise.

Last week, at the University of Glasgow’s Adam Smith event in Parliament, the Deputy First Minister talked of the importance of empathy and understanding the concerns of others. Smith also wrote of the importance of the rule of law. None of those things is served by the extent of corruption in the UK, where, each year, hundreds of billions of pounds in criminal assets is allowed to be laundered through the City of London—that is vastly more than the entire annual budget of the Scottish Government.

Former chancellor Nadhim Zahawi has been exposed yet again today, with more revelations about his tax affairs and the threatened use of abusive lawsuits to silence Dan Neidle. Even worse, thanks to openDemocracy, we now know that the Treasury under Rishi Sunak helped Putin’s Prigozhin, when supposedly under sanctions, to mount a targeted legal attack on a London journalist.

There is a financial cost to corruption and a lack of ethics, and it does not just remove money from our gross domestic product. Ultimately, it results in fewer doctors, teachers and nurses, and it presents a risk to Scotland’s global brand of probity.

I welcome the opportunity to contribute to the debate as chair of the Scottish Commission for Public Audit. The SCPA’s main role is to scrutinise Audit Scotland’s budget proposals and accounts. Last Friday, we published our report on Audit Scotland’s budget proposals for 2023-24. Unusually for the SCPA, we did not make a recommendation that the Parliament approve the total budget.

Audit Scotland describes itself and its role as providing

“politicians, decision-makers and the public with assurance and information about how public money is spent”.

That is more important than ever at a time when public spending has risen sharply in response to the pressures on public services.

In the case of Audit Scotland, though, who audits the auditors? Who provides that scrutiny and assurance about how the public money that is allocated to Audit Scotland is being spent? That is why the SCPA was established, under the Public Finance and Accountability (Scotland) Act 2000. The SCPA provides that scrutiny of Audit Scotland and, in turn, reports its conclusions to the Parliament. By Audit Scotland, we mean the agency that provides the Auditor General for Scotland and the Accounts Commission with the services that they require to carry out their respective duties. Its budget comes from two sources: fees that it charges to audited bodies, and funding that comes from the Scottish consolidated fund and is approved by Parliament.

The SCPA met in December to consider the Audit Scotland budget proposals, specifically the

“£12,050k of Parliamentary approved funding which represents an increase of £563k from 2022-23.”

That figure could be broken down and attributed to six different factors, but I will focus on just a few.

Looking at the increase in fees and expenses paid to external audit firms that undertake work on behalf of Audit Scotland, the SCPA was keen to understand more about what was driving up costs. The budget proposal states that those fees will increase by 56 per cent in 2023-24, equating to £2.55 million. After receiving further evidence, the SCPA noted that the previous fees were unsustainable. It noted the increase in regulation around auditing and that the fees were

“consistent with an ... costing and benchmarking exercise.”

In relation to fees charged to audited bodies, we sought an explanation for the variation across sectors in fee uplifts, in particular in relation to the further education sector, where the average fee increase is 57.5 per cent. Audit Scotland explained in evidence that the fees that it charges audited bodies are informed by the outcome of the procurement process to appoint external audit firms, and that the increase in fees is most acute in the further education sector, due to the size of the organisations and the baseline costs required to deliver an audit compliant with the code of audit practice.

The SCPA was content with the rationale and explanations for most of the proposed increases in funding. Where we had difficulty was in understanding the rationale for a proposed £278,000 increase in support for the Accounts Commission. The commission’s function is to hold councils and other local government bodies in Scotland to account, and it is supported in its work by the staff of Audit Scotland. We noted that the Accounts Commission had already created and was about to fill a full-time role for a controller of audit. The commission also said that it required more staff for analytical work, stakeholder engagement and providing a refreshed website. The SCPA was keen to understand the drivers and assessments for the new post and the associated work.

It was explained to us that the Accounts Commission felt that it should be making more impact and had decided to initiate a change programme. After hearing evidence and requesting additional information, we still found ourselves in the position of not being able to reconcile the asked-for budget of £278,000 with the need for that budget. We needed more substantive detail about the assessments for the work and its budget, and did not feel that a case had been made. We came to that position against the backdrop of the current economic outlook, the cost of living crisis and the difficult choices that are being made on the Scottish budget in seeking the most efficient outcomes in public spending. That is an unusual position for the SCPA to find itself in. We are required to examine the proposals from Audit Scotland—

—and to report on them to the Parliament. On previous occasions we have recommended approval of the proposals as part of the budget. We simply draw the attention of the Parliament to our concerns on the provision of what we see as being insufficient detail on part of the proposals.

