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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 15 August 2025
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Displaying 930 contributions

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Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

I actually think that prioritising employability and training in the finance and economy portfolio is the right call. However, if spending in one area goes up, the same increase cannot be maintained across the board.

What we require is a flexible training offer. Universities and colleges have an important role to play in that respect, and they have to adapt and be cognisant of future skills demand. With employability training, which, as I have said, is one of the very few budget lines that is going up significantly, we are endeavouring to provide a more flexible retaining and reskilling offer to individuals who need to retrain and reskill.

That said, I go back to my starting position: the outlook is very difficult, given the funding that we have available. I imagine that around this room and across the chamber there will be different asks in terms of where I should be spending more. Indeed, I have already heard some of them today with regard to local government, universities and employability.

If I could spend significantly more on every budget line, I would鈥攐f course, every finance secretary would want to do that鈥攂ut I cannot as I am constrained by a funding envelope, and I have sought to be fair across the board. It is even more challenging because our spending powers have decreased as a result of inflation, which you cannot get away from. What you are counting as real terms cuts is higher because I have less spending power as a result of inflation. We have tried to protect spend, but if you want any line to go up, I am afraid that on the resource spending review鈥攚hich is different from a budget鈥擨 do not really have anywhere to go.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

Gary Gillespie might want to come in on earnings more generally, but I will go back to my fundamental point: I cannot overspend by a penny; I can only spend what the SFC thinks it is reasonable for me to receive. Therefore, if you want any part of that resource spending review to increase, that has to come from elsewhere in the pot, because my spending and funding assumptions must be based on as much fact as possible鈥攚hich they are.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

Much of that goes back to the core objectives that I set out, such as tackling child poverty. Much of the spend for that is in the social security line, as members will see, but there is also much of it in the education line, which covers, for example, the roll-out of free school meals and early learning and childcare expansion.

We have tried to ensure that the trajectory of spend in each portfolio matches the plans for the roll-out or expansion of particular initiatives. Someone else might want to come in on the breakdown by year, but that has been our starting position. We have tried to match the funding to the commitments that have been made which are specifically tied in with core objectives.

There is another element to that. The trajectory is quite bumpy over the next few years because of the impact of reconciliations that need to be accommodated. For example, there are larger reconciliations in certain years than there are in others, and that eats into spending power, because there is a limit on borrowing of only 拢300 million to manage some of those reconciliations. You have to use your core spending power to make up the difference, as it were.

We have also tried to smooth the trajectories so that, for example, we do not have a portfolio that has to deal with a rapid and sudden drop in one year, only to have a climb up in the following year, because that involves employees, or workers. You cannot expect a portfolio such as education to see a drop. Therefore, we have tried to smooth the trajectory over the period across portfolios.

I hope that that answers the macro question as well as the particular question. I do not know whether anyone else wants to add anything.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

I feel equally passionate about it, and I appreciate that much is challenging and difficult about the resource spending review, but I do not think that it is unreasonable to set out a programme for improving our outcomes; doing so goes hand in hand with efficiency.

In the examples that you identified, I do not know how many people or teams had to manage that application or what the cost of that additional time and inefficiency was. If we are serious about achieving our objectives, we have to make sure that the processes are there and efficient and that we have the right people and teams to deliver them.

The resource spending review does two things: first, it sets out the challenges of the financial position, which I cannot change, because I can spend only what the SFC forecasts; and, secondly, it sets out the fact that, if we want to improve our ability to meet our objectives, we will have to take a long, hard look at how we achieve that. I have used the example of the enterprise and skills space. I am sure that we all have businesses in our constituencies that go to five, six or seven different public bodies, because five, six or seven public bodies provide grants. That is inefficient. We want to make it easier for businesses to access the help that they need in a one-stop shop.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

I have used the SFC鈥檚 forecasts, which are based largely on the UK Government鈥檚 spending review and on tax and social security forecasts.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

They all have an important role to play, but they need to ensure that they are as efficient as possible and focused on the core objectives that we have set. My impression, based on my extensive conversations with the enterprise agencies and VisitScotland, is that they are all on board with that and get it.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

I would say so鈥攜es. Certainly it is embedded in the resource spending review. The medium-term financial strategy focuses a lot more on the funding that we have available, and the resource spending review focuses a lot on how we are going to spend it. That is the distinction between the two documents.

