Official Report 1092KB pdf
Deputy First Minister Responsibilities, Economy and Gaelic
We now continue with this afternoon’s business. The next item of business is portfolio questions, and the first portfolio is Deputy First Minister responsibilities, economy and Gaelic.
Brexit (Trade Impact)
To ask the Scottish Government what its response is to the findings from Santander on the impact of Brexit on United Kingdom-European Union trade, as it relates to Scotland’s economy. (S6O-03845)
Considerable evidence is now available that demonstrates the damaging economic impact of Brexit. Researchers from Aston University recently estimated that, in 2023, exports of goods to the EU were 17 per cent lower and imports of goods were 23 per cent lower, and, according to analysis by the National Institute of Economic and Social Research, the UK economy was 2.5 per cent smaller in 2023, all of which is attributed to Brexit.
In Scotland, despite our unequivocal vote in the referendum to remain in the EU, we are not spared Brexit’s effects or its costs to the Scottish economy.
As well as lost trade, Brexit has led to staffing shortages in many sectors across our economy. What measures are available to the Scottish Government to reduce the barriers for business to attract EU workers to fill vital roles?
The member is right to highlight the particular impact of Brexit on staffing shortages. EU citizens who moved to Scotland and made a significant contribution to our economy have in many cases returned to their home countries.
It is deeply disappointing that the migration system is not currently meeting Scotland’s distinct demographic needs. We have been clear that changes to the system are vital to support employers and individuals. We need a migration route that is tailored to Scotland’s needs, particularly through a Scottish visa or a rural visa pilot. Both proposals are on the table and we hope that the UK Government will take them seriously.
Disabled People (Participation in the Economy)
To ask the Scottish Government what its position is on whether the participation of disabled people in the economy is of significant benefit. (S6O-03846)
Presiding Officer and members in the chamber, please accept my apologies for my failure to be present at the opening of portfolio questions. I misunderstood when the meeting would be reconvening.
The participation of disabled people in the economy is an important factor in individuals’ ability to thrive and to lead fulfilling lives, and growing the economy is one of the Government’s top four priorities. The programme for government sets out how we will support people who are already in work, help more people back into work and address long-term economic inactivity. Alongside our national employability offer, that includes improving access to health services by 2025 and introducing enhanced specialist support for disabled people across all 32 local authorities.
Disabled people make up around 20 per cent of the population in Scotland, but many of them remain unable to participate in society due to historical and systemic barriers that still exist. Does the minister agree that we deserve to have a champion in the shape of a disability commissioner to ensure that the future is brighter than the past?
I recognise the substance of the member’s question and his championing of the idea of a disability commissioner. I appreciate that Parliament will consider that role in more detail alongside the broader commissioner landscape.
I reassure the member that this Government is committed to closing the disability employment gap in partnership with not only local government but the United Kingdom Government, given the significance of reserved areas in the employability landscape and the UK Government’s agenda on closing that gap. I am committed to working in a genuine spirit of partnership to ensure that we close the disability employment gap so that we can have a Scotland where everyone who wishes to fully participate in the labour market can do so.
Anyone who wants to secure and sustain work should be able to do so, regardless of disability. Can the minister provide an update on the Scottish Government’s ambition to ensure that people seeking work who are disabled or have long-term health conditions are offered support from a dedicated employability adviser, as outlined in the programme for government?
Through our no one left behind approach to devolved employability services, disabled people are eligible for support from a dedicated adviser in all 32 local authorities. Our statistics show that we are making progress, with the proportion of disabled people who are accessing our services increasing. However, we are committed to doing more to tackle labour market inequality, which is why we committed in the programme for government to introducing specialist employability support from summer 2025. That will ensure greater levels of support locally for disabled people to select, obtain and retain employment.
Enterprise Agencies (Performance Evaluation)
To ask the Scottish Government how it evaluates the performance of the enterprise agencies in directly investing in businesses. (S6O-03847)
Our enterprise agencies have a critical role in helping businesses to start and scale, be more productive, access finance and attract investment, develop new products and services, enter new markets and have a positive impact on communities. The agencies evaluate the support that they provide to businesses in order to assess the effectiveness and impact of their activity. They report on their performance throughout the year and publish their results in their annual reports and accounts. Scottish Enterprise also monitors investment activity in Scotland and publishes an annual overview of trends and performance.
