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Good morning, and welcome to the 26th meeting in 2023 of the Finance and Public Administration Committee. We have received apologies from Ross Greer, and I understand that Jamie Halcro Johnston is travelling and that he will be delayed.

We have one item in public on today’s agenda, which is an evidence session on the financial memorandum to the Circular Economy (Scotland) Bill. I welcome to the meeting Charlie Devine, service manager, waste partnership, Dundee City Council; Kirsty McGuire, waste manager, South Lanarkshire Council; and Jim Jack, head of operational services, West Lothian Council.

I intend to allow up to 75 minutes for this session. We have written submissions, so we will move straight to questions.

I will go to Mr Devine first because we set out a number of questions, as we do for all financial memoranda, and, unlike his colleagues, he completed the first three. We will therefore put him on the spot first. If his colleagues wish to chip in, I would, of course, be more than happy for them to do so.

You were asked to comment on the financial assumptions that were made. Dundee City Council’s submission talks about “insufficient financial detail”, and it says that the

“Scottish Government should consider the impact of additional capital and revenue costs required to implement, manage and maintain the required changes at a time of considerable budgetary pressure for”

local authorities. Can you enlighten us on what those additional capital and revenue costs would be?

Back in 1980, Clare Grogan said in the film “Gregory’s Girl” that boys think in numbers. I am one of those people. Can you put some numbers on what has been said, given that the financial memorandum is all about the numbers?

The bill talks about something like £2.95 per household for education, behavioural change and so on. Do you recognise that figure?

It is all about best estimates, is it not?

Have your local authorities received funding? It is interesting that 17 out of the 32 local authorities have received a total of £53 million. Obviously, local authorities are different sizes and so on. Has your local authority received funding, or is that something that you are in discussion with Scottish ministers about? I see Kirsty McGuire shaking her head.

The Scottish Government seems determined to make this work. It says that the Scottish ministers will be enabled to impose statutory recycling targets on local authorities, with financial penalties if targets are not met. In Wales, a local authority can be levied with a fine of £200 per tonne of waste by which it falls short of the target amount. It is clear that there will be pressures on local authorities.

The financial memorandum talks in detail about savings from paper cups going to landfill and this, that and the other. You have all said that any additional costs should be met fully by the Scottish Government, but what is the net outcome from the bill for each of your local authorities?

Mr Devine, you were quite hesitant about talking about pounds, shillings and pence at the beginning of this question session, but where are we in terms of the parameters for a city such as Dundee to deliver what is in the financial memorandum? Would that cost the city an extra £500,000, £1 million or £2 million? Obviously, we have to look at that. The whole point of financial memorandums is to give best estimates so that we can look at the impact on the public purse. Where is Dundee on that? I will ask your colleagues the same question.

Okay. Thank you very much.

That concludes the public part of the committee’s work today. We will move into private session to consider our work programme. We will have a wee break until 5 to 11 to enable our witnesses and the official report to leave.

Mr Devine touched on that point about chasing people, too.

Scottish Financial Enterprise and Professor Bell have provided evidence to the committee. Professor Bell said:

“if Scotland does end up with higher tax rates than other parts of the UK, that will be seized upon by those other parts of the UK whenever potential inward investment opportunities arise in an attempt to ensure that they do not come to Scotland”.

He went on to say:

“the impression that is given, not just the tax rates themselves, matters quite a lot, too.”— [Official Report, Finance and Public Administration Committee, 19 September 2023, c 7.]

What is your view on that?

You touched on universities; I will ask about them next. In its evidence, Universities Scotland said that we still punch well above our weight in Scotland. For example, about 13.25 per cent of research and development spend is in Scotland and, of course, we have only about 8.2 per cent of the UK’s population. However, that spend has declined from about 15.4 per cent in recent years. Universities are of the view that, if we want to continue to outperform the rest of the UK and, indeed, encourage new business start-ups, which will lead to more people being in work in highly skilled jobs and paying more of the taxes that we require to fund our public services, we need to invest more in research and development start-ups and innovation.

As the convener of the cross-party group on life sciences, I am aware of the example of a significant company that moved from Dundee to Cambridge because there had not been enough investment in lab space. I am also aware that Heriot-Watt University is looking for similar investment in order to advance its artificial intelligence research. Again, that is because it is threatened with competition from Cambridge. It is doing well against Cambridge and other parts of the UK, but it wants us to continue to have that advantage. We win some and we lose some: we have actually attracted businesses from Cambridge, so it is not a one-way street.

How are we going to ensure that public sector investment continues and that investment is not just left to the private sector? Universities have said that their research—I am sure that the Scottish Government has access to that—shows that every £1 that is spent in research and development creates a further £8 of investment in the sector. What are we going to do to continue to leverage that and increase it? All the economists who speak to us say that, if we broaden the tax base, we will have more people with higher salaries who pay more tax, and that will fund the public services that we all want to see.