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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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Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

I think that we can make progress. That goes hand in hand with other work that we are doing on community wealth building, for example. On the economic opportunities that sit outside the traditional model of the past few years—the Companies House registered business—there are alternatives. We want to continue working with Co-operative Development Scotland and the enterprise agencies to support such opportunities.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

To be honest, we will probably not do that—unless the member or others can provide me with substantial evidence of a disconnect between the overall cost and the voucher scheme. The voucher scheme is supplemented by UK Government vouchers, which increases the overall pot that is available. The value of the voucher is determined by whether a business is in scope for R100 or not. If you are referring to those that are in scope, I point out that it is much harder to justify an increase because they will ultimately get broadband. However, I appreciate that they want it earlier; that is absolutely understandable. I have bigger concerns about businesses that are not in scope and are not having the overall costs covered.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

On timetables, my intention is to publish that strategy following the UK spring statement, at least four weeks prior to the summer recess. If we are unable to meet that deadline for reasons that are outwith my control, the normal process is to consult the Finance and Public Administration Committee. We will make sure that the committee is sighted on that. That is my intended timetable for May.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

It is challenging to put a specific figure on the overall cost of phase 2 now. There is a moveable feast when it comes to what we could do on each recommendation. My officials might be able to flesh that out. One of the recommendations is about investing in a marketing campaign. I would like that to be as impactful as possible, but we do not have a specific figure. Generally, we are talking about £25 million of resource and £24 million of capital—those are the figures that we are using at the moment, but I caveat that by saying that we will identify funding for the recommendations as they require to be implemented in the light of particular pressures.

Another example that I can give relates to the skills agenda, which Fiona Hyslop will know well. There is probably an unlimited requirement for investment in reskilling and upskilling in tourism. Although there will be funding identified for that, it needs to reflect the situation at the time.

09:45  

On the issue of confidence, I take the point that, if funding for a specific requirement does not appear in the budget, that raises questions. That is why it is important that there continues to be engagement with STERG so that it is conscious of our commitment to continue to progress our commitments and knows that we are willing to work with it as and when its recommendations are required as part of the recovery. That process starts right now. In fact, it started over the Christmas period, even though the tourism industry has been focused on the immediate challenges.

There is still financial support available in the budget for tourism more generally. It is not a case of our not investing in tourism. We are talking specifically about the STERG proposals.

I will stop there. I think that there was a second part to your question, which I am afraid I cannot recall.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

I have two points to make about that. The first is that Registers of Scotland received significant Covid consequential funding this year. As part of the more than £639 million of Covid consequential funding, Registers of Scotland got—if I remember correctly—£14 million. If I am incorrect about that, I will get back to you.

Secondly, Registers of Scotland got substantial financial support because, of course, it raises income. I have been assured that it can still deliver its services within the budget that has been allocated.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

We could always move faster, particularly on fair work. I am very conscious of not just the moral imperatives, but the economic imperatives. To have a healthy, thriving economy with an ample supply of skills requires fair work to be embedded in everything that we do. If somebody who is in work is still in poverty, we have a problem, because we are therefore not tackling child poverty, or meeting our objectives on it, and skills interventions are not quite meeting the mark. We could always move faster.

On the fair work side, we are making significant progress on conditionality and ensuring that it is embedded in everything that we do. Public sector grants are an example, with the requirement to pay at least the real living wage. As you will know, we have real limits when it comes to employability law, so we are using things such as conditionality instead.

However, there is another side to this. You said that it is not enough for people to just get into the labour market. The other side is how we help people to get into the labour market, and there is a particular budget point here. I need to say this carefully, but it is very budget intensive to help to prepare people for the labour market who have not participated in it for years, or in some cases decades. As you will know, there is significant investment in our no one left behind scheme for the long-term unemployed, but ÂŁ20 million probably helps with 2,000 fair work opportunities, and there are more than 2,000 people who need those opportunities. That scheme is financially intensive, for good reasons.

There is a question for all of us about how we prioritise substantial sums of money to try to tackle economic inactivity while recognising that we cannot just leave people once they have participated in a scheme for a year.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

The overall responsibility falls within my budget, but the primary ministers who are responsible are Jamie Hepburn, who is responsible for skills, and Richard Lochhead, who is looking at fair work elements. They work together quite closely.

On budget lines, that is a really good point. I could go through the list, mentioning the national transition training fund, the no one left behind scheme and so on, and tell you about all the different things that the public sector is doing and where I am spending money, but you are asking where employers are spending money—

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

It is really important to understand that, within the budget that we receive, we do not get, for example, a ring-fenced fund for national insurance contributions from the UK Government. We get our overall budget, which has been well scrutinised. The Scottish Fiscal Commission has talked about it being 5.2 per cent down, in real terms, on this year’s budget. We get an overall pot and we allocate the funding within that pot. We have done that—we have identified funding for local authorities and for other parts of the public sector. There has not been specific ring-fenced funding for any part of the public sector.

People cite to me that the national health service is getting additional money for national insurance contributions in Scotland, but that is not true. I provide the health budget. When it comes to responsibility for how that funding is divvied up, it is entirely up to the relevant cabinet secretary, the chief executive and so on to identify how they do that. They have identified funding within that overall pot for national insurance contributions. Any other part of the public sector could do that. Some of the public bodies that we have discussed, such as HIE and VisitScotland, face the same challenge. They, too, will need to manage national insurance contributions, which is essentially an inflationary impact.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

I am suggesting that I cannot tell you how much money has or has not been given for national insurance contributions within the overall budget that we receive from the UK Government, as that does not have a specific line that identifies national insurance contributions. I can only tell you what the overall pot is. I cannot tell you where there has been movement. This is a technical tangent, but that is because this is a spending review year. In normal years, we would get all the identified lines showing where there were rises and falls in budgets. This year, because it is a spending review budget, we just get the overall pot; things are not divvied up.

As part of that, I have sought to protect the local government budget in cash terms—the core budget. Obviously, that is significantly supplemented by funding for social care and education, to name just two areas of pressure that local government has cited.

Economy and Fair Work Committee

Budget Scrutiny 2022-23

Meeting date: 19 January 2022

Kate Forbes

That is a hugely important question. There are two parts to that question of measurement: what the agencies do now and what I would like them to do. What they do now is develop performance management frameworks, which are published with the annual business plans and approved by ministers. We monitor the delivery through the agencies’ boards and through regular discussions with me and Ivan McKee. The agencies formally report on progress in the annual report and accounts. That is the sum of their internal and external reporting on performance.

After the economic strategy is published, I would like us to be crystal clear. I will not pre-announce the national strategy, but there are five aims and objectives in it, all of which relate to areas where the Scottish economy has big opportunities or needs to deal with some of the structural challenges. I have already referenced productivity. There is also a big opportunity in some of the new markets—there are new growth and economic opportunities, particularly in energy transition. There are also areas where we have skills challenges, and we need to ensure that we have a skilled population for the jobs that are available. We also have to deal with some of the structural inequalities.

That is a quick overview. The enterprise agencies and other public bodies that have an interest in Scottish economic growth should all be held responsible, as I will be held responsible, for delivering against those objectives. The national strategy will also include a real hard look at the delivery mechanisms. Basically, there will be a ruthless focus on delivering a step change against those five objectives. I have told you how the agencies publish and monitor progress at present.

Ultimately, to go back to what Colin Smyth said—I agree with him in part—the enterprise agencies need to deliver, as I need to deliver and as other public bodies need to deliver when it comes to economic activity and economic prosperity. That is where the accountability should be.