According to those published numbers, in 2023-24, Scottish Enterprise invested just 15 per cent of its budget, or some £53.4 million, whereas South of Scotland Enterprise invested 55 per cent of its budget, or some £35 million, and Highlands and Islands Enterprise invested 72 per cent of its budget, or £63 million, despite very different levels of funding. Given that funding for the enterprise agencies has fallen by £46 million in real terms since 2016, what steps will the Government take to ensure that it maximises the outcomes and the impact of investment that is undertaken by the enterprise agencies?
Each enterprise agency takes its own decisions in line with the priorities for its region. Scottish Enterprise’s co-investment in Scottish venture funds has been highly successful, with £158 million invested in 229 companies between mid-2015 and spring 2020. That investment leveraged almost £500 million from the private sector, achieving a 3:1 ratio. Over the past 21 years, Scottish Enterprise has invested £921 million, which has leveraged £2.45 billion of private sector investment. Clearly, Scottish Enterprise is of a different scale to the other enterprise bodies and it deals with different issues, just as Highlands and Islands Enterprise has its own remit, for example. The Scottish Government is very content with the results of Scottish Enterprise’s co-investment.
Scottish Enterprise has delivered its strongest-ever performance on jobs and capital investment during a record year. Can the minister say any more about how we can build on the strong track record and continue to support businesses and drive innovation?
The ambition in the current action plan that is being developed by industry is to better tailor existing and new support to specific requirements in the sector in order to grow Scotland’s ambitious ecosystem, which includes strategies in relation to the national strategy for economic transformation. A number of policies are in place to build on existing innovation and successes.
Young Enterprise Scotland plays an important role in offering enterprise education to schools, and it has done so for more than 30 years. Recently, it was reported that the organisation was at risk of closure as the Scottish Government had initially decided to discontinue its funding. Although I was pleased to hear that funding has now been allocated by the Scottish Government, such organisations should not have to wait for last-minute solutions. What action is the Scottish Government taking to ensure that such organisations are properly funded so that pupils receive education on enterprise?
As the member will be aware, and as she referenced, the Deputy First Minister announced yesterday £285,000 for Young Enterprise Scotland, which is doing a grand job. The funding was never withdrawn; discussions were on-going. The Scottish Government values the work of Young Enterprise Scotland, which is evidenced by the support that we have delivered, as announced yesterday.
Games Sector (Support for Entrepreneurship)
To ask the Scottish Government how it is supporting entrepreneurship in Scotland’s games sector. (S6O-03848)
The Scottish Government is committed to supporting entrepreneurs across all sectors, including our vibrant games industry, which contributes significantly to Scotland’s economy and culture. We are delivering support through our key entrepreneurship strategies, including initiatives such as Techscaler and the ecosystem fund. We have funded Scottish games week for two consecutive years and consider games as a priority sector in our international Techscaler strategy. Following ministers’ meetings with industry figures, we are also working with the sector to develop an action plan and strategy to better target support for Scotland’s games ecosystem.
There is no specific mention of the games sector in some of the strategies, although they mention data, cyber, fintech and artificial intelligence in other areas. How can we enhance the games sector, which contributes £180 million in gross value added to the Scottish economy? It performs well in United Kingdom terms, but compare that £180 million with the almost £2 billion that is generated in Finland, where the sector plays an integral part in the country’s technology sector, which is reflected in its funding. Does the minister have ideas about how we can improve the performance of the games sector even more in Scotland?
As Clare Adamson rightly highlights, the games sector in Scotland has massive potential, which is why we are keen to hear the outcome of the current work by the industry on what a strategy for the future of the sector in Scotland should look like. There is a lot of cross-pollination between the games sector and other high-tech sectors in Scotland. We should do more to recognise and support that, and that could lead to more potential being realised in the sector.
Of course, the new edition of Grand Theft Auto is about to be announced in the coming months, and I read in the tech press that it is expected to become the fastest-selling game of all time. We should celebrate that, as a country, because it is one of many famous games that have been born in Scotland.
