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I guess that with any budget process there will be external and internal volatility, but one of the corollaries of what you are saying is that you would find it useful if the UK Government were more transparent and predictable in the way that it followed through on its spending. If so, is the same true of the Scottish Government? I am thinking in particular of Audit Scotland’s recent comments about transparency, and I was interested to see that in its recent report on these matters it said:

“budget revisions are managed across Government, which means it is not always possible to establish the detail of reprioritisations within directorates.”

To my mind, that sounds a little bit like the situation that you have highlighted with regard to the UK Government.

Is tracking budget changes in directorates an issue? Is there an opportunity to improve the systems that you have in place? Audit Scotland made the supposition that the data is there but you cannot report on it. I am thinking of your relationship with the UK Government and your own practice. Is there scope along those lines to improve transparency and disciplines in budget reporting?

I will just follow that up before I ask my final question. I am speculating about whether more robust, regular and detailed reporting through the year on budgets and spend from the UK and Scottish Governments might help matters. I totally accept that much of Government activity is demand led and that you cannot guarantee absolutely that you will spend a certain amount, but robust reporting and tracking help to manage the situation. That is true in the private sector—a business is dictated by whether customers spend money on its services. I would suggest that that is much less predictable than anything that the Government does. The question is whether such an approach would be an avenue for both Governments to improve things. That explains where I am coming from.

In recent weeks at committee, questions have been raised about outcome-led budgeting and where we are 10 years on from the Christie commission. Given that the medium-term financial strategy is under development prior to its publication, does that provide an opportunity to recast what the Scottish Government intends to do in the medium term on outcomes and objectives? Much of the written and oral evidence that we have received has noted that, unless objectives are baked into how the Government budgets and organises itself, such documents provide only commentary rather than drive change towards the objectives. Will you take such an approach? Can more be done in the MTFS and beyond that to bake objectives into how the Government budgets and organises itself?

That might be why I was asking questions about medium-term spending plans. I will gently conclude there.

I would like to see the analysis, but I do not dispute the fundamental point. Any forecast will have a margin of error, and when our revenue is based on forecasting, it stands to reason that the borrowing limit should be in line with that margin of error. What I am interested in is the hard analysis of the quantum of that, and how far away the Scottish Government believes the borrowing limits are. You can take it as read that I understand that having a hard nominal limit does not make sense. The question is what the order of magnitude should be.

I will move on to an associated point that is, in a sense, almost more important. You said that you have faced an issue over the past year in understanding, once announcements have been made—forgive the shorthand—when you can bank them. I recognise that this is an exceptional year, but exceptions sometimes come along.

I have two questions. First, how indicative is that of a general issue with funding coming through the block grant, and the predictability of that? Secondly, what is the actual substance of that issue? Is it simply that the Scottish Government takes a cautious approach and wants the ink to dry on the bit of paper before it starts to action the funding, or is it that you do not know that you are definitely going to get the cash from the Treasury until it hits your bank account? I guess that there is a range of possibilities between those two points.

Again, if you have specific examples of where that has caused a problem and the amount of money has been lower than you anticipated, it would be useful to have those on the record.

That is helpful. I would love to go down the rabbit hole of how the Scottish Government manages its cost centres, but I will save that for another day.

I would like to explore what greater transparency looks like. Comparable-sized organisations would typically report on a quarterly basis, and they would typically be reporting how both their revenue and their costs have tracked against what they had put in an annual statement previously. In America, the Securities and Exchange Commission requires three such quarterly updates, alongside an annual report. That used to be the case in this country until 2014.

Would it be reasonable to ask the Government to provide regular pre-scheduled quarterly updates on the budget? Critically—I am guessing that this is what you were implying in some of your previous comments—that is how budgets are revised, while tracking spend against budgets. Sometimes in this place we have a habit of focusing almost entirely on the budget and a lot less on how the money is being spent against the budget.

Is that quarterly concept something that could be applied to the Government?

Thank you for that, and also for saying that I have made a reasonable suggestion—I think that that might be a first in this place.

I think that the committee is broadly in the same place as you regarding the importance of the national performance framework, although there is a need to ensure that it is properly embedded. One of the thoughts that were explored with the Deputy First Minister last week is whether the framework should be reported on formally, perhaps at the same time as the budget but certainly regularly.

In a sense, I understand the points that you are making about the need for such things to be reported across the Government, but we rarely hear cabinet secretaries reporting on how their bit of the national performance framework is progressing. Do you think that regular reporting on it by portfolio might help to give the national performance framework due weight and prioritisation and to change behaviours regarding how it is used?

I want to ask about transparency, but before I do that I have another question, which I guess is also about transparency.

I hold my hands up and admit that I have been struggling to keep up with precisely what has come through in terms of the Covid money—what has and has not been allocated.

Exhibit 4 in your report is extremely useful, but I want to clarify what it is saying. In the current year, £4.9 billion has been allocated by the UK Government to the Scottish Government, but it is my understanding that everything that has come through in consequentials since March is yet to be allocated by the Scottish Government. Is that a correct summary? I would appreciate your view of what has been allocated and what has not of the overall £4.9 billion.

That is very helpful. I recognise your point that, when amounts are allocated, they might be labelled, but that does not necessarily mean that you know precisely where the cheques are going. I see both witnesses nodding at that.

I will move on to why there is a transparency issue. The bullet points under paragraph 41 rang alarm bells for me. The paragraph says:

“The existing processes for monitoring the budget were not designed to separate out specific spending in areas across portfolios”.

On reallocations, the report says:

“it is not always possible to establish the detail of reprioritisations within directorates.”

Will you explain what you are saying? On my reading, one of two things is happening—either the Scottish Government has the information but is not sharing it or reporting on it, which would be troubling, or it is not effectively tracking the information at the sub-directorate level, which is not just worrying but downright dangerous. I expect an organisation with a budget of about £40 billion to track its spend by organisational units that are well below directorates. Which explanation applies? Are you comfortable that the Scottish Government as an organisation is tracking its spend at an effective level?

Thank you for that answer, which I do not disagree with. I must emphasise that, ultimately, the national performance framework is useful. I guess that I am wondering whether it could be made more useful. On the points that you just raised, is there not an alternative approach? It is not necessarily purely about setting targets, but emphasis could be applied to certain measures. With balanced scorecards in particular, that is explicitly what you do—you attach weightings to particular measures. Could that approach be taken to strengthen the strategic value of the measurements that are included within the framework?

My reflection on what you have just said is that it is about making explicit how you use the data, which I think might be helpful. We all recognise that the measures are important, but I wonder whether there is a need to report against them more explicitly. I cannot recall the last time a minister made a statement explicitly about the national performance framework—not so much about it as a tool but about its outcomes and what it was saying in their portfolio. Do you think there is a need to have more explicit reporting by ministers against the measures in the national performance framework?