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I am concerned about the levelling up approach for two reasons. The first is the complete lack of clarity. It is doubly concerning that you, as a member of the committee, are not sure how the approach works and that I, who am responsible for appropriate funding of infrastructure and local government services, do not have much, if any, clarity on how it will operate. That is concerning, because we have to make decisions and we are trying to use our money as prudently as possible to make it go as far as possible.

The problem in my engagement with local authorities is that that process feels like a complete lottery: local authorities are bidding for funding but do not know whether they will secure it. They have to make decisions for the benefit of their communities, and it feels quite unfair that getting that money should feel like a lottery. The lack of clarity is concerning.

Just to give absolute clarity, we have had no input into the fund and we have no evidence of how it will meet the needs of Scotland’s people and places.

My second concern is that I have had no clarity that there will not be an impact on the Scottish budget. My concern about the increased use of the United Kingdom Internal Market Act 2020 and the increased unionisation of spend—if I can use that phrase, by which I mean the UK Government leapfrogging the Scottish Government or normal processes—is that the money has to come from somewhere. That money will be taken from the Scottish Government’s budget and used elsewhere. We saw that in last year’s budget when, on the one hand, the chancellor talked about an increased capital spend while, on the other hand, the Scottish Government’s capital was reduced by 5 per cent. That might sound like small fry, but that is money that goes on schools, hospitals and public infrastructure.

Those are my two concerns. On the one hand, there is no clarity for local government or for the Scottish Government and, on the other hand, the money might not actually be additional funding; it might just be money that is redistributed by alternative means.

Thank you for that question; I will be happy to follow it up with a bit more detail. This is an area of focus in the economic strategy. You will know about our vacant and derelict land fund, which was announced as part of this year’s budget to incentivise the use of brownfield sites and derelict land for economic development and regeneration.

I had the privilege of visiting a good example of that last week when I went to Ravenscraig, where substantial investment is being made by the private and public sectors to regenerate an area that is emblematic of a challenging time. That is the kind of thing that we want to do.

My question is about how we incentivise the use of such brownfield sites for the purposes of economic regeneration and development. I am always looking at things such as how we can use our tax system for that, although our scope there is limited, because we really only have a property tax in the shape of non-domestic rates. We are also looking at the funding that might be available to unlock the potential of such sites.

If I can provide more information that is specific to Meghan Gallacher’s local circumstances, I would be happy to do that. If she thinks that we are missing things that would enable the use of those brownfield sites, I would be interested to hear more, particularly in advance of setting this year’s budget.

That is a very important question, which I think we will return to over the next few months, particularly in relation to the budget.

Every year, when it comes to budget negotiations and budget engagement with COSLA, the care service forms a key part of my interactions with it, as you will appreciate. I do not imagine that that will change. I imagine that, this year, COSLA will talk about the financial support that it needs to deliver that service as part of the budget process.

There is a much bigger process of consultation and engagement. We have had the Feeley report. That is not the end of the matter. There is still a process for considering the optimum way of delivering care for the users—for our elderly residents and those who need additional support.

I go back to an earlier answer that I gave—I cannot remember who asked the question. We can focus on either process or outcomes. We have to focus on outcomes for the person who requires care support, but we have to bring everybody with us to do that. My engagement with COSLA on the financial settlement will therefore continue. I am committed to continuing to engage with it on the financial settlement. A big process of work is going on in the national health service, too, led by Kevin Stewart, and the committee will need to have an input to that as well. It will need to be sighted on that work, and it will need to give a view on it.

I take on board the concerns that Miles Briggs has flagged up. I heard them from Alison Evison at the time. I think that all of us recognise that, after Covid, we need to improve the service that we provide holistically to the people who rely on it. My sincere hope is that we will focus on the outcome of improvement in care rather than on process, but there are a lot of moving parts, and we all have a role and a duty to consider how we can take everybody with us.