Grand Theft Auto was born in my home city of Dundee, and we should be proud of it. It is part of what is now the biggest entertainment industry in the world: gaming. Scotland has a really good footprint in that area, but much more can be done.
Will the cabinet secretary reflect on the particular success of Screen Scotland as a model for supporting a sector? What can we learn from that policy success that can be translated into the games industry?
As I indicated in my previous answer, the industry feels that many of the wider benefits of the games sector in Scotland are not recognised to the degree that they should be. That is why we have given a commitment to support it in the development of a strategy for the future of the sector.
Of course, I agree that we should consider what we can learn from Screen Scotland and from other policies affecting other sectors. We have many high-growth tech sectors in Scotland at the moment, and the technologies that are developed in the games sector are central to those other sectors. That is why we need more joined-up thinking in Scotland, and the games sector is keen to be at the heart of that thinking and not just siloed into one sector. That is an important way forward.
Chemical Production Sector (Grangemouth) (Economic Value)
To ask the Scottish Government how it plans to sustain the economic value of the chemical production sector based around Grangemouth. (S6O-03849)
We are committed to securing a long-term and sustainable future for the Grangemouth cluster. We will shortly publish our draft Grangemouth just transition plan, which details the shared vision for the future of the cluster as Scotland’s premier location for investment in advanced chemical manufacturing. As part of the plan, which has been developed in collaboration with the Grangemouth future industry board, representatives from the chemicals manufacturing sector are supporting the development of a cluster strategy that is aimed at attracting new investment. That work will be supported by the Forth green freeport and the Falkirk and Grangemouth growth deal.
The threat to the refinery is equally a threat to the chemical cluster and a threat to Scotland’s economic economy. Given the recent award of Scottish Enterprise funding to Ineos for the green freeport initiative, what further incentives might be provided through the Forth green freeport, or directly to the cluster, to maximise long-term financial sustainability and enable growth, as outlined in the green industrial strategy?
Michelle Thomson makes an important point. I believe that the Scottish Enterprise funding that she is referencing is not actually part of the green freeport programme but is part of funding for exploration of the potential for hydrogen generation at the site. Grangemouth has the potential to be a significant part of Scotland’s low-carbon transition, which is why we have confirmed £50 million through the growth deal and have jointly funded the £1.5 million project willow study, which was discussed again yesterday in my regular meeting with the Secretary of State for Scotland. A range of specific interventions and supports are available.
Closure of Grangemouth Oil Refinery (Update)
To ask the Scottish Government whether it will provide an update on the potential closure of the Grangemouth oil refinery and any economic impact that this may have. (S6O-03850)
I remind members of my voluntary declaration of my trade union interests.
As Richard Leonard will know, Petroineos announced on 12 September that refining would cease during the second quarter of next year. That is a commercial decision that was taken by the business alone and despite the joint efforts of the Scottish and United Kingdom Governments to secure those investments in the asset beyond 2025.
It is our understanding that the immediate impact of that decision will be the loss of around 400 full-time roles. We are all—jointly, as Governments—committed to doing all that we can to support the workforce during the transition period. That is why we announced the provision of tailored skills training at Forth Valley College, which is supported by both Governments and is targeted towards those who are directly impacted by the decision.
The cabinet secretary must know that the rate of unemployment in Grangemouth is already twice the national average and that this is a community that is already impoverished.
The statutory redundancy consultation closes in mid-December, so the clock is ticking, but there is still time to save these jobs. In the coming days, will the economy minister, together with the First Minister, intervene—just as I call on the UK Labour Government to intervene—to avert the redundancies and extend the life of Scotland’s only oil refinery? Will it do so not only in the interests of those workers, their families and this community but in the strategic interests of our country’s economy, energy security and national security?
Richard Leonard made an important point about the impact of the loss of those jobs on the local economy. That is precisely why, for the past few years, the Scottish Government has been doing everything in its power to save the jobs and to save refining at Grangemouth. We are still working to support individuals who are at risk of redundancy through the skills package that I talked about in my opening answer. The funding that we have put in place will allow Petroineos employees at Grangemouth to access the opportunity to reskill, and we will support them with new employment.
