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Yes, it is a choice that we have made. The other difficulty with social security, of course, is that it is demand led. Therefore, the forecasts will inevitably change, because no forecast is 100 per cent aligned with outturn. For that reason, we must ensure that we have the capacity to meet that demand from within our own budget, irrespective of where the demand falls. Therefore, it creates risk and volatility, but it is a choice of this Government, and I think that it is the right choice. With regard to the Scottish child payment, it is not unreasonable to suggest that, if you meet your child poverty targets—the Scottish child payment is one of the levers for doing that—you will see that figure fall.

Absolutely. First, you asked about local government. The question is similar to the question that you asked me about education. I think that that will be a recurring theme in the various questions that are asked this morning. I am not in any way denying the extremely challenging outlook that we face right now with the funding that is available to us, and the job that we have had in trying to be as fair as possible across the public sector.

To go off on a brief tangent, we set out three objectives in our budget: tackling child poverty, transitioning to net zero, and economic recovery. We have intentionally added resilient public services to that list because, if we were to base all our decisions on those first three objectives, core public services would find things very challenging. We have therefore tried to protect those core public services.

I am not in any way saying that the outlook is not extremely difficult. There are no two ways about it. That is why public sector reform—including, for example, the estates—is so important. If we can become as efficient as possible, that will allow us to focus our funding on front-line services and, ultimately, to focus on achieving those objectives.

I have two quick points to make on local government. First, in the most challenging circumstances, we have protected the revenue budget in cash terms, with £100 million in the final year, and we have also protected the baseline of £120 million from this year. That means that local government will receive about £42.6 billion over the resource spending review period.

Secondly, because it is level 2, those figures do not include the funding that is normally allocated to local government from other parts of portfolios, such as the transfers from education and social care. You will therefore see a significant uplift in future budgets, because the resource spending review does not provide the granular detail on the funding that is made available through those transfers.

There is also a point about flexibility, which has to go hand in hand with the fiscal framework. Now that we are through the local government elections, that work is being dusted off again. It has not stopped, but it obviously had to be briefly suspended during the local government elections. The fiscal framework has to look at maximising the flexibility and empowerment of local authorities.

On the estates programme, l note more briefly that it is not about focusing all the Scottish Government workforce in, for example, Edinburgh; it is about the fact that we now have hybrid working across Scotland and therefore it does not make financial sense for me to continue to renew leases—it is largely about leases rather than necessarily outright ownership—when buildings are only half or a quarter occupied. It is about how to ensure that we maximise the use of that estate. If we can save money on estates, for example, I can maximise more money for social security to feed hungry kids or to help front-line workers.

Gary Gillespie might want to comment.

On that point in particular, obviously, funding for employability is going up. It is therefore a choice. I am sure that we will come back to this, but employability and skills are probably the two areas that people most frequently raise with me in relation to the pressures right now—particularly with unemployment at 3.2 per cent—and the need to invest. In the finance and economy portfolio, we therefore see an intentional choice of investing more in employability and skills—and the skills line does go up. We cannot mirror that significant increase across the board because, by nature, a budget cannot prioritise everything.

Enterprise and skills link back to the national strategy for economic transformation and the constant refrain from the economy committee and others about decluttering the landscape. We need to be as efficient as possible. That does not compromise our objectives, but we need to ensure that we are reducing duplication across the various public bodies that operate in the enterprise and skills space. To my mind, we have struck the right balance in the finance and economy portfolio, because it reflects the constant refrain that I hear about the need to invest in skills and to ensure that we are as efficient as possible in supporting businesses.

You asked where the workforce will come from and mentioned the need to invest in training and skills. That is why I have prioritised the budget in the way that I have. That means that the focus will nearly always be on the areas that do not see the more generous uplift; the focus is very seldom on the areas that are seeing an uplift in challenging areas.

On climate change, it is important to say at the outset that, from a capital perspective, we cannot reach net zero without leveraging in private funding; there is no question or dispute about that. The Scottish National Investment Bank has a role to play in leveraging in private investment. We need private investment. We can allocate public funding out of our available capital—bear in mind that that is approximately £5 billion per year, and we have approximately £450 million in borrowing capacity each year—but it will take more than public funding for us to reach net zero, and we should not hide that. I hope that that answers your questions about skills and funding.

There are three reasons why the outlook right now is challenging across the board. First, our budget from last year has been cut by 5.2 per cent, and it is forecast to grow by 2 per cent in real terms, if social security devolution is excluded. The challenge for every part of the public sector is captured in the fact that less money is available. On top of that, inflation is at 9 per cent and is forecast to go to 11 per cent. That reduces our spending power. On top of that, if there is an increase in one budget line, there must be an equal and opposite decrease in another budget line.

My job has been to treat as fairly as possible all parts of the public sector, including universities, because I know how important they are. Again, that demonstrates the point that we have been discussing: I cannot spend a penny more than what I will receive or raise according to the SFC’s forecasts.

The fundamental challenge with some of the discussion is that, if we are more effective at serving the citizens, by extension, we will have more efficient public bodies. What is not to appreciate about improving outcomes for citizens and businesses and ensuring that every penny of resource that we spend delivers our objectives?

I think that the greatest contributor to child poverty over the past 10 years has been UK Government austerity, and that view has been backed up most recently by a report from the University of Glasgow. We will do all we can to mitigate it, but we are limited in what we can do. We will continue to invest our money through a different approach to social security, but, ultimately, much of what we spend is on mitigation. If you fix that issue at source, we could probably redeploy the funding elsewhere.

That is a statement of fact, yes.

No, that is a very reasonable assumption to make. My question to you would be: if I had given significant increases on the four lines that you are asking about, would you have been here asking me about four other lines that had been severely cut?

It is unlikely that we will see that in the NHS. I have intentionally set out a flexible approach because we know that some parts of the public sector have grown and probably will need to grow further. For example, the national care service will need to be able to employ people and expand in some areas flexibly.

Other parts of the public sector will no longer need to maintain the Covid-related expansion of the workforce. Rather than taking a UK Government approach to this, which is to put arbitrary figures on it—I think that its figure for bringing staff numbers down to 2016 levels is 91,000 full-time equivalent—we have said that we will freeze the pay bill. That does not equate to a freeze in pay levels; we want to work with employers and trade unions during the next few months in advance of the budget to understand how we can manage workforce numbers in a flexible way that will allow some parts of the public sector, such as the health service, to continue to grow where it needs to grow, and other areas to decrease their staff figures when they do not need those post-Brexit, post-pandemic levels of staffing.