Deputy First Minister Responsibilities, Economy and Gaelic
Good afternoon. The first item of business is portfolio question time, and the first portfolio is Deputy First Minister responsibilities, economy and Gaelic. I remind members that, if they wish to ask a supplementary question, they should press their request-to-speak buttons during the relevant question. There is a lot of interest in asking supplementary questions for both this and the next portfolio, so I make the usual appeal for brevity in questions and responses.
Businesses (Opportunities for Scaling Up)
To ask the Scottish Government what steps it is taking to incentivise businesses to seek opportunities for scaling up. (S6O-04378)
The Scottish Government is incentivising businesses to scale up through targeted support, including our £15 million enterprise package and Scotland’s first dedicated series A fund with Par Equity and the Scottish National Investment Bank. Through the Techscaler grant, we have provided over £720,000 for feasibility studies and implementation projects. Beyond funding, our £42 million Techscaler programme offers specialised infrastructure, expert mentoring and international opportunities through initiatives such as our silicon valley and Singapore pop-ups, which connect Scottish founders with global investors and markets to accelerate their growth potential.
Facilitating new business activity is crucial to economic growth, and it is as much about enabling new business as it is about enabling existing businesses to expand and reach wider markets. A great deal of valuable expertise exists in our small and medium-sized enterprises, which we should be harnessing. Will the Government consider making a proper assessment of how it can smooth and ease small businesses’ transitions through those thresholds as they seek to grow?
Those are the types of considerations that we always have in mind, because we want to support small businesses in Scotland to expand and grow, and to ensure that venture capital and private equity are there to help them to expand. There has been a long-running debate in Scotland about how to ensure that that gap is closed.
Scottish Enterprise plays a big role. It has invested £921 million over the past 21 years, leveraging £2.45 billion of private sector investment to help companies to scale up. Those figures go up to the 2023-24 financial year. We also have other initiatives including the Scottish National Investment Bank, which helps businesses to scale up when their commercial cases are not attracting investment from elsewhere. The SNIB takes those decisions on an on-going basis.
A number of initiatives are under way, but we are always happy to consider new assessments.
Recent reports have indicated that Scotland is leading the United Kingdom in the growth of technology start-ups and that its success runs entirely contrary to the overall decline in the sector in the rest of the UK. Given the Scottish Government’s ambition to make Scotland one of the best places in the world to develop, launch and scale up a tech company, what assessment has the minister made of the success of Scotland’s leading Techscaler programme?
I thank Clare Haughey for highlighting some positive reports that have been published about Scotland’s performance in that area. The “Techscaler Annual Report 2024” shows remarkable progress. Techscaler has more than 1,400 members from nearly 1,000 start-ups, and member businesses have raised £118 million in capital since the programme began. Of their founders, 34.7 per cent identify as female, which is significantly higher than the industry average.
A comprehensive evaluation of the Techscaler programme’s delivery to date has been commissioned. It is currently under way and is due to be completed in the summer of this year. That will help us to build on those successes and further strengthen Scotland’s position as a leading start-up nation.
Petition PE1979 (National Whistleblowing Officer)
To ask the Scottish Government what its response is to the calls in public petition PE1979 for gaps in the Scottish child abuse inquiry to be addressed and for an independent whistleblowing officer for education and children’s services to be established. (S6O-04379)
We are fully committed to ensuring that Scotland’s child protection system is as robust as it can be. The Minister for Children, Young People and The Promise has provided several responses to the Citizen Participation and Public Petitions Committee about PE1979, which are available on the Scottish Parliament website, and she has also met the petitioners.
The minister’s response to the committee dated 26 February advised that officials are working to understand what improvements can be made. They include reviewing current whistleblowing processes and engaging with on-going reviews, including the Scottish child abuse inquiry and the review of the General Teaching Council for Scotland’s fitness to teach procedures.
The petitioners have rightly highlighted the huge power imbalance that exists between the lone victim or whistleblower who seeks to highlight serious child safeguarding failures and the public bodies. Those who make complaints often face huge obstacles, not least because of public bodies’ lack of openness and transparency and the fact that they often have unlimited legal and financial resources to defend themselves against allegations.
Does the Deputy First Minister not recognise that what the Scottish Government has proposed will not address that huge power imbalance but will simply enable public bodies and institutions to continue to mark their own homework? Does she not accept the argument of the victims who are arguing for an independent whistleblower to be set up to support people who bring forward complaints?
I thank the member for that point. I very much recognise that his primary concern is to ensure that child abuse is eradicated and that perpetrators are strongly held to account. I will pass his comments on to the Minister for Children, Young People and The Promise and will make sure that any proposals that we proceed with have the confidence of those who want to have a stronger system in place.