The long-term future for the site is precisely why we are involved with project willow. We have spent considerable sums of money during the past few years looking for a long-term future for Petroineos. This is a commercial decision. We are all keen to jointly ensure that there is a future for those workers, and we are working together to do that.
It is vital that we continue to support the workers based at Grangemouth and their families during this difficult time. I welcome the additional funding that the Scottish Government has provided through the Falkirk and Grangemouth growth deal. Will the cabinet secretary say more about how that will help to grow the regional economy and support the community and workers?
The £50 million that will be provided through the Falkirk and Grangemouth growth deal over the next 10 years is designed to unlock economic growth opportunities that will create the jobs that ensure that the unemployment rate is low and employment rate is high. We must not lose sight of economic inactivity.
Our investments in the growth deal include £2 million towards the sustainable manufacturing campus to allow the development of new technologies in the region and £12 million on the greener Grangemouth programme. The wider growth deal is expected to bring significant benefits during the coming year and to generate £628 million over the next 30 years.
Business Taxation
To ask the Scottish Government what discussions the economy secretary has had with ministerial colleagues regarding how its approach to business taxation supports the economy. (S6O-03851)
Ministers meet regularly to ensure that the economy is prioritised in work that is under way across Government. Our view is informed through extensive stakeholder engagement with the business community, think tanks, civic society, tax professionals and local government.
I have previously supported that, and I have suggested that the large retailer supplement is an aspect of business taxation that could be revisited, as it is reported to have raised £95 million from 2012 to 2015. Given that the Fraser of Allander Institute has previously suggested that retailers make an excess profit of £30 million per year due to minimum pricing, what assessment has the Scottish Government made of the economic impact and budgetary benefit of a future large retailer levy for large retailers that sell alcohol?
The Scottish budget for 2024-25 signalled an intention to explore the reintroduction of a non-domestic rates public health supplement for large retailers in advance of the next budget.
The Scottish Government has engaged with relevant stakeholders, including public health organisations and retailers, to explore the potential effects that the reintroduction of a public health supplement might have. We are committed to consulting the new deal for business group on the policy. That will ensure that considered and informed decisions can be made in the context of the Scottish budget for 2025-26.
The United Kingdom Chancellor of the Exchequer has announced a hike in employers’ national insurance contributions to 15 per cent, which will hammer businesses across Scotland. However, the same budget has delivered substantial Barnett consequentials to Scottish finances.
As we know, in the past two years, the 75 per cent rates relief has not been passed on to retail, hospitality and leisure businesses in Scotland. Given that the Scottish budget might well be enhanced, is it not time to consider supporting our businesses with lower taxes, rather than doing what Bob Doris suggests and hitting them with even further increases?
As Murdo Fraser will be aware, there are non-domestic rates reliefs totalling £685 million this year. He will appreciate that the budget has just been delivered. Decisions about next year’s taxation regime will be set out by the finance secretary at the budget, and we—rather like the bond market and everyone else—are currently digesting the UK Government budget.
Ferguson Marine (Port Glasgow) Limited
To ask the Scottish Government what progress has been made towards securing a long-term future for Ferguson Marine. (S6O-03852)
We have been working closely with the board of Ferguson Marine to look at the options for a sustainable future. Graham Simpson will know about our willingness to provide substantial new funding to modernise the yard, to enhance productivity and to strengthen its ability to compete for new business.
The Deputy First Minister will be aware that Ferguson Marine is in the running for the small vessel replacement programme, which is good news, but what happens if the yard does not win any of that work? Is there a plan B? Is Ferguson Marine in line for any other contracts? What is the plan to return it to the private sector?
I am glad that I was sitting down when Graham Simpson said that something was good news. I share his optimism on that point. We are all pleased to see progress in the procurement process for seven new small vessels. As he said, Ferguson Marine is one of the six shipbuilders that have been selected by Caledonian Maritime Assets Ltd, the procuring authority, to move to the next stage. He will know that, as per procurement legislation and guidelines, I am not involved in the review or selection process, and I would be loth to be drawn into commenting further on a matter that he might come back to criticise me on. We will leave it at that, but we can agree that it is good news.