The service has to be local. We have got to have a local service. Localism needs to be one of the central building blocks of a national care service.

We would not have been able to get through the pandemic without local government and its employees. As the person who has overseen the financial support packages over the past 18 months, I cannot pay great enough tribute to local government staff and employees, many of whom sacrificed weekends, evenings and holidays, week after week, to get money out to families and businesses that were in need. Their names might never be mentioned in the committee or in Parliament, but they have been absolutely instrumental, and many of them have been doing their jobs from home in quite trying circumstances. Local government has been the means of distributing support directly to people in need; we could not have done it without it.

With regard to the financial requirements of local government, in every budget I deal with the funding that is given to me and cut it in a way that tries to protect every part of our funding needs. Local government has been largely protected, despite the fact that we have been dealing with very difficult financial circumstances over the past 10 years. I do not shy away from saying that the financial circumstances have been difficult, or that they are probably going to get harder in the light of the fact that the outlook for the Government’s own financial settlement is quite challenging.

Over the past year, we have, obviously, had substantial additional Covid consequentials. They are now largely spent. My impression is, as we look ahead towards the United Kingdom Government’s budget and spending review, that it will be tightening up quite considerably in order to deal with the implications of the increase in borrowing.

The Scottish Government’s financial funding package in the upcoming budget is therefore going to be very challenging. Our responsibility will be to try not only to protect the health budget and local government, but to remobilise our health service and justice service. The needs, therefore, considerably outstrip the funding supply, if that makes sense.

I thank Meghan Gallacher, and offer her a warm welcome. As I said at the beginning of the meeting, it is great to have the wealth of experience that arises from the backgrounds of members, and I look forward to your bringing that council experience to the chamber.

I would like ring fencing to decrease further; it has substantially decreased over the past 14 years in particular. During Covid, there were specific pots of money for businesses, households and education recovery, for example, because the nature of the pandemic unfortunately required us to distribute money in that fashion. Opposition members in the chamber were certainly holding me accountable for ensuring that those pots of money went towards the purposes for which they were intended.

However, with the local government settlement, I made it clear that the bulk of the funding that we distributed was not ring fenced. With regard to additional Covid consequentials, the last thing that I did before Parliament went into recess was increase local government funding by more than £250 million, which was specifically not ring fenced in order to allow local authorities to tailor it to meet the greatest needs in their local areas.

I agree with the premise of the question, and confirm that my goal is to try to provide maximum flexibility for local government.

There will, presumably, still be areas where Opposition parties and the Government agree that there should be additional funding—for example, for education—but that funding will be the minority. The majority of funding is not ring fenced, so local government can use its discretion in how it is spent.

At the risk of sounding like a broken record, I also welcome Elena Whitham, who is another councillor with a wealth of experience. This is going to be a great committee.

The member’s point on the fiscal framework relates back to Meghan Gallacher’s question, because if we have a rules-based fiscal framework to support future funding settlements, we can maximise flexibility for local government, and by doing that we can facilitate local government to use its discretion and tailor its financial support and its agenda to its local communities.

We had started that work prior to the pandemic, and we had committed to undertaking that joint work with COSLA. Unfortunately, the work was delayed during the pandemic, but we have recommenced those discussions to determine the scope of the work that is required.

I can tell you what a successful fiscal framework would not be: it cannot be something that is imposed by the Scottish Government on local government. For me, therefore, it is important that local government can bring forward for consideration its own proposals for such a framework. That could involve, for example, a two-stage process in which, first of all, we looked at some tangible asks such as—this brings me back to Meghan Gallacher’s question—the approach to ring-fenced funding and how we consolidate local government funding as part of the settlement.

In the second phase of the process, we could look at the local governance review and questions such as what wider fiscal powers for local government could be considered. Indeed, in the most recent co-operation agreement, we confirmed our interest in a citizens assembly to consider that very question. That is just one suggestion, but, returning to my earlier point, I think that success in this respect will be local government making its own proposals about what will work instead of the Scottish Government starting off by saying, “We think that this rigid and inflexible framework should be applied.”