A number of members want to ask supplementaries. I will try to get them all in, but they will need to be brief, as will the responses.
Although the inquiry is still under way, work to improve the protection of children in Scotland should remain on-going. Can the cabinet secretary provide an update on the new national child sexual abuse and exploitation strategic group and its work to support survivors and prevent exploitation?
We are working closely with partners to deliver a co-ordinated multi-agency response to prevent child sexual abuse and exploitation in all its forms. In recognition of the need to go further, we have established a new strategic group to provide national leadership and further improve the shared response in Scotland to child sexual abuse and exploitation. The group last met in December, and it is due to meet again in the coming weeks. It brings together key stakeholders including representatives of social work, the police, health, education and local authorities, as well as expert practitioners, charities, researchers and academics.
I note the Deputy First Minister’s response, but the original question related to gaps in the Scottish child abuse inquiry, and her response brings me back to that. Allegations have been made about covering up patterns of behaviour among male teachers that relate to physical and sexual abuse; hiding behind the general data protection regulation; social workers withholding information from records and placing children at significant risk of physical, sexual and emotional abuse; and cover-ups of the mishandling of child protection in schools, to name but a few of the concerns.
What more is the Scottish Government doing to fill those gaps in the inquiry to ensure that our children are safe?
I will answer Roz McCall’s question in the same spirit in which I answered Colin Smyth’s, by recognising members’ interest in ensuring that the inquiry is as robust as possible.
It is important that the Scottish child abuse inquiry remains independent and that its chair, Lady Smith, has the ability to decide how the inquiry fulfils its terms of reference, which I believe are broad. We have been clear that we will carefully consider the inquiry’s findings and recommendations, and that we will move as speedily as possible to implement those recommendations.
We need to move on to question 3.
Economic Development (Direct Links with Markets)
To ask the Scottish Government how it is facilitating direct links with markets to promote economic development. (S6O-04380)
Our export strategy, “A Trading Nation—a plan for growing Scotland’s exports”, guides our efforts to strengthen international links and support our economic ambitions. For example, we have added 15 new trade specialists in key markets, doubled the GlobalScot network to 1,200 people in 60 markets and grown the trade and investment envoy network. In addition, through Scottish Development International, we provide exporting programmes including trade missions, trade shows, exhibitions and ministerial visits. Through the international trade partnership with Scottish Chambers of Commerce, we also fund trade missions for new exporters.
Direct and resilient transport links are key to effective international connectivity, and we are working continuously with partners to understand how best to service them.
The minister will be aware of efforts by DFDS to re-establish a direct ferry route for passengers and freight between Rosyth, in my constituency, and Dunkirk—the third-largest port in France, which is 20 minutes from France’s most significant fish market. The opportunities for Scotland’s exporters and for tourism are significant, but I understand that, to date, DFDS has come up against a bit of a brick wall from Scottish Government officials. Will the minister arrange to meet DFDS to see what, if anything, the Scottish Government can do to unlock the huge potential for Scotland of such a direct link with the key markets of the European continent?
I assure Annabelle Ewing that the Scottish Government has conducted extensive discussions with the promoters of the potential Rosyth-Dunkirk ferry service. The Cabinet Secretary for Transport has met them and has held discussions with United Kingdom Government counterparts, and the Deputy First Minister will be happy to pick up on those discussions with DFDS and Ms Ewing if required.
The Scottish Government would welcome any expansion to current facilities at Rosyth to enable a new service to be introduced, although that would primarily be a financial and commercial decision for Forth Ports and potential operators.
Air links are very important in promoting economic development. What is the Scottish Government’s current policy on the devolution of air passenger duty? Is it still working towards that? If so, and if air passenger duty becomes air departure tax, what is the Government’s policy on adjusting the current rates upwards or downwards?
Air links are very important for Scotland’s global connections and internally. We continue to have discussions on the issues that Murdo Fraser mentions. Speaking as the minister for tourism, I know that my transport colleagues have assistance available to establish new direct links from Scotland. That is important for business and tourism.
A96 Dualling
To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues regarding any economic impact of delaying the full dualling of the A96, in light of the Moray and Inverness Chambers of Commerce calling for the road to be dualled in full and raising concerns that delays to delivering this are “constraining economic growth” in the area. (S6O-04381)
The Scottish Government fully recognises the crucial role of transport infrastructure in supporting sustainable economic growth and access to essential services. Our position on the A96 has not changed. We remain in favour of full dualling, and we are progressing the dualling process from Inverness to Nairn, including the Nairn bypass. Feedback from the consultation on the draft outcomes of the A96 corridor review—including from Moray and Inverness Chambers of Commerce—will be key in helping to inform our final decision on how best to take forward improvements to the A96.