We have a brief supplementary question from Stuart McMillan, who joins us remotely.
Thank you, Presiding Officer.
Mr McMillan, would you put your camera on, please?
Thank you, Presiding Officer.
Mr McMillan, you do not have your camera on, and we like to see people live when they are speaking.
I welcome the Scottish Government’s work so far to save the jobs at Ferguson Marine and its commitment to protect those jobs through the significant investment to help to future proof the site. Will the Deputy First Minister say any more about what she hopes to achieve from that investment and about the long-term benefit to the yard?
Stuart McMillan will know that, when I set out that additional investment, I said that it would always be subject to the completion of the necessary legal and commercial evaluations. Our hope is that the additional investment secures a long-term future for the yard by making it more competitive and more productive, meaning that it is able to compete when it comes to tenders for additional work. Ultimately, that is the route by which Ferguson Marine has a long-term future, which will put to best use the brilliant skills of the workforce at the yard.
That concludes portfolio questions on Deputy First Minister responsibilities, the economy and Gaelic. I apologise to those few members whose supplementary questions I was unable to take, but we are very tight for time this afternoon. There will be a short pause before we move on to the next portfolio.
Finance and Local Government
The next portfolio this afternoon is finance and local government.
Community Assets (Youth Groups’ Access to Funding)
To ask the Scottish Government how youth groups can access funds to buy community assets. (S6O-03853)
The Scottish land fund is a funding source for community groups that are looking to purchase assets in their community. It is open to all groups that are community led, community controlled and defined by a geographic area. That can include youth groups based in those communities. Any such group should contact the National Lottery Community Fund, which administers the Scottish land fund on behalf of Scottish ministers, and it will be given guidance and assistance on how it can apply to the fund.
The 18th Inverness (Muirtown) scout group wishes to apply to Scottish Canals for an asset transfer of its scout hall. However, the Community Empowerment (Scotland) Act 2015 does not designate scout groups as community bodies that are eligible to make asset transfer requests. Scottish ministers have the powers under the act to designate and make eligible such organisations. Will the Scottish Government designate scout groups as bodies that are eligible under the act to make asset transfer requests? Their activities fall within the spirit of the act.
For transparency, I should say that my husband is a scout leader with the 18th Inverness (Muirtown) group.
As I said, the opportunity to purchase assets is open to all groups that are community led, community controlled and defined by a geographic area.
I am happy to take up separately with the member the specific instance that the she mentioned, to explore what opportunities there are to ensure that the scout group is able to be part of the process, because, as I said, it can include youth groups that are based in those communities.
Local Authorities (Balanced Budgets)
To ask the Scottish Government what plans it has in place for local authorities that may be unable to fulfil any legal requirements for a balanced budget in the forthcoming financial year. (S6O-03854)
Scottish ministers remain committed to working with local government to ensure the sustainability of local services. However, local authorities have a statutory duty to set a balanced budget, and it is for locally elected representatives to decide how they do that.
I was asking what the plans are in case that does not happen. What will the cabinet secretary do when a Scottish council cannot set a budget? Does she recognise the huge problems of health and social care overspends, wage bills, pensions and unfunded Scottish Government commitments? When will she come up with a long-term plan for local government to stop it teetering from crisis to crisis?
I am not sure whether Stephen Kerr got the memo that the Scottish Tories are now looking to reduce spend across public services. That was certainly the outline that was given by its new leader, Russell Findlay.
We take seriously our responsibilities to fund local government. That is why we have funded local government with £14 billion, which is a real-terms increase. That is not just according to us but according to the Scottish Accounts Commission and the Scottish Parliament information centre.
That does not take away from the enormous pressures that local government and other public services face, which is why, as part of the budget, we will discuss those matters with local government, as we are doing, to make sure that we can support it to reach a sustainable position. Of course, yesterday, I set out the Scottish Government’s plan to publish a sustainability delivery plan alongside the medium-tern financial strategy in the spring.
In evidence to the Finance and Public Administration Committee on 1 October, council leaders and directors of finance warned us that they are already at breaking point, with the delivery of statutory services under clear threat. Does the cabinet secretary not accept that it is her Government’s chaotic and incompetent approach to budgeting that has left council services on their knees?
