Seòmar agus comataidhean

One of the other areas of interest, which might already have been brought to your attention, is the use of the ScotWind money to fund day-to-day revenue expenditure. Professor Bell said:

“The ScotWind money can be thought of as equivalent to a sovereign wealth fund, and a sovereign wealth fund should be used to support future generations, because it is a sort of one-off payment.”—[Official Report, Finance and Public Administration Committee, 9 January 2024; c 14.]

What thinking did the Scottish Government give to that use of that money and the breaching, if you like, of the sovereign wealth fund principle? I know that we have often commented on what appears to be the UK Government’s arbitrary waste of money gained from oil that could have been used to the benefit of future generations. I would appreciate hearing more about the thinking that led you to consider, despite that, still spending it on day-to-day revenue.

Just to put something on the record, at last week’s Education, Children and Young People Committee, Minister Graeme Dey pointed out that

“The starting point for colleges next year will be slightly better—only slightly better, I stress—than the finishing point for this year.”—[Official Report, Education, Children and Young People Committee, 10 January 2024; c 30.]

My first question, which is a kind of rapid-fire one, picks up on a point that you have just made, cabinet secretary. Have the Opposition parties put forward budget proposals this year for what they would like to be cut in what is a very difficult budget, as you have set out?

I will move on to public sector reform. I have seen the phases that have been set out, but I am aware that the committee did not receive an accompanying financial strategy, which the former Deputy First Minister committed to in March 2023. Is the intention to provide an updated financial strategy at an appropriate point, once the early scoping phases are out of the way? If so, what timescales are you working to?

You have stated that you require all Scottish Government portfolios to set out savings and reform plans. If I were cynical, which, of course, I am, I would suggest that turkeys do not tend to vote for Christmas, so asking those bodies—I think that there are 129 rather than 131, convener—to consider tightening up reform themselves, or even suggesting that they do not need to exist, seems optimistic.

The problem is that, when you create a body, it takes on a life of its own and develops a vested interest. This is a question that I asked the former Deputy First Minister. It is my experience that turkeys do not vote for Christmas so, although public bodies might suggest some tinkering reforms, they will be unwilling—for very obvious reasons—to make the scope and scale of reforms that are really needed for you to achieve some savings. I would appreciate your thoughts on that. That is my final question, convener.

The outlook for public sector finances is not going to get any better. The Conservatives have guaranteed that, and there are certainly no further offerings from the Labour Party should the UK Government change. Will the cabinet secretary consider, in future years, setting fiscal rules to protect the money from ScotWind?

I am pretty confident that, had various UK Governments been challenged over not building any fund with the oil money, they would have cited public sector pressures in exactly the same way. Will the cabinet secretary consider developing and then sticking to fiscal rules? Otherwise, we will embed ourselves in a financially dependent situation, rather than the opposite. We can look at what Norway has managed to do.

Obviously, I note what you said about levering in additional private investment. That is the money, but we need to have companies that are trading effectively. I also take it that you are describing long-term investments, most likely from pension companies, where there is probably a high demand, so it will take a long time to structure those things.

The other area that has been noted with concern is the rent freeze. That is why some companies, such as Springfield Properties, have moved away from build to rent at present, but build to rent is the only way, or one of the critical ways, in which we can realistically get to the scale of building that we need. I think that businesses are accepting of rent caps, but rent freezes make for a perception of a less benign operating environment than is found elsewhere.

How do you juggle the need for businesses to come back into the market, particularly regarding build to rent, with what I fully understand has been the need to protect people through some very difficult times? That need is, in itself, a function of the chronic issue of supply: that is why rents were going up. It is a cyclical problem. Do you recognise that rent freezes have created a perception that has introduced a cooling in those wanting to proceed with the likes of build-to-rent?

I thank the minister for joining us. I fully appreciate the scale of the challenge that is in front of you. I appreciate that there are multiple stakeholders, but I first want to ask about how the enterprise agencies’ role in post-school education reform will work. What will their role be in relation to the interface with workforce planning, to ensure that we get the skills that we need for the future? What are your thoughts on that?

Is it fair to characterise that approach as creating a new culture of engagement? You are describing a considerable amount of engagement, which is time consuming. I appreciate that. Are you consciously undertaking changing culture in your engagement?

That was a very helpful response. In your opening remarks, you alluded to who might have the best oversight of future requirements. One challenge is how we can correctly map today’s gaps against future needs. Can I make the assumption that, in reflecting on who has the best oversight of that, the focus will be on the future? That is where we need to get ahead of the pack as we go through the exercise.

That is very helpful. You have illustrated the complexity of the matter.

The independent review of the skills delivery landscape highlights

“the importance of getting the structures and balance of responsibilities within the system right, alongside an agreed vision for success and a shared language.”

Although the report may say that, the mix of stakeholder groupings needs to be able to buy into it.

There are big key terms in that excerpt: “agreed vision for success”, “shared language”—presumably, there will need to be shared outcomes as well—and

“the structures and balance of responsibilities”.

I would appreciate hearing your thoughts about the approach that you are taking to pull that multiplicity of stakeholders together to achieve that.