I am sorry that the Deputy First Minister did not answer that question, because it was framed in such a way as to elicit a response from almost the top of Government.
Does the minister agree with the two chambers of commerce, which say in their letter that
“the lack of progress on this vital project is causing increasing frustration and economic constraint”
and
“The lost decade of inactivity has stifled the potential for economic growth”?
Will he tell us how many people have responded to the most recent consultation on the A96 corridor review and when we will hear the Scottish Government’s response to that?
The total number of responses is just over 1,400. The matter is now under active consideration by Transport Scotland, and the cabinet secretary will update the Parliament at the conclusion of that process.
I reassure Douglas Ross and the Inverness and Moray Chambers of Commerce that I very much recognise the significant and crucial role of transport infrastructure links in ensuring economic development. All members, I think, are united in recognising that, and I am happy to continue to engage constructively with the chambers of commerce on those issues, as I have been engaging on transport infrastructure with chambers of commerce elsewhere in Scotland. I assure Douglas Ross and the chambers of commerce that the matter has the full attention of the Government.
There have been serial breaches of commitments to dual the A96 by 2030. The A96 connects Aberdeen, which is the European capital of renewable energy, with the Highlands, which is the powerhouse for renewable energy—the number 1 priority for the Government. Why should the Highlands be expected to deliver all of that, given that a goat track connects those two areas? Does the minister agree that it is simply impossible to defend the failure of the Scottish Government to implement policies that have been promised in every election since 2011?
I recognise the member’s tenacious campaigning on the matter for his constituents and the wider region. As I set out in my original answer to Mr Ross, I very much recognise the significant importance of that arterial route for the economic prosperity of not only the north-east and the Highlands but the whole of Scotland.
As the member will be well aware, we endured 14 years of austerity in an exceptionally turbulent period, which has impacted the delivery of a number of infrastructure projects. As I set out in my original answer, the Government’s position has not changed. We remain in favour of the full dualling of the A96, and we are progressing the dualling process from Inverness to Nairn, including the Nairn bypass.
Self-catering Accommodation Businesses
To ask the Scottish Government what discussions economy ministers have had with ministerial colleagues regarding what steps it is taking to improve regulatory clarity and reduce compliance costs for self-catering accommodation businesses. (S6O-04382)
Ministers engage across the Government on a range of issues where sectors may be impacted by regulation. In relation to the self-catering accommodation sector, that includes engagement on a range of regulatory issues that relate to the visitor economy to ensure that there is clarity and appropriate guidance on implementation and compliance, including, where necessary, on working in partnership with local authorities and public bodies where they have a role in applications and support for self-catering businesses.
We have also commissioned VisitScotland to chair an expert guidance group, bringing together expertise from across the industry and local authorities to provide recommendations on clarifying the short-term let guidance for operators and licensing authorities. VisitScotland will present its recommendations in March.
I thank the minister for that response, but we are at risk of losing the valuable and productive economic sector of self-catering accommodation businesses. These small local businesses are under attack, and they are being forced out of the sector by demands for planning applications from local authorities, most notably here, in the city of Edinburgh. Shockingly, that is despite judicial rulings that the permissions are not mandatory for self-catering operators that were in business before September 2022. The practices contradict judicial rulings and appear to be arbitrary, with inconsistency between local authorities. Lord Braid has rightly described them as “oppressive and disproportionate”. What immediate steps will the Scottish Government take to ensure that local authorities abide by the law and end the unjust imposition of planning requirements on self-catering operators that the courts have already ruled to be lawful?
As the member will appreciate, local authorities are autonomous bodies, and, like any public body, they have to uphold and comply with the law. With regard to the work that the Scottish Government has undertaken, as I said, we have commissioned VisitScotland to chair the expert guidance group, which is bringing together expertise from across the industry. We anticipate that VisitScotland will present its recommendations this month.
Edinburgh’s Economy
To ask the Scottish Government how it is supporting Edinburgh’s economy. (S6O-04383)
Growing the economies of our cities and regions is a priority for the Government, and we are investing significant time, effort and funding in the area.
In addition to the £300 million investment in the Edinburgh and south-east Scotland city region deal, which is supporting infrastructure and innovation to drive growth, and the range of benefits that are being delivered through the Forth green freeport, we have invested nearly £70 million in regeneration projects across Edinburgh, all of which are aimed at creating jobs and supporting individuals, businesses and communities.