May I first take a moment to reflect on Mr Beattie’s point? It is an important one, but I cannot say much about it because it concerns a parliamentary matter. However, the unusual subject matter that Mr Beattie has had to raise is one that the Parliament needs to reflect on. It is a matter not for the Government but for the Parliament, and it is one that it needs to take very seriously indeed.

I am seeking not to get hung up on that technical point. Mr Johnson will understand that it is a rather invidious position for me to be in to be commenting about the auditors. I am simply pointing out to the Parliament that it needs to take seriously what Mr Beattie and the SCPA have put on the record.

Liz Smith made the most revealing comment of the whole debate when she said that in today’s contributions we have looked at the substance, the scrutiny and the evidence, and in next week’s we will get into the party politics. I therefore ask members to forgive me if I pay slightly more attention to what some colleagues say today than I will do next week. That is a little warning.

As he regularly does, Mr Mason gave the Parliament some pretty sobering warnings about the importance of the hard choices that are involved in the budget process and also in the reconciliation of difficult questions about tax. I welcome his support for the tax stance that I have taken.

Mr Mason’s speech was followed by that of Douglas Lumsden, who made a strong argument for more funding for local government but did not offer a single scrap of evidence as to where that money was to come from. That just passes the usual test of contributions from the Conservatives on such questions: it is empty rhetoric.

In his contribution Mr Greer recognised the importance of the budget making provision—as we have had to do by adaptation and amendment in this financial year—for the challenge of public sector pay. On the concerns that I hear from members about the fact that the Government is not yet in a position to confidently set out its route to balance in this financial year, I say that it is not for the want of trying. It is also a measure of the scale of the difficulty and the challenge that the climate of surging inflation represents for us.

There are three principal themes to the Government’s budget. I will reflect on each of them in responding to members’ contributions.

First, in relation to the attack on child poverty, Michelle Thomson made a significant comment, reflecting on the Adam Smith legacy event, that it was important to have empathy for others—to walk in their shoes. If anyone needed to understand that, the contribution that Natalie Don made to the debate—in powerfully setting out the arguments made by the Social Justice and Social Security Committee, and the emphasis on the sustained measures on tackling child poverty—was an important example of such empathy and of understanding such challenges, which her committee has done in focusing on the position of low-income households. It also relates to the point that Claire Baker made about the importance of sustained investment in employability. I am glad that in next year’s budget we have been able to improve the available resources for employability despite the interim cuts that I have had to make this year.

I turn to the theme of net zero. Edward Mountain set out—as did Finlay Carson—some of the inherent challenges in the journey towards net zero but also the necessity of making those commitments. The Government believes that we have put in place, with regard to capital expenditure in particular, the type of support that is necessary in that respect.

The third principal theme of the budget is sustainable public services. Gillian Martin, on behalf of the Health, Social Care and Sport Committee, reflected on the importance of the budget settlement for the health service and on the investment in social care.

Audrey Nicoll, on behalf of the Criminal Justice Committee, reflected on the difference between the budget settlement and the resource spending review, and on the fact that the Government has listened carefully to the challenges to ensure that we properly invest in the criminal justice system and meet its challenges.

Ariane Burgess made clear, with regard to the local government settlement, the importance of the investment that we have made and the need to ensure that that is sustained in the period to come.

In concluding, I will reflect on a couple of other contributions. The first is a point that Siobhian Brown made in relation to the Covid recovery activity. I reassure Parliament and the COVID-19 Recovery Committee, as I did last week, of the importance that we attach to mainstreaming the thinking behind the Covid recovery strategy across the Government’s programmes. One of my priorities in the budget has been to do exactly that.

Lastly, Clare Adamson made a powerful point—

Very briefly.

I might wish to pursue that discussion with Mr Mountain in due course. My feeling would be that what we publish in relation to the carbon assessment should fit his requirements, but if it does not, I am happy to explore that further, because the issue has to be resolved. I think that we are doing enough in that respect, but I will happily explore the matter further.

Clare Adamson made an important point about the relationship between the amount of money that is spent on cultural investment and the disproportionate impact that that has on our society and wellbeing. If I did not know that point already, I would not have been listening to Fiona Hyslop, who for many years, as the longest-serving culture secretary in the Parliament, used to beat me into submission in budget agreements with that very argument. I pay warm tribute to her for that. It is an important point, and I assure Parliament of my sympathy with that view. I reiterate that I want to ensure that we do all that we can to support investment in our cultural sector, recognising that, in the tough times that we are living in, people need to enjoy and appreciate the importance of investment in the culture that makes us who we are as a society.