No, I do not accept that, because the Accounts Commission and SPICe have both acknowledged and agreed with the Scottish Government that the local government settlement of £14 billion is a real-terms increase in funding, and, indeed, an increasing share of the Scottish Government’s discretionary spend. Despite all the financial challenges, local government has had a bigger share of the available pot.
That is not to say that I do not recognise some of the challenges that local government has. We are working closely with the Convention of Scottish Local Authorities, and we will continue to do so, as we work towards the budget on 4 December.
Management of Scotland’s Finances (Transparency)
To ask the Scottish Government what steps it is taking to improve transparency in the management of Scotland’s finances. (S6O-03855)
The Scottish Government is open and transparent on the Scottish budget and the management of Scotland’s finances. Through successive open government national action plans, we have worked with the Parliament, its committees and wider stakeholders to improve understanding of our public finances, and 23 supporting documents were published for the Scottish budget 2024-25. We also intend to publish data on and analysis of public body expenditure by the end of November.
I thank the cabinet secretary for that answer. Parliament should be able to scrutinise the budget and ensure that the Scottish Government spends taxpayers’ money effectively. Instead, we have creative, selective and often complex presentation of figures, key budget documents going unpublished and well-regarded voices, including those of the Fraser of Allander Institute and Audit Scotland, criticising the Government’s failure on transparency. Can the cabinet secretary guarantee that all the agreed information will be supplied to the Scottish Fiscal Commission ahead of the Scottish budget? Will she use the 2025-26 budget to put an end to 17 years of creative accounting and financial sleight of hand?
I do not accept that characterisation at all. In fact, for 17 years, we have delivered a balanced budget. For last year, we again had an unqualified set of audited opinion, so there has been no qualification by the auditors of the Scottish Government’s finances. Foysol Choudhury should reflect on that when he uses such language.
With regard to scrutiny and transparency, for this budget, I have agreed to attend additional evidence sessions with the Finance and Public Administration Committee and we will make sure that information is available, as we always do. I very much recognise the important role of the Scottish Fiscal Commission. We will provide the Scottish Fiscal Commission with the information that it requires to produce reports, which I know are important for this Parliament’s scrutiny.
Scotland’s Fiscal Position
To ask the Scottish Government what assessment it has made of what Scotland’s fiscal position would be today had the United Kingdom remained a member of the European Union. (S6O-03856)
Independent researchers have tracked the fiscal and economic impacts of Brexit since the referendum in 2016. According to analysis by the National Institute of Economic and Social Research, the UK economy was 2.5 per cent smaller in 2023 due to Brexit, and the gap may widen to 5.7 per cent by 2035. That equates to around £69 billion in output and £28 billion in public revenues lost in 2023. For Scotland, that is equivalent to a cut in public revenues of around £2.3 billion in 2023. That economic hole is a stark reminder of the price of Brexit.
I thank the cabinet secretary for that answer. Given Scottish voters’ overwhelming support in 2016 for remaining in the EU and the damage done to Scotland’s economy by years of continued Westminster austerity policies, does the cabinet secretary agree that it is now more important than ever for Scotland to have the powers to decide its own future?
Of course I agree with David Torrance on that point. The only route back to EU membership is through an independent Scotland, because, unfortunately, all the UK parties have abandoned their commitment to return to the EU, which is a deep regret.
Reinforced Autoclaved Aerated Concrete (Barnett Consequentials and Budget Allocation)
To ask the Scottish Government, in light of any engagement that it has had with the United Kingdom Government regarding potential Barnett consequential funding, how much it anticipates that it will be able to allocate in its budget to address any risks arising from reinforced autoclaved aerated concrete. (S6O-03857)
I welcome very much the improved engagement with the new UK Government, although I have also repeatedly made it clear that it needs to invest in public services and infrastructure, which would generate consequential funding for the Scottish budget. We are assessing the implications of today’s announcements by the Chancellor of the Exchequer for the Scottish budget, which is due to be presented to Parliament on 4 December.
