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I thank colleagues for their questions.

Agenda item 2 is formal consideration of the motion on the instrument. I invite the minister to move motion S6M-14800.

Motion moved,

That the Finance and Public Administration Committee recommends that the Budget (Scotland) Act 2024 Amendment Regulations 2024 [draft] be approved.—[Ivan McKee]

Motion agreed to.

Because time is against us, and you have another meeting to go to, I will not revisit capital or talk about public sector reform or digitalisation, all of which I had hoped to cover.

However, Jamie Halcro Johnston has provoked me to ask a final question on another issue: the mitigation of UK Westminster welfare cuts. For example, the Scottish Government is currently paying £133.7 million to mitigate welfare cuts, with the imposition of the bedroom tax being the most obvious example in that respect. However, it has decided that it will not continue down the road of funding the winter fuel payment, because that £160 million would have to be found from the national health service, local government, justice and other budgets. Has the Scottish Government taken a decision that it will no longer mitigate any reductions in Westminster spend, or will it continue to look at that on a case-by-case basis? Obviously, that £133.7 million that we are using to mitigate things is also £133.7 million that is not going into devolved areas of spend.

I am not saying that it should be about new things. I think that people are saying that they are concerned that the Scottish Government is paying lip service to the national performance framework, that it is not embedded in what the Government does and that it is not clear, for example, how Government spending or, indeed, priorities align with it.

The fact that the consultation was not all singing and all dancing, as many of the witnesses said that it should have been, and that it was fairly limited in scope made witnesses think that the Scottish Government is not serious about it—it is almost a tick-box exercise. That is a major criticism of where we are at this time.

There was an expression of disappointment among many people who are committed to the national performance framework that they feel that the Government is not as committed as perhaps some of our stakeholders are.

You talked about the importance of the national performance framework with regard to finance, but it is not seen as explicitly or transparently driving financial decisions by Government, nor is it seen as holding organisations to account for spending funding effectively.

I find it difficult to comprehend how, as a sub-state legislature, we could eradicate child poverty or poverty in general with the powers that we have, which are limited—let us be honest about it—and could be changed at a moment’s notice by the UK Government. How realistic are those ambitions in the national performance framework?

Hello. Earth calling Keith.

I thought that you were going to say that it was your final, final, final question. [Laughter.]

It is a question of priorities when resources are limited, to be perfectly honest with you.

You talked about looking at such things again. When the committee was in Estonia a couple of weeks ago, we heard that the Estonian Government is looking at zero-based budgeting. Is that something that the Scottish Government would be looking at, for example? Incidentally, Jimmy Carter famously implemented that in the United States, way back in the 1970s.

Thank you for that opening statement. We will probably have a wide-ranging discussion today. As you will know, we have taken a lot of evidence in recent weeks about what other people believe the approach should be as we move forward. Of course, to discuss that, we have to look at where we are at the moment and you have pointed out the challenges that we face.

Last week, we took evidence from the Convention of Scottish Local Authorities. One of its concerns is that the Scottish Government’s understandable approach to eradicating child poverty is perhaps a bit two-dimensional. For example, it focuses on benefits. COSLA has said that the Scottish Government having increased benefits by £984 million over what the UK would have provided in the current year has not necessarily helped all the people in poverty that it should. COSLA says:

“The opportunity cost of these decisions needs to be considered.”

It goes on to say that

“economic development and employability services which help to create jobs and support people facing barriers to the labour market … and sustain work in fairly paid jobs”

have taken a knock because less money is available for employability funding. It has also said that such funding would help with

“reducing dependence on the welfare system”

and with providing more

“affordable housing supporting people out of poverty, reducing homelessness and improving health and education outcomes.”

It has also suggested that putting that £984 million in local government, for example, could have provided 15,000 to 20,000 additional jobs.

On the same issue, Professor Heald said that it is not progressive to invest in benefits if doing so impacts on the services that go to the poorest people.

Yesterday, I went with Tom Arthur to a project in my constituency that looks at providing employability services for parents. Over the past seven years, It has provided some 300 part-time jobs of around 20 hours a week and has got people into the labour market who had never been in it before or who might have had to take years out, due to having had children. Such projects underpin the Government’s anti-poverty strategy, yet the project says that it is threatened by the fact that the Government says that it will just increase benefits, meaning that money will no longer be available to provide the services.

Even in schools, for example, educational psychologists and campus cops cannot be afforded by local government because the money is going to another area of spending. We realise that the budget is fairly limited and fixed, and that there is not great room for manoeuvre, but it is about choices.

That is a long-winded way of saying what I asked at the beginning, which is, what studies has the Government made of the opportunity cost of spending money on straightforward benefits, for example, rather than on supporting local government services?

I agree that multiyear funding would definitely make a significant improvement.

Local government also asks for flexibility. For example, the Government has a fairly rigid policy on teacher numbers, although one or two local authorities are railing against it. The local authority in my area has 12.7 pupils per teacher, compared with the Scottish average of 13.2, but the average is 18 in England. The issue is that outcomes have not really improved relative to the amount of money that has gone into that service. Having to maintain high levels of teacher numbers means that other services that support a child’s psychology, such as classroom assistants, are having to be reduced. I know that the teaching unions might not be too happy about this, because they are looking for even more teachers despite the falling pupil numbers, but would it not be better to give local authorities more flexibility in how they spend the resources that they have, which would produce better outcomes? That is what COSLA has said—you will know that, because you have spoken to it yourself.