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To reiterate what Kate Forbes said, a huge amount in the budget is aimed at Covid recovery, supporting household budgets and tackling poverty. That has meant that difficult decisions have been made because we cannot fund everything.

The budget provides for a continuation of child bridging payments in advance of the doubling of the Scottish child payment by the end of the year. Other measures help low-income families, such as the scrapping of core curriculum charges and music tuition fees, the expansion of the school clothing grant and the extra £64 million of revenue funding and £30 million of capital funding to support the expansion of free school meals.

As I said in my opening remarks, more than £80 million is being allocated to discretionary housing payments for housing support. That is to fully mitigate the UK Government’s bedroom tax. If we did not have to use that money to mitigate the bedroom tax—if the bedroom tax was scrapped at source, which we have urged the UK Government to do—we could divert it to other anti-poverty measures but, meanwhile, we have to maintain that funding.

We are making a further £10 million available for our ending homelessness strategy. The housing budget is an anti-poverty measure in itself. Affordable good-quality housing is a key anti-poverty driver and being able to increase funding by £174 million against the backdrop of a really tough budget has been extremely important. That budget is also an important economic lever, as it ensures that we can support local economies through the house building programme.

In the round, the budget tries to focus on supporting household incomes and families on low incomes at a very difficult time.

I will start, then hand over to Kate. We obviously want to avoid strike action and hope that the unions, local government and COSLA will continue to discuss pay so that strike action will be avoided.

Mark Griffin mentioned local authority pay. Although it was difficult to do so, I was able to find in my budget a one-off payment of £30 million to support COSLA in its pay negotiations for this financial year. That is not baselined into next year.

I appreciate what Mark Griffin has said. I hope that we can avoid strike action, and that pay discussions will continue and come to an amicable resolution.

I thank the committee for inviting me to today. I, too, will be brief.

To reiterate what Kate Forbes has said, I say that developing the 2022-23 budget has been challenging and has involved making difficult decisions and choices, but the ones that we have made should help to lift children out of poverty, provide investment in social care and help to tackle the climate emergency.

Our budget for next year will increase funding for affordable housing by £174 million, so we can continue with the important work that was started back in 2007 to ensure that everyone in Scotland has a warm, safe and affordable place in which to live. We are allocating £831 million to delivery of 110,000 affordable homes by 2032, of which at least 70 per cent will be available for social rent, and 10 per cent will be in our remote, rural and island communities. More than £80 million will be allocated to discretionary housing payments for housing support and to mitigate fully the UK Government’s bedroom tax. We are making a further £10 million available for our ending homelessness together fund, as part of our investment of £100 million in transformation funding between 2018-19 and 2025-26.

The 2022-23 budget provides our local authorities with a fair but affordable settlement of more than £12.5 billion under the most challenging of circumstances. That will provide £554 million extra for health and social care, £145 million for additional teachers and support staff and £94 million to support the expansion of free school meals. It gives local authorities a number of fiscal flexibilities, including full autonomy on council tax rate setting, as they requested, and a commitment to collaborate on a fiscal framework for local government.

I look forward to your questions.

My first response to Meghan Gallacher is to say that the Scottish Government’s budget comes, by and large, from the block grant that we receive from the UK Government. We have had years of austerity, and difficult decisions have followed the settlement.

If we compare the funding situations north and south of the border, it is clear that the challenges that Scottish local authorities face are in a different ballpark from the challenges and cuts to local government funding that local authorities south of the border have faced.

Meghan Gallacher talked about funding above the core settlement. We have many key joint priorities with local government, including tackling child poverty and ensuring that we support education and social care. The money going into social care has increased considerably. I hope that those priorities are shared across the Parliament.

Difficult decisions have to be made. As part of the budget discussions, it is open to parties to come forward with amendments to the budget, but a party wanting more money to be spent in an area of government requires that the party say where the money should come from. I am sure that we will get into such detailed discussions over the next few weeks.

I do not have much to add to what Kate Forbes has said, other than my comments on the record that we appreciate and recognise the extraordinary efforts of council workers and the role that they and many others across the public sector have played in the fight against the pandemic. As Kate Forbes has said, we are not a member of the SJC, and pay negotiations are a matter for local authorities.

As Kate Forbes said, there is a good and very close working relationship with COSLA. As she does, I meet COSLA’s leadership regularly and, as she has done, I have met a number of individual local authority leaders and chief executives. That was really useful in getting into the detail under some of the priorities. Affordable housing is a key priority for nearly all local authorities; we managed to discuss it in those individual meetings. A number of projects and examples of potential collaborative working have emerged from those meetings, which is helpful.

There will, clearly, be a number of major pieces of work on the fiscal framework, on Covid recovery—which is key—and on tackling child poverty. We take a collaborative approach with COSLA; I know that local government is committed to working with us to tackle child poverty. The debates that we have on the quantum and the figures sometimes do not tell the full story about the work that goes on behind the scenes between the Government and local government on shared joint priorities.

As I set out in my opening remarks, the affordable housing budget is increasing by £174 million, which breaks down to a £40 million increase on the previous published capital spending review figure and an increase of £134 million in financial transactions. That brings the total that is available for affordable housing across the parliamentary session from £3.444 billion to £3.618 billion, which is a 21 per cent increase compared with the previous five years. That will be phased across the five years, and the figures will differ from year to year, but what is important is the quantum across the five years.

We are well aware of some of the pressures that are on that. We know that the construction industry faces on-going market condition pressures, which is why there will be a targeted review of the Scottish Government’s capital spending review in early 2022, alongside the resource spending review. That will be important. We need to ensure that the investment delivers the affordable housing that is badly needed across Scotland, and we know that it will go a long way towards doing so.

At the heart of the regulations is a set of basic safety standards. I hope that we agree that all premises should comply with that set of basic safety standards. As you said, some are already doing so, and if others are not, they should be. That would create a level playing field to ensure the safety of those using those properties, which is at the heart of the measures.

Murdo Fraser then talked about bed and breakfasts. As I said, the set of mandatory standards, which will help to protect the safety of guests, should apply to the whole self-catering sector. Many bed and breakfast hosts will already be following the standards as a matter of compliance with existing law or best practice; therefore, we do not consider the standards to be onerous.

B and Bs have been included from the beginning, and one of the important reasons why is that, if they were not included, a number of premises would potentially be relabelled as B and Bs in order to avoid licensing. That concern was expressed during the consultation. It would be very difficult to define B and Bs in order to differentiate them from other types of provision. Therefore, we took the view to leave B and Bs in the scope of the licensing proposals. The relabelling issue would have been a considerable concern should they have been excluded.

The principle is cost recovery only; local authorities cannot go beyond that. The guidance will set out in more detail what we think is important to make sure that local authorities are following that principle. We want the scheme to be proportionate, not onerous. The guidance will be clear on that.

Yes, that issue affects a small part of the sector. In the main, the sector is law abiding and provides good and safe premises for people to use. I want to put that on the record.

Undoubtedly, there is some criminality. The evidence that was given by Nicola Robison shows the importance of having the fit and proper person test as part of the licensing scheme. That is critical because Police Scotland would be able to flag up any concerns about someone not being a fit and proper person. That could be used by the local authority in deciding whether to grant a licence. There is a small element of criminality, but that is not something that we can ignore.