I thank the cabinet secretary for that response. RAAC continues to impact more than 100 home owners in my constituency, who are required to sell their homes by agreement with Aberdeen City Council or through the use of compulsory purchase. Does the cabinet secretary agree that, in the event that no Barnett consequential funding is forthcoming, a timely funding solution that enables the council to purchase homes at a fair and equitable price, avoiding the use of compulsory purchase, should be sought as a matter of priority?
As I said earlier, we need to work through the details of today’s budget announcement, but I recognise that this is a very difficult time for affected households.
Aberdeen City Council is engaging with home owners on voluntary sales based on market value. In addition, the council has offered owners home loss payments of up to £15,000, disturbance payments and support with legal costs alongside rehoming support. Although the specific details of the offers are for Aberdeen City Council to determine, the council has stated that the use of compulsory purchase powers would be a matter of last resort. Officials continue to engage with council officers on the issue and will keep in close touch with them throughout the process to ensure that we understand the options that are available to the local authority.
We have a supplementary from Liam Kerr, who joins us remotely.
This is a really important question—
Oh, I beg your pardon, Mr Kerr—you are absolutely 100 per cent with us. Please continue.
I am here, and I am here to deliver what is a really important question, because we need to be clear. Aberdeen City Council is offering the RAAC-impacted home owners the market value of their properties plus a home loss payment, but minus the cost of repairing the RAAC roof panels. The residents have abandoned the process, because it is unfair that they are subject to a RAAC penalty, which will leave many in negative equity. Given that the issue is ultimately about the underfunding of Aberdeen City Council by the Government, does the Government intend to proactively get involved, or is it going to sit this one out?
First, I do not accept the point about the underfunding of Aberdeen City Council. I refer Liam Kerr to the comments that I made earlier about the £14 billion and the comments of the Accounts Commission and the Scottish Parliament information centre, which I know members like to quote, saying that there is a real-terms increase for local government.
However, I recognise the issue that Liam Kerr has raised about negative equity and the cost of repair, and I would certainly be willing to have a follow-up conversation. I would also want to look at RAAC generally, so perhaps that is something that we can talk about as part of the budget process.
Edinburgh (Affordable Housing Discussions)
To ask the Scottish Government what discussions the finance secretary has had with ministerial colleagues, City of Edinburgh Council and other relevant stakeholders regarding how its financial planning can support the delivery of affordable housing in Edinburgh. (S6O-03858)
The Cabinet Secretary for Finance and Local Government regularly meets ministerial colleagues and partners and stakeholders to discuss financial planning matters concerning Edinburgh and elsewhere in Scotland. Those meetings cover housing, along with other capital investment programmes.
I thank the cabinet secretary for that engagement and the collaborative work that the Scottish ministers are doing across the board to support Edinburgh in its housing challenges. With a growing population and economy, demand for housing in Edinburgh is particularly acute. As ministers are aware, land in Granton in my constituency has the potential to meet a significant amount of that demand through the Granton waterfront development. Therefore, I would be grateful if the minister and officials could continue constructive dialogue with the City of Edinburgh Council and others about coming to a financial arrangement sooner rather than later to realise more of Granton’s potential for the benefit of the people of north Edinburgh and beyond, because it could be transformational.
The housing-led regeneration and investment plans for Granton are ambitious and have the potential to deliver for local people and the regional economy by transforming lives, creating a strong sense of place and delivering jobs and prosperity. Officials are continuing to work with the City of Edinburgh Council and other key partners to explore options for how we might be able to progress the development.
Public Health Supplement (Retailers) (Assessment)
To ask the Scottish Government what assessment it has carried out regarding the potential impact of introducing a public health supplement to be paid by retailers in Scotland. (S6O-03859)
The Scottish Government has engaged with relevant stakeholders, including public health organisations and retailers, to explore the potential effects that the reintroduction of a public health supplement might have. That will ensure that considered and informed decisions can be made in the context of the Scottish budget for 2025-26.
In relation to the Scottish National Party’s new deal for business, ministers promised “Meaningful communication”, “Evidence-based decision making” and “no surprises” to the business community. Why is it that, nearly a year on, retailers are saying that they have been left in the dark when it comes to the possibility of this surtax? There has been no cost benefit analysis and no business and regulatory impact assessment. Does the cabinet secretary recognise that, if the proposal were to go ahead, we would have the highest business rates in the United Kingdom, with the resulting burdens that that would place on costs and shop prices?