As the cabinet secretary stated, much is being invested in Edinburgh, and the Edinburgh economy is thriving. That is driving significant population growth, which creates additional pressures on services and housing demand. The Convention of Scottish Local Authorities’ distribution formula determines the allocation that the City of Edinburgh Council gets for its budget, but how is the Scottish Government providing separate funding streams to meet Edinburgh’s growing needs? One example is the investment in Granton, in my constituency, which the First Minister announced today. What more can the Scottish Government do to support growth and to deal with the pressures that that puts on our population?
Ben Macpherson is absolutely right to draw a distinction between the standard general revenue grant that local authorities receive and the extra and additional funding that is invested in particular areas of Scotland. He mentioned Granton, and I believe that the First Minister visited Granton this very day to hear about the City of Edinburgh Council’s ambitious programme of investment for the area.
We have also been boosting the city’s budget with a further £16.8 million, which takes support for affordable housing to more than £51 million and a total of £160 million in the past three financial years. We are accepting bids to several funds to support the first phase of the Granton investment programme, including the housing infrastructure fund.
Edinburgh and South-east Scotland City Region Deal
To ask the Scottish Government what resources it has allocated to projects in the Edinburgh and south-east Scotland city region deal, including transport projects. (S6O-04384)
The Scottish Government has committed £300 million to the Edinburgh and south-east Scotland city region deal. The projects that will be supported were selected by deal partners and include £120 million for improvements at the Sheriffhall roundabout, £20 million for public transport improvements in west Edinburgh, £65 million for housing, £60 million for innovation and infrastructure to drive business growth, £10 million for the Dunard centre—which will create a world-class music venue in the heart of Edinburgh—and £25 million to develop the skills base that is needed by employers.
One of the key interventions to drive inclusive growth in the city region deal is improving connectivity. A train station at Winchburgh in West Lothian could unlock millions in decongestion benefits and strengthen the millions that have already been invested in the area by developers. Councils planned to apply for funding from the city region deal. Does the minister agree that that is exactly the type of project that should be funded?
I appreciate the member’s points, but he will appreciate that a proposed Winchburgh railway station is not something that is deal funded. As I set out in my original answer, funding through the deal is now fully committed, but I am happy to have further discussions and engagement with the member.
The Edinburgh and south-east Scotland deal includes the highly successful data-driven innovation programme. Edinburgh has long been a leading artificial intelligence and robotics zone in the United Kingdom. It was therefore highly disappointing when the UK Government announced Oxford as the UK’s first AI growth zone and reneged on the commitment to Edinburgh as the home of the UK’s first and the world’s third exascale supercomputer. Does the minister share my concerns that the Labour Government is bypassing long-standing economic investment opportunities in Scotland?
As noted by my colleague the Minister for Business, the Scottish Government is deeply concerned to learn that much-needed UK Government investment, which could site the exascale supercomputer at the University of Edinburgh, is now in doubt. I share the member’s concerns about that issue, given that the University of Edinburgh plays a central role in the UK’s data science and innovation sector.
The Minister for Business and I are collectively and actively engaging on that, and the Deputy First Minister has written to the Secretary of State for Science, Innovation and Technology to make the point that Scotland is well placed to play a leading role in hosting AI growth zones and vital AI infrastructure, and that the exascale should be looked at again as part of the spending review. We are currently awaiting a response.
Gaelic Support (North Lanarkshire Mòd)
To ask the Scottish Government how it plans to further support Gaelic at a local level, in light of the announcement of North Lanarkshire’s first ever local Mòd, which will take place this September. (S6O-04385)
Let me first offer my congratulations to North Lanarkshire Council and to An Comunn Gàidhealach for working together to establish a local Mòd in North Lanarkshire. It is excellent news, and it builds on and adds to the many Gaelic activities that are already available in that council area. It also provides opportunities for young people to use the language and strengthen their Gaelic skills, but, perhaps even more than that, it strengthens their musical skills and a range of cultural skills.
A range of measures are in place that support Gaelic at a local level. Local authorities support Gaelic medium education, the work of Gaelic bodies such as Fèisean nan Gàidheal, An Comunn Gàidhealach and Comann Nam Parant, and the work of Gaelic development officers. All that work will be strengthened by the provisions in the Scottish Languages Bill.
I, too, welcome the announcement of the Mòd, which will help to foster and develop the Gaelic language in my area, which traditionally would not have been considered a Gaelic-speaking heartland—that is, certainly, not in comparison with the cabinet secretary’s constituency.
From a strictly social perspective, promoting other languages helps us to preserve our heritage, engage with communities and improve our cultural awareness. How can the Scottish Government work with councils to ensure that Gaelic initiatives receive sustained support at the local level, especially in areas outwith the stronger Gaelic-speaking regions? How does it intend to build on events such as the North Lanarkshire Mòd to create a lasting legacy for Gaelic in the region?
As briefly as possible, Deputy First Minister.
