³ÉÈË¿ìÊÖ

Thank you. That is—

Just to be clear, you are recommending that that should be done in the independent report about the—[Inaudible.]—and also in the independent review of the wider issue.

Thank you, convener. I am sorry about that—there was a slight blip in the broadcasting.

The third issue that I want to raise is exogenous shocks. Obviously, we have experienced one as a result of Covid. Your report is clear that, in such circumstances, there might have to be minimum funding guarantees. I think that everybody agrees that they have been a good thing, but you also say that they cannot continue on a long-term basis, because that would be inherently unfair. You set out that, in an exogenous shock situation, there is the potential to have enhanced borrowing powers. How exactly do you see that working for the period of an exogenous shock? Would there be a time period for the enhanced borrowing?

My first question is for David Phillips. I was very interested in—[Inaudible.]—all the different principles behind the Smith commission and that, because of that, choices might have to be made about priorities. Obviously, those are political decisions for the Scottish and UK Governments. Is it your view that it would be possible for the independent review to flag up the costs and benefits of choosing different priorities? I know that it will not be the job of the independent review to recommend policy, but should it be part of the review to look at the costs and benefits of the different priorities that could be chosen?

That is helpful. That is important for the overall principle behind exactly what we are trying to achieve—namely, the best outcome for Scotland and the United Kingdom.

There is probably growing consensus on the political spectrum that there is a case for examining the issue of forecast errors. People who have been in front of the committee fairly recently have had concerns about our ability to forecast well, the time delays between forecasts, and whether we get things right.

I am not worried about who answers these questions, but are there aspects that we need to address that are not just to do with the timing of different forecasts, particularly Scottish Fiscal Commission forecasts against Office for Budget Responsibility ones? Is there extra data that we should be working on to improve our forecast ability?

I am sure that other consequentials are coming, there will be immediate requests for that money from various groups in the economy, and I am sure that that will be well spent.

I turn my attention to another two sets of important statistics. One is from the Scottish Fiscal Commission, which projects a shortfall of £190 million in tax revenue take for 2022-23, possibly rising to £417 million by 2026-27. We saw yesterday the report that came out from the Confederation of British Industry and KPMG, which had the productivity index.

Putting those together, we see that the tax take in Scotland is not as strong as we would like. That refers back to some of the comments that you made in answer to the convener’s questions. Let us also be frank that economic growth in Scotland is also not nearly good enough, and the productivity indices that were produced yesterday show some really worrying signs. I want you to give us an idea of what you think must happen to address some of the serious structural issues in the Scottish economy that are the reasons why we are behind not just other parts of the UK but most other regions.

[Inaudible.]—one of which follows on from that last question regarding personal security. Can I get some clarity on the timescale to which the SPCB will want feedback from members of the Scottish Parliament after they have sought advice from local police, which they were requested to do? When do you expect to get a good idea from members of the home security that they might require?

You are quite right to say that you cannot overspend: that is absolutely a legal requirement for the Government. Notwithstanding what you said in answer to my first question, there are choices to be made. When it comes to certain underspends, which were large in the health budget—you have explained about future requirements when it comes to vaccines and so on, which I absolutely understand—there are issues around infrastructure, transport and so on.

In a period when urgent economic assistance is required, people are quite rightly asking what has driven the choices when you hold some money back for the next set of financial payments. What drives those choices that you have to make? That is what I am trying to ask you: what do you absolutely prioritise when it comes to the underspend money?

I asked the question because there are people around the country who might ask why there is an underspend on the Scottish budget during a pandemic when businesses face serious issues. I think you said last week that you had spent absolutely every penny that you had to hand, but another £100 million appeared for business. Do you understand public concern about that £580 million being there but not being spent at a time when people have really urgent concerns?

That will be very helpful, because there are members who want a bit more guidance. The SPCB has done a very good job on the issue, and it was a very sensible recommendation for us to contact local police and so on for home visits. Lots of members would like to be able to feed back on those contacts and ensure that the SPCB can help them with some of the costs, hopefully in the not too distance future.

All three panellists have highlighted considerable extra expenses that the Parliament is having to cope with, including staff costs, security costs and on-going inflation. There are also some savings, as I can see from the numbers. What processes are there for the SPCB to estimate the changes in savings that will come about because of our changed working practices? For example, members’ travel expenses over the period of Covid were less than what they had been before, because we worked at home, as did our staff. What processes are there for the SPCB to project whether the change to working practices will be permanent, and to project what savings will accrue from that if it does? How can that be worked out?