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It covers a much wider range of sectors. I think it is one or the other, though.

Good morning, convener. I am happy to address those issues with the committee this morning. The local governance review started prior to the election. We have engaged substantively with the Convention of Scottish Local Authorities on the review’s development, and with wider stakeholders across the country to gather input on and consideration of the response to the review.

There are two substantive elements of feedback from that. First, there is what I would describe as the general responses of the public and community organisations, which reflect on the accomplishments of communities, particularly during, but not limited to, the pandemic. The committee heard this morning from a range of community organisations, so it will have heard some of those responses.

Secondly, a range of propositions have emerged from local authorities and community planning partners about how the aspirations of the local governance review could be put into practice. The Government is considering some of those proposals and will respond to each of them with our feedback on the issues and aspirations that they raise. That is essentially what we are focusing on in the aftermath of the review. That forms part of the agenda that will play into the introduction of a local democracy bill in this parliamentary session, to which the Government is committed.

Fundamentally, I come at my politics with the view that decisions are best taken as close to people as possible, which is why I believe in Scottish independence. It is important that people can influence and shape the decisions that affect their lives. Ultimately, a discussion needs to be had about the proper arrangements that are necessary for the exercise of democratic governance.

We have a national health service, for example. I do not hear any argument that suggests that the NHS should be changed in some way from its current composition to having more localised governance. Ministers are accountable to the Scottish Parliament for the delivery of NHS functions, as provided for in statute. Decisions will be taken about where the responsibility for those functions is best exercised—it is not solely for the Government to take those decisions, but for Parliament as well.

A substantive issue that the committee must consider in its work on local governance relates to the Parliament’s view on questions of accountability. I frequently hear members of Parliament pressing the Government to be responsible or to account for certain things that have happened that are not exclusively the responsibility of the Government, but are responsibilities of local authorities or other bodies. Indeed, I regularly answer questions from members on that theme.

Parliament acts in a fashion that essentially wants the Government to be accountable for some of those responsibilities. However, the question on those points is not just for the Government to answer. Parliament must also be clear in its mind about where that accountability should rest and how it should be exercised.

We are taking forward practical discussions on that subject with local authorities, with discussions under way on, for example, proposals for tourism taxes—I cannot remember their formal title. There is an appetite for such a discussion with local authorities, if they wish to have it.

Evidence is available from the Accounts Commission’s scrutiny of the way in which individual services are delivered. The Improvement Service also does a lot of good work on charting the relative performance of local authorities. The range of differences in individual service areas can be quite difficult to justify.

The Improvement Service is there to help local authorities to deliver their improvements, and I very much applaud it for its work, because it is prepared to confront the variation in performance amongst local authorities. If we are to have an honest conversation about this, that point has to be addressed, and the reports from the Accounts Commission and the Improvement Service tend to give an insight on a service-by-service basis into where some of the differences lie.

Mr McLennan is tempting me on to territory that is the proper preserve of the finance secretary, and I will refrain from getting myself into difficulty with her at this time in the budget cycle. It is never a good idea for a cabinet secretary to get into trouble with the finance secretary, so I will leave it to Ms Forbes to update the committee on the substance of the point.

However, as a general observation, I would say that in recent years and for certain wholly understandable reasons, given Covid, Brexit and other factors—you name it—the UK Government has been unable to offer longer-term financial information. However, we now have much greater line of sight in the forthcoming period than we have had, which is very welcome. As for how the finance secretary handles that situation, I shall leave that for Ms Forbes to share with the committee.

Mr Griffin has raised a very serious point. It brings us back to the question of the outcomes that we are interested in achieving with all of this activity, which, in this case, must be that individuals feel that they are able to shape the direction of their community and the place that their lives have within it. As a result, the statistics that Mr Griffin has put to me, which might well show a decline, are concerning.

Interestingly, I thought that, in extremis, during the pandemic, the degree of community leadership, interaction, decision making and adaptation was higher than I had seen it in my many years of experience. That tells us that it is perfectly possible for communities to be much more closely involved in shaping their agenda and direction as a consequence of their interventions.

