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If you have the same workforce and you are injecting cash, you get an inflationary boost, but when the capital starts to tail off, as it will over the next five years, you can do less with it.

One would have thought that steady growth would be better, to allow capacity to increase. However, it is about the impact of this on real people, in real communities. When we talk about capital spending we have to consider that a huge chunk of it is for routine maintenance—people forget that and they think that capital is just spent on building things—which means that there is less money for new projects, which then have to be delayed. Is that right?

One of the issues that will cause difficulties is the reconciliation with regard to income tax. There will be £406 million applied to next year’s budget, which is a nice wee bonus for the Scottish Government. However, there will then be a subsequent negative reconciliation of £851 million, which exceeds the reserves. What impact will that have on the Scottish budget?

The numbers are quite stark: the number of people on adult disability payment will rise to more than 700,000 in the next five years. Are people in Scotland really becoming that much more unhealthy?

In your update, you talked extensively about forecasting, including issues such as forecasting error. For example, we can consider unemployment and employment, on which the Scottish Fiscal Commission has proved itself to be more accurate than the OBR. You said that that is because your measure is based on real-time information and data, and we know that there are issues with the labour force survey. You said that you are developing a joint approach with the University of Strathclyde to create a new regional model for short-term forecasting. Can you talk more about that?

Under the second part of our public agenda item, we will take evidence from the Scottish Government on “The Scottish Government’s Fiscal Sustainability Delivery Plan 2025” and “Scotland’s Fiscal Outlook: The Scottish Government’s Medium-Term Financial Strategy 2025”. I welcome to the meeting Shona Robison, the Cabinet Secretary for Finance and Local Government. She is joined by Scottish Government officials Jennie Barugh, who is the director of exchequer strategy; Richard McCallum, who is the director of public spending; and Lorraine King, who is the deputy director of tax strategy, engagement and performance. I intend to allow up to two hours for this session. Before opening up the discussion, I invite Ms Robison to make a short opening statement.

Good morning, and welcome to the 23rd meeting in 2025 of the Finance and Public Administration Committee. Our first item is an evidence session with the Scottish Fiscal Commission on its June and August 2025 publications.

I welcome to the meeting Professor Graeme Roy, chair; Francis Breedon, commissioner; Professor David Ulph, commissioner; and Claire Murdoch, head of fiscal sustainability and public funding. I have to say that entire swathes of the Amazon had to be devastated to produce these documents for old lags like me, who have to rely on paper. I will probably drown in it from time to time.

You have an opening statement, so please fire away, Professor Roy.

There are certainly ways to control it, but the issue is more about whether those are politically palatable or indeed desirable. What are the implications likely to be for non-protected areas of the Scottish budget—that is, excluding health and social care?

One of the areas of concern to the committee has been what seems to be the exponential growth of the welfare budget, the majority of which—£151 million—concerns issues relating to the pension age winter heating payment. However, compared to your December 2023 forecast, the provisional outturns are £142 million—or about 2 per cent—less than predicted.

I note that most of the forecasts are correct to within 2 per cent or 3 per cent here or there. However, one area in which there is a significant difference is the child disability payment. The forecast was £450 million but it has come in at £514 million, which is a 14 per cent differential. The other area is the Scottish welfare fund, which has come in at £53 million as opposed to a forecast of £36 million, which is a 49 per cent differential. You explained the reasons for that in paragraphs 4.26 and 4.18 of the forecast evaluation report, but, just for the record, will you talk us through that?

I fully intended to thank David and Francis for their contributions over so many years. It is quite a sad moment for us, but at least you will have the joy of the cuckoo clocks that Professor Roy will present to you when you get back to the office. I wish you well in your continued endeavours in the future months and years, and we look forward to seeing the new commissioners in due course. Thank you very much for all your contributions over the years, including this morning.

I thank all our witnesses, including Claire Murdoch. We will now take a break until 5 past 11.