I go back to identifying the four objectives. Tackling child poverty is completely in line with the national performance framework. Transitioning to net zero is completely in line with the national performance framework. Economic recovery and resilient public services are also completely in line with it. I would say that this resource spending review is far more focused on outcomes than perhaps many things are.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

Let me just say that we are spending 拢1.8 billion on the Scottish child payment, which will go up to 拢25 per week. That will just about mitigate the cut to universal credit of 拢20 per week.

Finance and Public Administration Committee

Economic and Fiscal Forecasts, Resource Spending Review and Medium-term Financial Strategy

Meeting date: 7 June 2022

Kate Forbes

There is a more balanced answer to that, and hopefully a more balanced question behind it than I was asked in the chamber. I accepted in the national strategy for economic transformation that increasing productivity is one of the most important objectives that we can have as a Government, a society and an economy. We take it as read that increasing productivity matters, and we need to up our game on that.

You still have to accept that between 2007 and 2019 we saw significant growth in productivity; indeed, productivity in Scotland grew by 10.7 per cent compared with 5.2 per cent in the rest of the UK. Why is that important? It is important, because it brings us back to the question of what we need to stop doing, because it might be dragging down productivity, and what we need to keep doing, because it might be boosting it. That is what the national strategy tries to get underneath.

Our economy is recovering right now, and we have the unique circumstance of a record low unemployment rate of 3.2 per cent. We cannot do much more with regard to the labour force if unemployment is at 3.2 per cent, with the exception of trying, as I said earlier, to work with those who are classified as economically inactive and get them into the labour market. There is work that we can do on migration, too.

I did not catch everything that the SFC witnesses said, but they made it quite clear that Scotland is exposed to an ageing demographic and, as far as earnings are concerned, to the situation with the oil and gas industry. While there has been a significant increase in financial services down south鈥攖he figure is about 16 per cent, if I remember correctly, but I would need to double check that鈥攖he oil and gas industry in Scotland has had a challenging time, which has had an impact on earnings. You have to distinguish between wages and productivity a little bit; they are linked, but I think that these are two different questions to which there are two different answers.

Economy and Fair Work Committee

National Strategy for Economic Transformation

Meeting date: 16 March 2022

Kate Forbes

Interestingly, I posed a similar question to various advisory council members and to a lot of the people with whom we consulted. I asked what needs to be done to deliver a step change. By and large, the feedback was that we know what to do鈥擨 am sure that the committee and the Government are mostly aligned on what needs to be done for the Scottish economy鈥攂ut we need to improve our ability to get it done and to be focused, determined and ruthless in our execution of the strategy during the next 10 years.

When we look at international examples of models that involve Government-led national strategies, we see that what often separates the successful ones from the unsuccessful ones is that, in the successful ones, there is consensus across political parties, Parliament and Government about what needs to be done. That means that, irrespective of the challenges that emerge, those Governments are able to deliver, because whoever forms the Administration knows what needs to be done.

One thing that makes the strategy stand out considerably is the ruthless focus on delivery. Of course, that will never grab a headline. There is a lot in this document that will grab headlines, particularly around entrepreneurship, but that focus on the execution of what we know we need to do and on streamlining our ability to do it is key.

There is one smaller area that is equally important, and that is the new opportunities that have emerged. When the previous strategy was published, in 2015, we knew that Scotland had great strengths when it came to our natural assets around energy, but in the past few weeks we have seen the announcement of the world鈥檚 largest floating offshore wind technology. That is remarkable, but it will be effective only if we can develop the supply chain and establish the businesses that accompany that. Those massive, momentous opportunities that are recognised the world over are new, and the strategy sets out in detail how we can make the most of those opportunities and, basically, build businesses and deliver jobs over the next 10 years.