We must ensure, however, that communities are not disengaged from that process, and that they do not find the process much more difficult to participate in because of the way in which we structure such processes. It is up to local authorities to ensure that they are putting out—as I think they did during the pandemic—a welcoming invitation to communities to shape the nature of the response that is pursued in individual communities. We must ensure that that happens not just in a pandemic but all the time. That is one of the fundamental points of the Covid recovery strategy that I put to Parliament before the October recess: it is about trying to capture and continuing to mobilise that sense of community discretion and influence, which has been such an asset to us during the pandemic.

I would not suggest that ring fencing is a precise science; rather, it is a question of judgment.

As I indicated in my earlier responses to the convener, in 2007, the Government substantively relaxed ring fencing in local authorities. I used to know the numbers off the top of my head, but I am a little rusty nowadays. I think that we reduced ring fencing to about 15 per cent of the local authority budgets, when it had previously been as high as around 70 or 75 per cent. We reduced it because local authorities argued that they would be better able to meet the needs of their local communities in their financial decision making by having that greater degree of flexibility.

That point lies at the heart of Ms Gallacher’s question. Local authorities have that flexibility to meet the different and distinctive needs in their localities because the demand that one local authority needs to meet will be different from that of another. We have tried to address that as far as possible.

When the Parliament wants the Government to ensure that particular outcomes are achieved—the Government might wish to do that, too—the tendency is to introduce ring-fenced funding so that we can be certain that resources are released in expectation of those outcomes. That relates to some of the questions that Mr Briggs put to me and it is often the judgment that is involved in deciding whether resources should be ring fenced or put into local authorities’ general funds.

On Ms Gallacher’s point about the budgets that are available for local authorities, the Government has wrestled with many financial challenges over the past 10 years. As we wrestled with the challenges of austerity, we tried to provide the best and strongest settlements that we possibly could for local authorities.

The Parliament, of course, must agree budget provisions and political parties always have the opportunity to shape the Government’s budget proposals by exerting influence over them. That will be the subject of debate in the forthcoming budget. One thing that strengthens local authorities’ ability to meet the needs in their communities is the degree of flexibility that the Government has provided for them by relaxing ring fencing.

The Government gives on-going consideration to those issues through our dialogue with the Convention of Scottish Local Authorities. I cannot give you a definitive assurance because the issues are still the subject of consideration. The Cabinet Secretary for Finance and the Economy is leading the work on the development of a rules-based fiscal framework, which is being discussed with local government. That work will conclude when those discussions are completed. The finance secretary will be able to update the committee and Parliament on the development of the fiscal framework once that work has been undertaken.

It is important to recognise that, for many years, significant flexibilities have been available to local authorities for their financial management. Back in 2007, when I was the finance secretary, the Scottish Government substantively relaxed ring fencing, which was a key request of local authorities, to enable them to have a range of flexibilities at their disposal. That in itself provided local government with much greater fiscal discretion in order to address issues.

I am not sure that I would establish a connection between proposed industrial action in local authorities and a fiscal framework for local government. Those are two distinct issues. It is, of course, a matter for local authorities to conduct their employee relationships and negotiations—where it is appropriate for them to do so. Local authorities deal with those for the majority of their employees. Teachers are a somewhat different case, because a tripartite negotiating framework is in place. However, fundamentally, it is for local authorities, as employers, to take forward the relationship. I do not think that industrial action necessarily relates directly to any fiscal framework.

A national care service is currently the subject of consultation. One of the key points that the Government has made throughout is the importance of ensuring that appropriate local voices are heard when considering the approach to a national care service. It is vital that we hear from and engage with local communities on the delivery of care services, because they matter to local communities. The situation will be different in different parts of the country, so there must be variation and variety in how the service is delivered. It is critical that we hear the voices of local communities during the development of the national care service. That is a fundamental point.

I accept that local government has particular observations about the proposals, and it is important that we hear the voices of individuals who are pressing the Government—as was evident in the independent review—on issues such as the consistency of service performance and delivery in different parts of the country, and the standards that citizens can expect in all parts of the country. Those two fundamental questions have to be wrestled with during the discussions on a national care service.