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The Scottish Government has always made the case that Scotland-domiciled students are extremely important in university education, which I would agree with. One of the reasons for that concerns the likelihood that they will stay in Scotland to work beyond graduation; that is exceptionally important, as we desperately need well-qualified graduates to stay in Scotland. Will the policies that you are enacting just now undermine our ability to keep many of our best-qualified graduates in Scotland?

Has that made the Scottish Government think about reforming the funding process in higher education?

Cabinet secretary, you said in your budget speech on 19 December—and you have reiterated—that this is a budget for growth. When it comes to growth in terms of improving skills and addressing economic activity, which your predecessor, John Swinney, said at one time was one of the biggest challenges, why have you made substantial cuts to every area of the budget that would help to improve skills and increase economic activity?

You have cut the Scottish Funding Council budget, the employability budget, the enterprise budget and the SNIB budget, and you have increased tax on those whose high-level skills we desperately need in Scotland. That led Sandy Begbie to say,

“It is likely to inhibit the ability of our sector to create jobs and retain and attract the talent that we need”,

and there have been similar comments from Tracy Black of the Confederation of British Industry, Sara Thiam from Prosper, David Ovens from Archangel Investors, Alexandra Docherty from Johnston Carmichael, and David Lonsdale. They are all saying the same thing—that the budget will not do anything to improve the situation with skills.

David Bell told us last week that the budget

“is not really a great budget as far as opportunity is concerned.”—[Official Report, Finance and Public Administration Committee, 9 January 2024; c 8.]

He is right, is he not?

So there will be a reduction in the number of places for Scotland-domiciled students in the first year.

Cabinet secretary, the response from the business community is damning; in fact, it is excoriating in some of its comments. The particular focus is the concern about skills and trying to address the economic inactivity issue. I cannot understand why, if that is the Government’s major priority, you would seek to put pressure on colleges, which do so much work to try to ensure that students have the right skills. They are also involved in retraining, which is just as important for employment and for the economy.

You are cutting things such as employability and enterprise, which are surely critical to the success of the economy. Neil Gray has been very up front in saying that there is a new deal between the Scottish Government and business and that there will be “no surprises” when it comes to that new deal. However, that is not the view of the business community, is it?

Those questions are already being asked by nursing unions, local government and many people on the front line, but no doubt we will come to that as we move to stage 1 of the National Care Service (Scotland) Bill.

I go back to seek some clarity about the education situation. Again, the education budget is crucial in improving skills and addressing economic inactivity. Mr Marra quoted from your budget, which says:

“additional savings are to be made in the HE sector, including from reducing first year university places”.

He asked you how many places would be removed, and he offered the view, using the Government’s own statistics—I think that I am correct in saying—that the figure might be 3,700. Can you clarify that that number is likely to be the result of the decision from the Government and the Scottish Funding Council?

There will be a reduction.

What do you expect to happen with regard to universities offering places to foreign students? Will that number increase?

I was not asking about that. I was just asking whether you are going to review the whole process of higher education funding, because I think that the budget has clarified some of the difficulties that we will be facing in the future.

I will finish on another point of clarification. We have had various discussions about how the Government models behavioural change when it comes to tax, which is an issue that is bothering many people in the business community. We have discussed statistics that have come from the Fraser of Allander Institute and the Scottish Parliament information centre. The convener gave you some statistics earlier. For example, the economists are saying that, for those with incomes over £125,000, the behavioural change might involve as little as £8 million. For those with incomes between £75,000 and £125,000, the behavioural change might be about £74 million. Are those the numbers that the Scottish Government’s analysis arrived at?

It is a very helpful answer, and I think that it ties in largely with the feelings of a lot of members of this committee.

It is obvious that the SPCB has a limited role, as you rightly say, to enact the will of Parliament, and it is not for you to make decisions about what should happen. However, when we have taken evidence from civil servants and Scottish Government officials, there seems to be a lack of clarity about who should make the decision over how many commissioners we have and in what respect they would be held accountable to the SPCB. There is a bit of a lack of clarity, but that is not the SPCB’s fault.

There are two things that we should pick up as we look at the issue. First, we have to ensure that whatever structure we come out with enhances the scrutiny of this Parliament, but secondly, we must be very clear about the decision-making process on how many commissioners we have. I seek your agreement that those are the two main issues that the SPCB will consider, as you obviously have to put another budget in train this time next year.

Do you think that it is the unanimous view of the SPCB that we need more clarity on the whole issue and, therefore, greater accountability?