The member is absolutely right to highlight those points. We support and work with councils to ensure that Gaelic initiatives receive sustained support. It is worth making the point that this is not only about Gaelic-speaking families, let us say. The Scottish traditional music scene would be poorer without local Mòds and without Fèisean nan Gàidheal. I commend both organisations and look forward to continued support for the efforts in North Lanarkshire.
That concludes portfolio questions on Deputy First Minister’s responsibilities, economy and Gaelic. There will be a brief pause before we move to the next portfolio to allow members on the front benches to change places.
Finance and Local Government
The next portfolio is finance and local government. I remind members that questions 2 and 4 have been grouped together. I will take any supplementary questions on those after the substantive questions have been answered.
Members who wish to ask a supplementary question should press their request-to-speak button during the relevant question. There is a lot of interest in asking supplementary questions, so brevity will be required in both questions and responses.
Scottish Visitor Levy (Stakeholder Engagement)
To ask the Scottish Government how it monitors the ways in which local authorities engage with stakeholders regarding the implementation of the Visitor Levy (Scotland) Act 2024. (S6O-04386)
Councils that introduce a visitor levy are required to establish a visitor levy forum. Membership is drawn from local businesses, and it provides views on the scheme. Scottish Government officials continue to liaise with VisitScotland in considering how best to build on the work of the expert working group, and the Scottish Government will conduct a full review of the operation of the 2024 act within three years of the introduction of the first scheme.
A month after asking the minister a different question on the issue, my inbox remains full of emails from worried constituents about the disaster that is the visitor levy. As more details have come out, businesses have said to local authorities, and to me, that the proposed spreadsheet to collect data is a massive overreach of power and hugely burdensome to businesses. With the pressures of falling into a VAT trap, businesses having extra costs to administer the scheme and other issues, will the Scottish Government work with authorities to review what data actually needs to be collected or, better, finally pause the roll-out of the scheme?
I commit to our continuing to work with local authorities, businesses and business organisations to ensure that we make the process as streamlined as possible and to understand how to make the scheme deliver on its intention while leveraging in as little administrative or other impact as possible on businesses.
Employer National Insurance Contributions (Aberdeen City Council)
To ask the Scottish Government how it is supporting Aberdeen City Council to manage the impact of the UK Government’s increase to employer national insurance contributions. (S6O-04387)
We have sought to protect all local authorities from the impact of the United Kingdom Government’s increase to employer national insurance contributions by providing record funding through the local government settlement. In 2025-26, Aberdeen City Council will receive £505.1 million to fund local services, which is an additional 8 per cent compared with the 2024-25 budget. A further £5.4 million will specifically contribute to meeting the increased costs of the UK Government’s changes to employer national insurance contributions, as was confirmed at stage 1 of the budget bill.
Scotland’s councils are being left to make difficult decisions about whether to increase council tax bills or cut back on services due to Labour’s reckless decision to increase employer national insurance contributions and not to cover the cost. I am aware that Aberdeen City Council is setting its budget today and that most, if not all, of the proposed increase in funding will be used to pay for its increased employer national insurance contributions. Does the cabinet secretary agree that the Labour UK Government must stop twiddling its thumbs and agree to fund that additional public sector cost in full? Will she join me in calling on all Scottish Labour MSPs, along with the Scottish National Party, to put pressure on their Westminster colleagues to reverse that ill-thought-through decision?
The Scottish Government will absolutely continue to press the UK Government to fully fund the increase in employer national insurance contributions. It is not just Scotland that is affected—all the devolved Administrations have a gap in funding between what is being provided from the Treasury through the Barnett formula and what the actual cost is. I would certainly welcome support from across the Parliament in that respect, as Jackie Dunbar has suggested. I do not believe that Scotland should be penalised for investing in public services, and the UK Government must therefore fully fund the actual cost of the increase for the public sector in Scotland. We will continue to press the Treasury on that issue.
Employer National Insurance Contributions (Local Authority Finances)
To ask the Scottish Government, in light of the United Kingdom Government increasing employer national insurance contributions, how it is supporting local authority finances. (S6O-04389)
The Scottish Government will continue to support local authority finances, and we will continue to make the case jointly with the Convention of Scottish Local Authorities and civic Scotland that His Majesty’s Treasury must fully fund the actual cost of the changes to employer national insurance contributions to Scotland’s public sector.
In the interim, we have provided more than £15 billion of funding through the local government settlement, as well as committing £144 million to contribute specifically to the increased cost of employer national insurance contributions.
