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My first question is directed to Lynn Brown and to the deputy chief constable. I am interested in the interaction between the Scottish Police Authority and Police Scotland on the design of the policing model and its sustainability, given the extraordinary pressures of inflation that public finances have been wrestling with. What role does the Scottish Police Authority take in scrutinising and challenging the plans and propositions of Police Scotland? Given the fiscal context in which we are all having to operate at the present moment, to what degree is the authority satisfied that Police Scotland is properly and fully considering the appropriate approaches to policing and, flowing from that—this is where the question is perhaps relevant to the deputy chief constable—the process that is undertaken by Police Scotland to assess its role and capacity? Although we are wrestling with extraordinarily high inflation at the moment, we are also experiencing some of the lowest crime levels in more than 40 years. Perhaps Lynn Brown could start on that point.

Those things—any annual or periodic revisions of capital frameworks that are put in place by the UK Government—are tied up with two things. Part of my challenge in this financial year has been that we have had no restating of the budget in the light of the significantly different inflation climate that we face now, compared with when the budget was set. I rehearsed those issues with Liz Smith the previous time I was at the committee.

The budget was set in late 2021, in a context when inflation was benign. Since then— for the whole of this financial year—we have faced raging inflation, which is partly why I am wrestling with the issue that you raised with me in your first question, convener, about the financial pressures in this financial year. There has been no restatement of the budget to take account of that factor. Some of the solution could lie in a restatement of the position.

The other area is the review of the fiscal framework, which is in more of a procedural space where borrowing limits could be revisited and recast. There are discussions to be had with the UK Government on the fiscal framework, and those are at a very early stage.

Frankly, I would question the value of any conversation with most of the people I have been dealing with over the interim period during which I have been acting as finance secretary, because of the degree of churn, if I could put it as delicately as that.

Could I come in on that point, convener? You alight on an important question.

I am not familiar with the status and nature of ACS. However, at the business in the Parliament conference, I had the privilege of talking to the chief executive of Dovetail Enterprises in Dundee, which is a furniture and mattress manufacturing facility. I think that it would be fair to say that Dovetail Enterprises is a social enterprise—that would be the best description, as it reaches out to create economic opportunities for people who are often remote from the labour market.

One of the projects that the chief executive talked about was the company’s success in landing the contract for furnishing and equipping the Social Security Scotland offices in Dundee. Having been in those offices a few weeks ago, I can attest to the quality of its product. That was a perfect example of how public expenditure through public procurement done properly can result in beneficial social and economic outcomes. There are people who are in the labour market or actively engaged in labour who would not be, were it not for the degree of support that they have had through employment at Dovetail Enterprises. It will be exactly the same in the example that you cite, convener.

That goes back to one of the points that Liz Smith made to me in a slightly different context. It is for employers to think about how they might be able to engage and activate people who are not active in the labour market and for them to be open to doing that. Not everybody will be prepared to work with ex-offenders, but we need to help people to get their lives back on the road.

I do not think that it says that; it simply says that that is the best estimate that we have. A financial memorandum looks at the position many years hence. Operational decisions are taken about the expected expenditure for any particular programme. Those numbers will be constantly reviewed. As I have tried to explain to the committee previously, the Government is concentrating on the preparations in two respects—getting the initial organisational arrangements in place and boosting the salaries of social care workers—which is why we have allocated a substantial amount of money in the budget to enable those to happen.

I acknowledge the risk of behaviour change—I am not denying that it is a factor. Our response is to say that, from the information that we have, we have not seen evidence of people relocating for tax purposes. That does not mean to say that there may not be a certain amount of behavioural change in the way that income is accounted for or tax arrangements are made, which are tax planning practices that are quite different from relocating.

We are also quite early in the era of tax divergence between Scotland and the rest of United Kingdom. We do not have many years’ experience of that divergence. We have to be attentive to the detail and open about exploring those questions. In the policy-making space, we have to be conscious of the risks of behavioural change and factor those into our consideration of what tax changes to make—if any.

It is probably best for me to say that the working group has started its activity. It is difficult for me to predict exactly when the group will report. We are anxious to ensure that early progress is made so that we can consider any implications and have wider discussions with stakeholders about those, given that they would be material for local authorities’ decision making on council tax. I would like that process to be concluded as quickly as possible, although it is difficult for me to give that a definitive timescale. However, I recognise the urgency of that work, which is under way.

I think that what you suggest is an option, but I can just imagine the sight of John Swinney turning up at COSLA headquarters to say, “We’re going to do a top-down reform of local government finance departments”—I imagine that Mr Lumsden would be at the front of the queue to support me in all my efforts. It is possible, but I would much rather encourage a process in which local authorities make the necessary changes at their own hands. I do not think that the Government should be making those changes to them.

Let me express my frustration about that point. You alight on a particular problem. I go back to the world that I used to occupy as education secretary, dealing with 32 education authorities and 32 directors of education. Local authorities are of widely varying sizes, so the director of education in the city of Glasgow and the director of education in Clackmannanshire, for example, will be dealing with fundamentally different propositions. To take the Clackmannanshire example, some years ago, Clackmannanshire and Stirling councils did quite a bit of collaboration and got very close to running a joint education service. Nobody lost their identity or their focus on education. However, the councils decided to dismantle those arrangements, which I think is a point of regret.

There is scope for exactly what you suggest. I have encouraged local authorities to work together on the creation of regional improvement collaboratives among groups of local authorities, in which a lot of good work on education goes on. Shared leadership would help with an awful lot of these things as well.

I accept that that is me beginning to get into the territory of specifying what local government should do. I am left with the pretty strong impression and message from local government that that would not be particularly welcome.

It depends on what you mean by “a blueprint”. If that is a list of office buildings to be rationalised, that is unlikely. I do not think that that is how such a programme should be predicated. We should be starting from a perspective of looking at how to reduce costs, improve efficiency and rationalise the estate and should then challenge public bodies to ensure that that happens.

Some of those things will have to happen because of the financial constraints caused by the budget. That will apply right across the public sector. I hope that the Government’s response to the committee’s report, and the detail that we have gone into, gives the committee more clarity about the direction of travel, but it does not give a list of operational changes that will take place. We can report on those as they take their course.

I am very happy to keep the committee informed about developments in that respect, which I think will address some of the issues.