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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 16 August 2025
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Displaying 930 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

I hope that it will be concluded very soon. On Thursday, I am due to have a conversation with my UK Government counterpart, the Chief Secretary to the Treasury, about the next part of the fiscal framework review. I do not have a date in mind; final details are being confirmed. We are clear about what we would like to see, and it is a case of negotiating a position.

My sincere hope is that the conversation on Thursday will be fruitful and constructive and will move us forward. A lot of work has gone on between officials on both sides, but it will come down to a finalised agreement between me and the UK Government. Nothing on our side is holding things up; it is just a case of getting a finalised agreement with the UK Government.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

Funnily enough, that does not really feature in the conversations that I have about the budget. Reducing spend does not really make the agenda in those conversations. Actually, there is one exception. I do not mean to call them out but, in previous years, the Greens were always very good at coming forward with proposals to increase spend while also identifying reductions in spend.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

To clarify, the £440 million is a one-off. It is certainly not in our baseline. As far as I know, the UK Government would classify it as Covid consequentials. It is certainly largely one-offs. I cannot think of anything in that £440 million that is baselined. The fact that that is a feature relates to an important premise of your question.

I would certainly like to baseline the £120 million. The reason for my being slightly more hesitant than I might have been in previous years is that we are about to embark on a resource spending review. I sincerely hope that, in that review, rather than talking about what has been baselined, we start from a position of considering local government’s need and what budget it needs.

I think that previous years’ conversations on what should and should not be baselined will become redundant. This time last year, I was asked repeatedly for baselining figures, and I said at the time that I would be happy to return to those conversations. I am sympathetic. I could say that the money will be baselined. However, the £440 million is not baselined, so we will need to identify funding this time next year to cover the costs that local government has identified.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

That is right. Again, for comparison, the overall health budget is £18 billion, the local government budget is £12.6 billion and the overall budget is around £40 billion.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

I thank the committee for its very comprehensive and helpful report, which I was pleased to respond to yesterday.

Today’s amendments have one broad purpose, which is to increase the local government budget next year by £120 million. As I confirmed to the Parliament during the stage 1 debate, due to the changing position last week on this year’s budget and funding from the United Kingdom Government, it is my intention to utilise the Scotland reserve to carry forward sufficient funding from this year to allow me to allocate a further £120 million to local government for next year.

As members may be aware, any plan to carry forward funding requires the Government to use the Scotland reserve, which will therefore be presented as an underspend on this year’s funding when the final outturn is published later this calendar year. I hope that we can all recall our conversation at today’s committee when it comes to scrutinising that position later this year.

The amendments to the Budget (Scotland) Bill deliver on the commitment to give local government an additional £120 million. There are three amendments required to achieve that change. I will not move the amendments right now. I am happy to take any questions.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

Yes, it will. Intentionally, it makes a point of rejecting a UK regional economic model in which London and the south-east essentially power the rest of the country, because that is completely unsustainable and is not, I think, defensible. The danger is that we adopt a similar approach in Scotland. I fundamentally reject that. We need to ensure that all regions of Scotland can participate in economic opportunities and contribute.

10:30  

Obviously, national figures could be boosted by focusing on a few areas, but that would be to the detriment of the rest of Scotland. If you believe in a wellbeing economy model—by which I mean a model in which growth or prosperity is a means to the end of lifting people out of poverty, reducing child poverty and achieving health and social outcomes—you need to take a fairer approach that looks at strengths in the Highlands, Ayrshire and the north-east and asks how we can back those fundamental strengths.

Aberdeen and the north-east have a very proud and rich energy history, and parts of the Highlands have a proud and rich history in acting as supply chains. Let us back those strengths. However, what else can we do in Ayrshire, for example? Where are the opportunities? We should be intentional about supporting communities there to maximise the benefits of the assets and resources that are on their doorsteps.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

I was interested in the evidence that the committee took on the report by the three Davids—I am sure that they are probably somewhat offended by being called that; I mean David Eiser, David Phillips and David Bell—and from experts on the Welsh fiscal framework. I noted the comments on two facts in that regard. First, Scotland is disproportionately impacted by fluctuations in the oil and gas sector, and always has been. That is largely because the north-east and the oil and gas sector have quite a number of well-paid jobs. As we know, higher and additional-rate payers account for a significant proportion of overall income tax revenues so, if jobs in a sector such as oil and gas are affected, there is a disproportionate impact in Scotland, which then feeds through to tax revenues.

Secondly, there is the comparison with the way in which the fiscal framework operates in Wales versus the way in which it operates in Scotland. We have two different forecasters, and we also have a situation in which the fiscal framework does not take into account the unique circumstances for the Scottish tax base.

We need to remember that, pre-pandemic, earnings in Scotland had been growing year on year since income tax was devolved. There is growth there; the question is about relative growth. As I said, there are two issues that impact on that. One is the exposure to particular industries, and the second is the fact that the fiscal framework does not take into account the faster growth in higher wages in London and the south-east, for example.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

The short answer is yes. I go further than that, as I actually cite the powers that local government in Scotland has when I make the case for increasing our powers. Local government is able to determine on the basis of affordability and local needs what to carry forward from reserves and what to borrow, and that decision is for councils, not the Scottish Government, to make.

11:15  

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

That probably illustrates why it is dangerous to look at the overall quantum without knowing what has gone on underneath. There are a lot of taxi drivers in Scotland. I do not know precisely why but, proportionately, there are substantially more here than there are in England and Wales, for example. The £28 million will probably deliver about £750 for each taxi driver. The figure for the funding that we allocated for taxi drivers last year is no longer at the top of my mind, but you will recall that they were unhappy with the quantum that they received—I think that it was in the region of £77 million. The reason for their getting substantially more is because there are so many of them.

Finance and Public Administration Committee

Budget Scrutiny 2022-23

Meeting date: 1 February 2022

Kate Forbes

There are no guarantees for anything until the supplementary estimates come, which I hope will be next week.