South Lanarkshire Council has estimated that the United Kingdom Government’s changes to employer national insurance contributions will cost the council around £15 million a year. To close that funding gap, the council’s Labour administration unveiled a 6.5 per cent council tax increase, which is set to raise the local authority £9.5 million. Does the cabinet secretary agree that the Scottish Government’s record funding for South Lanarkshire Council would have allowed the local authority to properly invest in our communities but that, instead, that has been curtailed as a result of Labour’s national insurance tax rise?
I agree with Clare Haughey that the cost of the UK Government’s employer national insurance contributions shortfall in funding is an opportunity gap for Scotland’s public services. With our partners in COSLA, we have repeatedly raised concerns with the UK Treasury about the impact on public services if that reserved tax increase is not fully funded.
As I already confirmed to Jackie Dunbar, it is incumbent on all members of the Scottish Parliament to protect public services in Scotland by calling on the Chancellor of the Exchequer to fully fund the impact on public services, not just in Scotland but across the other devolved Administrations.
There are a couple of brief supplementary questions—they will need to be brief. I call Finlay Carson first.
No.
That is very brief. I call Alexander Stewart.
Labour’s increase in employer national insurance contributions is not only damaging to the private and public sector, but a shameful and direct violation of an explicit manifesto promise. The Scottish National Party Government has tried to tout its budget this year as some sort of salvation for councils—it is not. The high council tax increases to which councils are having to resort proves that.
Cabinet secretary, are you at least willing to recognise the reality that the financial position that Scotland’s councils have been put in for 2025-26 is extremely challenging?
I will not be recognising anything—speak through the chair, Mr Stewart.
I will say two things to Alexander Stewart. First, we have provided a record level of funding—£15 billion—for local government, as has been recognised by COSLA, which is a cross-party organisation. Secondly, we have given as much funding for employer national insurance contributions as we are able to, given the funding that we are likely to receive from the Treasury.
Finally, I note that, if we had listened to Alexander Stewart, we would have had £1 billion of unfunded tax cuts to the budget, which would have meant less, not more, money for local government. The Tories have no credibility on this issue.
“The IFS Scottish Budget Report—2025-26”
To ask the Scottish Government what its response is to the Institute for Fiscal Studies assessment in “The IFS Scottish Budget Report—2025-26” that “it is particularly important that the front-loaded increases in investment and public service spending planned are undertaken effectively”. (S6O-04388)
Following last week’s approval of the Scottish budget for 2025-26, the Government will continue to ensure delivery across our collective priorities, which include tackling child poverty, supporting public services and promoting economic growth.
Of course, this year, there has been an uplift of £610 million for the capital budget from the United Kingdom Labour Government. We have to ask whether the Government is capable or competent enough to spend it effectively. For starters, it has been hard for it to do any of that when the Government has not published a capital spending plan for nearly two years. That was promised in December 2023, March 2024, May 2024 and December 2024. Now, in March 2025, there is still no sign of it, with the Government seemingly kicking it into the long grass of autumn 2025. Will the minister tell us when and on what date the long-awaited and vital document will be published?
As I have indicated, the document will be published later in the autumn. Of course, it is important that we recognise that that will follow the UK Government’s spending review, which will be hugely important information.
Michael Marra quotes from the IFS’s report. Preceding that quote are the words “in this context”. What does the report say about that context? It talks about
“a planned slowdown in increases in UK government funding”
and notes:
“The outlook ... will become much clearer after the UK government’s multi-year Spending Review due on 11 June.”
It goes on to say:
“it seems highly likely that overall funding increases will be smaller for at least several years from 2026–27 onwards”.
We have a Labour MSP asking the Scottish Government how we will manage in an environment in which there is a planned slowdown in funding increases for the Scottish Government from the UK Labour Government. If Michael Marra wants to make a serious impact, he should put pressure on his colleagues at Westminster not to slow down increases in the Scottish Government’s funding from 2026-27 onwards.
A sudden jump in capital resource without an increase in capacity is likely to feed construction inflation. However, the Scottish Fiscal Commission has made it clear that, in real terms, our capital allocation will flatline and, by 2029-30, will be lower than it was in 2022-23. Does the minister agree that, to deliver long-term investment and sustainable growth in infrastructure and the economy, available capital must grow consistently in real terms each year? Will he continue to make that case to the UK Government?
I agree with Kenneth Gibson. That reinforces my earlier point that, after years of underinvestment by the UK Government, our capital funding must grow in real terms to deliver long-term investment and sustainable growth in infrastructure and the economy. My colleague, the Cabinet Secretary for Finance and Local Government, has called a number of times on the UK Government to increase investment in infrastructure. She will continue to make that case to ensure that we have the capital budget available to deliver our priorities for the people of Scotland.
The IFS’s Scottish budget report states that the Scottish Government should be “more transparent” about what it intends for
“year-on-year changes in spending by consistently comparing plans for the coming year with the latest plans for the current year.”