There has been engagement with the Scottish Government and retailers. A number of retailers have reported how a public health supplement could impact their business, which is of course being considered as part of the exploration of the policy. As part of the commitment to the new deal for business, to which Liz Smith referred, we are committed to engaging with relevant stakeholders, including retail businesses, to ensure that the impact of any proposals on business is fully understood. Ministers have discussed the reintroduction of a non-domestic rates public health supplement in meetings with stakeholders and in other forums, and that will continue to be the case.
Local Government Finance Settlement (Discussions)
To ask the Scottish Government what discussions it is having with the Convention of Scottish Local Authorities regarding the 2025-26 local government finance settlement. (S6O-03860)
As is the case in advance of every budget, we are having regular and routine engagement with COSLA and individual local authorities as we shape our proposals for 2025-26.
The cabinet secretary must be aware of the massive cuts that are being made in communities up and down Scotland. Proposals have been made to shut libraries in Perth and Kinross, and swimming pools, community centres and other community facilities are being affected. Youth services have been devastated and housing lists are growing. Does the cabinet secretary accept that, unless the Government gives a larger share of the cake to local councils, public services at community level will be devastated?
As I said earlier, we are giving councils a larger share of the cake of discretionary spend—that share has gone up by about 1 per cent.
However, I acknowledge the point that Alex Rowley makes. It is undoubtedly the case that there is pressure on public services, and local authorities are no different in that regard. We cannot have more than 10 years of austerity for that not to be the case. As we enter the budget process, I am more than happy to discuss with Alex Rowley his views and ideas on local government. If he would like to meet me to have such a discussion, I would be more than happy to do so.
Does the cabinet secretary expect that the 2025-26 settlement will reverse a decade of cuts and stop cuts such as those that are proposed in North Ayrshire, where the local authority proposes to remove 90 teaching jobs, to impose a charge of £50 for food waste collection and to reduce other bin collections from three-weekly to four-weekly?
As I said, there is pressure on all public services. Local government has an increased share of the overall discretionary spend, but I recognise the pressure on services. We will look at that, along with all the other priorities for the budget for 2025-26. We are having regular dialogue with COSLA and, indeed, individual local authorities, in the course of which many of those points are made. I am more than happy to discuss the matter with others across the Parliament. If Katy Clark wants to meet me, I extend to her the same offer that I extended to Alex Rowley.
Given the significant implications for the Scottish budget and the Scottish Government’s ability to provide a suitable settlement for local government, can I ask the cabinet secretary to give an initial reaction to the UK budget in relation to local government?
We are working through the detail of the budget. I recognise that it is very much a step in the right direction, particularly in relation to the capital availability for 2025-26. We need to work through the detail on issues such as the impact of national insurance employer contributions to the public purse. That will be one factor that we need to look at.
However, it is not possible to address more than a decade of austerity in one budget, so we need to see investment continue in order to repair the damage of years of austerity and the removal of £15 billion of resources from public services since 2021. That will take more than one budget to address, but we are pleased that our calls for investment in public services have been heeded. As I said, what we have seen today is a step in the right direction.
Councils cannot be expected to deal with the implementation of policy when they are continually squeezed to breaking point while the costs of delivering statutory duties, such as those relating to social care, keep on rising. What steps is the Scottish Government taking to ensure that the forthcoming local government finance settlement provides the real-terms increase in discretionary spending powers that local authorities require?
As I said earlier, we will look at that and will talk to COSLA and local authorities and, indeed, individual members across the chamber about the local government settlement.
However, I think that Alexander Stewart has not got the memo from his leader, Russell Findlay, who has made it clear that spending on public services needs to be reduced in order to fund a reduction in taxes. It is not possible to increase funding on local government or anything else and to reduce taxes at the same time. That is simply not credible or economically literate.
We will continue to discuss such matters. I am more than happy to meet any member who wants to talk about the funding of local government as part of the budget discussions.
That concludes portfolio question time. There will be a short pause before we move on to the next item of business.
Air ais
Motion of CondolenceAir adhart
Schools (Funding)