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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 12 August 2025
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Displaying 1169 contributions

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Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

There can be a number of reasons but, clearly, inflationary pressures and supply chain challenges have resulted in project delivery slipping.

I should probably add that, with regard to the capital reduction of £92 million in the NZET portfolio, we have provided project development support to undertake feasibility studies and business cases to secure investment in future years and we are beginning to support a number of multiyear projects. In addition, we recently established a heat network support unit to work directly with pre-capital projects to support development ahead of capital investment, which will provide greater certainty for spend in future years. We need to consider the economic context in which we are operating, but we are taking action in year to help to address that.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

As you will appreciate, we will set out our position for the next financial year at the budget, and it will be determined by a number of factors. Our commitment on net zero is absolute. That should be clear. What we have to do with the ABR is to make sure, first, that we arrive at a balanced budget position by the end of the financial year, as we are required to do, and secondly that we seek to free up resource to provide support in year. That has been part of the EBR exercise.

As the Deputy First Minister said in the September statement, some of those savings are captured in the ABR. There are £191 million of pressures identified that may follow through in the SBR. Savings that were identified in the EBR statement and publication earlier this month will, where appropriate and required, come through in the SBR. With regard to the next financial year and beyond, we will seek to be consistent with the priorities as set out in the resource spending review. We will, of course, take specific decisions at the budget.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

As part of the process of setting the budget for next year, we will consider what the demand has been for demand-led schemes in previous years. Demand-led schemes are always one of the challenges that we have in the budget, particularly as we get towards the year end. It can be a challenge if there is less demand than was forecast, because there is an effect on the end-of-year position if underspends emerge. It can also be a challenge if demand exceeds what was forecast. We reflect on that as part of the budget-setting process and we consider what the effective level should be for the following year.

With regard to what is identified in the document, I note that the capital savings have allowed the provision of £120 million of capital to local government to support pay deals. That is for this year and next year, and it will then be wound in as revenue.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

I want to be absolutely clear: net zero is a key priority of the Government; it is a moral imperative. We are taking forward a range of actions in the broader programme for government. Clearly, in the specific case that you allude to—NZET—being able to decarbonise how we heat our buildings will be a key aspect. As I set out, we have initiated work to help support the pipeline of projects to help address the underdemand that there has been for those funds. It is important to recognise that within the broader context of work that is under way. For example, a few weeks ago—wearing another hat—I published our revised national planning framework, which has been warmly welcomed by the Scottish renewable sector as a remarkable step forward. It is important to recognise the particular fiscal and economic circumstances that we are in, but that does not detract from the imperative and priority of meeting our net zero obligations.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

The allocation of the Scottish budget, earlier this year, demonstrates that commitment, but the issue here has been demand. The issue has not been the willingness of the Government to supply the resource; it has been the demand that has led to us being in a position to reallocate that funding to support the in-year position. However, I recognise the point that you make, and that is why we are taking the action that we are taking to address the shortfall in demand. That is why the work that I outlined to support project development is taking place.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

It is with regard to what is identified in the ABR and what is identified as an unfunded pressure.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

We are not depending on the fiscal framework review to fix this year’s budget, but I am not going to suggest in any way that this is not an issue that needs to be addressed, which will be done through the fiscal framework.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

That is from our internal monitoring of budget pressures. Are you talking about the “Pressure reductions” column?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

There are a number of things that have led to the previously unfunded pressures that we have discussed already. I will ask Niall Caldwell to say a bit more.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 22 November 2022

Tom Arthur

The point is that revenue can be used to pay for capital, with revenue reserves meeting capital expenditure. That then frees up the revenue reserve, which can then be used.