Even now, £350 million has been unallocated for this year, with no clarity about where it will be ultimately spent. I accept that the Government must keep money back for certain circumstances, but do the smoke and mirrors around the budget and portfolio allocation not raise suspicions that the Scottish National Party is moving money around to give a false and misleading headline-grabbing impression of where resources are going and how much is being spent? As we look forward to the medium-term fiscal strategy, will the Government commit to greater transparency on how it is using what is, after all, taxpayers’ money?
The transparency of information that we publish and share with the Finance and Public Administration Committee and the public continues to increase. There is no shortage of available information. Craig Hoy makes a point about moving money around. Of course we move money; we do so first to ensure that we balance our budget and, secondly, to ensure that we focus on our priorities as we move towards year end.
Craig Hoy answered the question himself. He recognised that the £350 million is there to address issues that will come up as we move towards year end, including year-end audit adjustments, changes in demand-driven budget lines, uncertainty around the final tax position and other uncertainties relating to the Scottish Government’s income. His question recognised that it is important that we have the funds to be able to address issues in a controlled and prudent way and to ensure that the Government continues to balance its budget.
Non-departmental Public Bodies (Cost to Taxpayers)
To ask the Scottish Government what its response is to the reported comment by the Scottish Information Commissioner that Scotland’s non-departmental public bodies, also known as quangos, are costing taxpayers £6.6 billion annually. (S6O-04390)
I do not recognise the £6.6 billion annual cost that Liz Smith has referred to. As the member should know, data that was supplied by public bodies for 2022-23 and was published towards the end of last year indicated that public bodies’ total resource expenditure was more than £23 billion, through which they delivered a huge range services, including in health, education justice and elsewhere.
Of that, public bodies spent almost £1.3 billion on running their corporate functions, and another £2.3 billion was spent by those corporate functions. Public bodies passed through funding of more than £7.6 billion to other organisations, including third sector and public sector organisations. An additional £800 million was spent on the Scottish Government’s own operating costs.
It is our intention to continue to collect that data on an on-going basis to enable the identification of further opportunities for more cost reductions through the removal of duplication and increased efficiency in service delivery.
I thank the minister for that answer. Nonetheless, serious concerns have been issued by the Information Commissioner. Whatever the total is—I have to say that it is strange that the Scottish Government is questioning what the Information Commissioner has said—will the minister make an absolute commitment, in the light of the Finance and Public Administration Committee’s concerns, to ensure that the number of quangos in Scotland is reduced and that we get greater transparency and scrutiny about how that will happen?
First, the number of “quangos”, as Liz Smith calls them, has been reduced. We published data that shows that the number has come down from 199 when we took over to 131 at the moment. There has therefore been a significant reduction.
However, the important point is the data. I am, frankly, disappointed that the member has not looked up the extensive quantity of data that we published on precisely the point about expenditure, down to a very high level of granularity, at the end of last year. We are absolutely committed to being transparent about that data and understanding where there are opportunities to drive further cost savings across public bodies’ running costs, on top of the £280 million that we have already delivered over this year and last year and the £300 million that we will deliver over the next two years.
Quangos and other public bodies have had access to the £200 million heat in buildings decarbonisation fund. One successful application was by a public body headquartered at 25 Chambers Street in Edinburgh, which was valued before the works at £4.75 million. The works cost £11.3 million and the grant was £9.1 million. That is the headquarters of no less than the Crown Office. Has the Crown Office not committed a major offence against the public purse?
As Fergus Ewing knows, we are hugely committed to identifying any use of public funding that is excessive and ensuring that it is addressed. He knows fine well about the example that he cited. Other examples have also been cited.
We are focused on making sure that, where we invest any money of that sort going forward, the value of the premises in relation to which the investment is made is taken into account in order to ensure that public funds are applied most effectively and efficiently.
National Security (Infrastructure Policy)
To ask the Scottish Government, as part of the cross-Government co-ordination of infrastructure, what discussions the finance secretary has had with ministerial colleagues regarding what consideration is given to national security in its infrastructure policy. (S6O-04391)
National security is a reserved responsibility of the United Kingdom Government. However, there are also devolved powers that are relevant to national security. Critical national infrastructure are the facilities, systems, sites, information, people, returns and processes that are deemed necessary for a country to function.
There are currently 13 official designated critical national infrastructure sectors, where responsibility is split between devolved Administrations and the UK Government. National security concerns are brought forward and given appropriate prominence in budget negotiations and infrastructure prioritisation.
