³ÉÈË¿ìÊÖ

Thank you for that opening statement.

Over the 10-year period, total costs under the revised proposals will now amount to between £631 million and £916 million, which is a variance of around 45 per cent. The estimated costs over the equivalent 10-year period were between £880 million and £2,192 million, which is a variance of around 150 per cent, so there has been a huge improvement in terms of variance and in what costs have been assessed as.

As you said in your opening statement, that means that the revised proposals represent substantially lower overall costs, which are estimated to be between £249 million and £1,276 million. If the committee had accepted the previous financial memorandum, over 10 years the Scottish Government and the Scottish Parliament would have been between £249 million and £1,276 million worse off, and we would have had all the issues of transfer of staff and so on, which will now not be included in the bill.

However, the central issue that we are dealing with is that, given the dramatic changes that have been made to costings and the reassessment by the Scottish Government over the past year or so, how can we have faith in the figures that are being presented for that 10-year period?

Thank you for that. I note that in the financial memorandum, in every area of cost, from financial year 2023-24—the current year—until 2031-32, which is an eight-year period, it looks as though there will be a 41.5 per cent estimated increase in costs. That appears to be assessed by assuming a 2 per cent inflation rate plus a 3 per cent increase in real terms. Therefore, we are talking about a 25 per cent increase in real terms. Given the fact that the Scottish budget is not growing at 3 per cent a year in real terms and is—it seems to me—unlikely to do so, how can you be confident that those figures are sustainable and deliverable?

Yes, but I just do not know how that will be sustainable, given the current projections by the Scottish Fiscal Commission.

You talk about CPI, and the committee has discussed types of inflation. Whether we like it or not—I am not one who really likes it—using the GDP deflator is unrealistic, especially when we think, for example, of salary increases in the past year or the expense on capital.

However, the reality is that the Scottish Government has used the Treasury GDP deflator across its current budget. It just seems to be a wee bit out of kilter to use a measure that other areas of the Scottish Government do not seem to use. Why was it decided to use the GDP deflator here when CPI is being used elsewhere in the Scottish budget? The issue that you talk about with salaries and so on is understandable, but that is the case with other areas of the Scottish budget. We still have to use the GDP deflator.

Is that inflator artificially low? Is it artificially low across the entire Scottish budget?

How much of that work will come in at stage 2?

The updated memorandum presents some of the costs associated with the NCS national board, but they are quite varied—they vary from £20 million to £29 million. However, the estimated costs have been rounded up to the nearest million, with the result that any costs below £0.5 million have been rounded down to zero. That makes it difficult to understand the detail of the costings and whether certain costs are indeed zero or simply fall below the threshold.

Why has more detail not been put into that? If something costs £421,000 and something else costs £385,000, why not just add all the figures up in order to narrow the variances? We have been presented with bald figures that have been heavily rounded; it is almost as though they have been plucked from somewhere, rather than assessed effectively.

Okay. Thanks. I call Liz, to be followed by Michael.

It is just that, if people know that they are working to a four-year deadline, it does not exactly create any oomph behind the delivery of a bill. If they know that it is expected to be delivered in a year or two, it creates a greater sense of urgency. I find it bizarre that a bill with less content than it had a year ago now has twice as long to be implemented. I am wondering what the logic for that is. I know that you have said that you have been pessimistic, but I prefer realism to optimism or pessimism. It is quite a significant increase in the timescale for a bill that is not as complex as it was a year ago.

I am struggling to have confidence in the process, given how far on we are. It is 15 months since we last discussed and deliberated on the previous financial memorandum. One would have thought that some of this would have been pinned down a bit more by now. However, I will move on, as colleagues will want to come in with further questions on that area.

One issue that has concerned the committee from the start has been co-design. As a committee, we are much more in favour of having primary legislation, for scrutiny reasons and because it helps to pin down costs. The problem with the framework and co-design approach is that there are increased uncertainties around the cost estimates and the timing of those costs.

Given that it has been around 15 months since we last deliberated on the financial memorandum, how have we moved forward in terms of co-design? How much of that co-design will now be incorporated into the primary legislation, perhaps through amendments at stage 2?

Given the length and detail of your answer, it sounds as though we are in a situation whereby we still do not really know where we are with the national care board. The stage 1 debate will take place in only a few weeks. I know for certain that parliamentarians will want answers and will demand them of the minister in that stage 1 debate. When will the hatch be battened down in that regard? Will we have that information before the stage 1 debate?