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I do not want to risk in any way being perceived as seeking to speak on behalf of the Treasury, but I will ask Scott Mackay whether he can offer some reflections from the experience of officials.

Just before Scott Mackay comes in, I will make the point that we are four weeks or so before the start of the next financial year and we have a UK fiscal event tomorrow. Everything that we know in the Government and, indeed, I think around this table is based on speculation that we will have read in the newspapers. In terms of the overall process, you can understand the challenges. That is just reflective of some of the broader challenges that can emerge in terms of what the UK Government will do. Sorry, you can come back in, Scott.

We almost have to target a level of underspend so that we do not go over, but if we did not land in that space and went beyond 1 per cent—it is slightly more than 1 per cent, given what the reserve represents as a carry-forward—that would be resource or capital that we have lost. It is a challenge and I think and hope that, collectively as a Parliament, we are getting a bit more accustomed to that reality and that, when underspends are reported as part of a provisional return, it is just part of a routine operation of the fiscal framework rather than some suggestion that there has been resource that could and should have been allocated that was not.

Thank you, convener. The Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2024 specifies a standard rate and lower rate for Scottish landfill tax that would apply from 1 April. The rates are consistent with the rates that are set out in the Scottish budget for 2024-25, which was published on 19 December 2023. The order sets out that the standard rate will increase from £102.10 per tonne to £103.70 per tonne, and a lower rate for less polluting inert materials will increase from £3.25 per tonne to £3.30 per tonne. Committee members will wish to note that the rates match landfill tax rates in the rest of the UK for the financial year 2024-25 as confirmed in the UK and Welsh budgets.

The Scottish Government is continuing to act to avoid any potential for waste tourism to emerge as a result of material differences between the tax rates north and south of the border. The increased rates provide appropriate financial incentives to support delivery of our ambitious waste and circular economy targets.

Indeed, the revenue has declined as was forecast, and it will continue to decline as per the policy intent and objectives. As I said in my opening statement, the rationale for the rate being consistent with that of the UK and Wales is to avoid the risk of waste tourism from emerging. That rationale underpins the approach that we have taken with the tax.

Robert, do you have any information that you are able to share on that point?

I think that, in the guide that we have provided to the committee, we refer to the additional flexibility around the reserve being welcome. I appreciate that we are right now operating in a challenging environment for public finances, but we highlight that that greater flexibility will be of considerable value in future years. For example, over the medium to longer term there will be an increase in our scope to borrow. Of course, we have to borrow sustainably in respect of capital, but the flexibility will increase our scope to borrow, over time.

You touched on it yourself when you mentioned capital spend; it is always about where we are with existing commitments and what requirements have to be met, and I know that that has been of some interest with regard to the capital allocations in the 2024-25 budget. As far as the net zero portfolio is concerned, either it has not been possible to deliver certain projects or changes to the profile of projects mean that they will fall in another financial year. There can be that kind of movement, given that the horizons over which capital projects are developed and actioned can go across multiple financial years. A number of different factors are reflected.

Moreover—and more broadly across the budget, including in resource—there can on occasion be demand-led schemes where the demand has not been what was anticipated or forecast. We have particularly sought to identify as early as possible where that sort of thing might emerge, so that we can reallocate the resource in an effective way. In certain areas—net zero, for example—it has not been possible to deploy the resource in-year, and as part of that in-year management, the capital has been reallocated.

Clearly, broader behaviour with regard to complying with environmental regulations goes beyond tax policy. Ministerial colleagues lead on those areas, and I would not want to speak about an area in which I do not have a direct policy lead.

The role that tax plays has been recognised. Important points have been raised. I want to have an opportunity to take those points away and come back to the committee to speak to how those factor into the considerations on rates.

As I have set out, the broad underpinning principle—the rationale—for the measure has been consistency with the rest of the UK. Correct me if I am wrong, but I think that the questions that the committee is asking are: has consideration been given to changing the rate to incentivise other behaviours, and how would that be balanced against any potential risk of waste tourism? Would that be a fair summation?

The question was about what the £235 million represents as a share of the overall capital allocation towards health.