The European Union is currently investigating Chinese renewable energy manufacturers on the grounds of interference by the Chinese Communist Party, and Norway has rejected their involvement in Norwegian offshore wind projects. However, the Scottish Government, through its Scottish offshore wind energy council, has ignored that and listed Mingyang Smart Energy Group as a priority bidder for infrastructure in our North Sea wind farms.
Scotland is already worryingly dependent on Chinese money, particularly in our universities. We need to be very careful about China’s involvement in renewable energy. What thought has the Scottish Government given to the risks of inviting Chinese companies into the heart of Scotland’s energy infrastructure?
As a broad response to Alex Cole-Hamilton, I say that I recognise the issue that he raises, and we should all be very vigilant and cognisant of the points that he makes.
In relation to the offshore wind infrastructure projects, I would prefer that Alex Cole-Hamilton gets a written response that specifically addresses his points. The matter sits slightly outwith my direct ministerial responsibility, but I want to make sure that he gets an accurate response, so I will make sure that he gets that in writing.
Private Finance Initiative and Public-Private Partnership Payments (Support for Local Authorities)
To ask the Scottish Government how it is supporting local authorities, such as West and East Dunbartonshire Councils, that have to make PFI and PPP payments. (S6O-04392)
The Scottish Government provides funding to support local authorities with payments relating to their PFI and PPP contracts by way of the annual local government settlement.
In my constituency, the equivalent of 37.9 per cent of council tax in East Dunbartonshire and 41.2 per cent of council tax in West Dunbartonshire goes on PPP repayments. That is a shocking amount. Labour’s financial mismanagement has clearly had severe consequences, and those wasteful deals are being paid back by the council tax payer. Does the cabinet secretary agree that that highlights why the Labour Party cannot be trusted to manage Scotland’s finances?
I agree with Marie McNair—this Government has always made it clear that the PFI approach that was used by Labour has not delivered best value for the taxpayer. That is why we brought it to an end and introduced more affordable schemes in order to reduce the drain on the public purse and stop excessive profits.
Unfortunately, we are still paying for the legacy of those mistakes, and we will be doing so for many years. It is a timely reminder of the incompetence of Labour in government on those matters.
Local Government Funding
To ask the Scottish Government how the total funding that it has provided for local government has changed over the last decade in real terms and as a proportion of total spending. (S6O-04393)
Given the changes in the Scottish Government’s devolved powers over the past decade, we must be cognisant of the fact that it is not possible to apply direct like-for-like comparisons in Scottish Government funding levels, notably due to the devolution of around £5.6 billion for the administration of social security benefits. However, the local government finance settlement has increased by 41 per cent since 2015-16, which is a real terms increase of 2.4 per cent.
It can be easy to focus on short-term developments as the cause of issues that Scotland faces instead of looking at the full picture, but we must look at the full picture because we need to know why councils are struggling to provide key local services, as we can see they are.
Despite the shameful spin from Shona Robison, the real picture of the past decade shows how, under the Scottish National Party, real-terms funding for local councils in the form of general revenue grants has stagnated. It has not increased by even 1 per cent, despite the Scottish Government’s budget increasing by nearly 20 per cent. Local authorities such as Dumfries and Galloway Council are still having to grapple with rising staff costs, inflation and pressures on services such as children’s residential placements, all of which has resulted in a 9 per cent increase in council tax.
Can the cabinet secretary explain why the Government has consistently decided to make local government funding one of its lowest priorities?
We have not. The Accounts Commission has confirmed that, over the past three years, there has been a real-terms increase in local government funding. As I said in my first answer, the local government settlement over the past 10 years has increased by 41 per cent, which is a real-terms increase of 2.4 per cent. Those are the facts.
The other fact is that, if we had listened to Finlay Carson and had unfunded tax cuts of £1 billion, local government would be getting less money, not more, to fund local services. That is the reality of the situation. [Interruption.]
Mr Hoy, I called you for a question earlier, but I have now heard at least three attempts to intervene since then. Please be quiet.
I welcome the record level of funding for local authorities in this year’s budget, which passed last week with cross-party support. Will the minister outline how that will support local authorities across Scotland to increase and improve services for their communities, in contrast with the 30 councils in England that are in dire need of a total of £1.5 billion of emergency funding for 2025-26 just to keep them afloat?
That £1.5 billion in emergency funding is the Tory legacy for local government funding. The local government finance settlement provides local authorities with an additional £1.1 billion in funding, which is a real-terms increase of 5.5 per cent, along with full discretion over council tax. We will continue to work in partnership with the Convention of Scottish Local Authorities and with local authorities to make sure that local authority finances are sustainable and that communities across Scotland continue to receive the high-quality front-line services that they expect and deserve.
That concludes portfolio questions. There will be a brief pause before we move to the next item of business to allow members on the front benches to change seats.
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