We started to see a little bit of that during the pandemic. When I took to the Treasury a series of asks from local government and COSLA on the subject of flexibility, it agreed not to all but to some of them, and we were then able to implement and provide those flexibilities to local government.

Are you asking specifically about planning?

I absolutely take on board the point about valuing local government staff, and I am sure that all of us have been engaging with some of those employees day in, day out in case work. I could not have done what I have done over the past 18 months in relation to financial support without local government staff. They have been truly heroic.

However, there is a fundamental difference when it comes to pay. We are the direct employer in relation to the NHS, so it makes sense for us to have direct involvement there. Historically and currently, local government pay is negotiated between the trade unions and COSLA through the Scottish joint council. We are not a member of the Scottish joint council and we have never taken part in those negotiations, and I have been crystal clear that I do not intend to change that. We are not the direct employer; the local authorities—COSLA—are the employers.

I meet COSLA regularly to discuss all manner of financial issues. The First Minister has also met it. On each occasion, I have been explicitly clear that the budget is fully deployed and there is no additional funding. I am not sitting on central pots of funding. Right now, our biggest risk to the budget is the fact that, without the guarantee that we had last year, our budget can go up or down. It can be increased, but it can also decrease. Our budget is fully deployed and no additional financial support is available. It is for COSLA to negotiate the pay deal for local government staff, who I agree have been heroic during the pandemic.

Thank you very much, convener, for inviting me to give evidence to the newly formed Local Government, Housing and Planning Committee. I warmly welcome each and every member of the committee. It is good to see the wealth of experience that members bring with them.

I apologise for not being with the committee in person, and am really sorry to miss what would have been my first in-person appearance since Covid struck. I was due to leave the Highlands last night to travel to Edinburgh but, unfortunately, within about half an hour of heading off to depart, I got notice from a close family member that they had tested positive, so I am now obliged to self-isolate. I am sorry for not being with the committee in person.

I welcome the opportunity to discuss the range of issues that fall within the committee’s remit. That range of issues is quite impressive, from local government, planning and community wealth building to recovery from Covid, for example. I look forward to hearing the committee’s views.

I acknowledge the pivotal role that the committee will play during these critical times, and I look forward to building a constructive relationship with it, as we continue our work to control the virus, protect the most vulnerable people, and ensure that we can recover as quickly and efficiently as possible.

As we look ahead over this parliamentary session, we need to combine efforts to deliver a bold and ambitious recovery and to ensure that we tackle the level of poverty in our society, engineer a shift to higher-value and fair-work employment, and deliver greater financial security for families.

I am sure that the committee shares my vision of creating an economy that delivers for families and citizens, and of a society that thrives across economic, social and environmental dimensions. The Government cannot—I certainly cannot—deliver that vision alone, so I hope that we will be able to work across the committee as we try to support the public, private and third sectors and deliver that vision of the best possible recovery.

I look forward to answering a range of diverse questions from members.

Yes and no. With the levelling up fund, local authorities are bidding for money with no clarity on whether they will receive it. One of the core principles of COSLA’s distribution methodology is fairness. In other words, when it comes to methodologies, whenever we announce packages of spend, COSLA’s constant and understandable response to me is that the money should be equally distributed across local government, as per the methodology.

The levelling up fund completely moves away from that. One local authority could, for reasons that are unknown to me right now, get substantial capital funding through the fund to invest locally, whereas other local authorities could be left behind. Where does the fairness that is inherent in COSLA’s distribution methodology come in? Does that mean that the Scottish Government should give more to local authorities that have not received money through the levelling up fund? Is that fair? Alternatively, should everybody get an equal amount and should it just be up to the UK Government to decide who is and is not a worthy beneficiary of the additional funding?

That approach completely undermines the concept of fair distribution of funding.