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I might be wrong, but I think that today is the third or fourth evidence session in which we have touched on that issue as an emerging and on-going initiative that we hope will make concrete strides, so I am glad that the issue has been brought up again.

I will provide an update to the committee on progress since I gave evidence with the health secretary, Humza Yousaf. We have set up a short-life working group with health colleagues to agree a clear set of actions for collaboration. The terms of reference are being drawn up and all the things that you would expect to happen to make the process productive are happening. The group involves health and wellbeing colleagues for their comment, including colleagues with particular expertise in policy interests regarding social prescribing. However, the group will have a broader remit than that, as it will cover a range of policies that cross various bits of government.

We will provide more information on the work of the group in our culture strategy action plan, which will be refreshed before the end of the year, so the Government is considering the issue. I do not want to give the impression that the matter has gone somewhere that it will take a very long time to come back from, or that we will not hear anything because people are away thinking great thoughts for far too long. The work needs to be on-going. Be assured that we are seized of the matter.

The circumstances that we are in now do not make this any easier, because it does not take long before people ask questions about additional funding. We are back to our new initiatives; this would be a new initiative. How do we make a new initiative happen? At some point, money comes into the equation. There is also an additional challenge, to which I do not have the answer yet, but I will signal it. No doubt you would be asking questions about this if I was here with Humza Yousaf again. If there is a growing cultural dimension to health and wellbeing, as there should be, should the health portfolio fund it, or should the culture portfolio fund it? Those are bridges that we will have to cross.

I know that we have a very strong focus on health. It was very helpful that Humza Yousaf and I sat next to each other and publicly declared that we want to make progress on the issue. I am very keen that it goes even wider than that; I have reported to the committee before that it was a Cabinet decision that culture would be mainstreamed across the whole of Government.

There are significant areas of positive impact—for example, I mentioned justice. Many cultural organisations already play a significant role in helping with rehabilitation and with the mental health of people in the justice system, but much more can be done. Similar questions arise about funding, but that should not deter us from making progress.

I have given concrete answers to Ms Minto’s question in relation to the administrative and governmental progress that is being driven across departments. The eternal challenge is to ensure that we are not stuck in our silos, is it not? We will all have to work to help our colleagues who have responsibility for health, education, justice and so on to realise that culture, and much that the culture sector can offer, should be integral to the thinking of many more people than has been the case up to now.

That issue was partly the subject of conversations that I had with UNESCO in Paris yesterday. I was very frank about the stage that we are at. We have an understanding and an aspiration, and we are committed to making progress. We are trying to make progress, although no doubt some people will say that we should be doing more or making quicker progress or whatever. That is fine—it is good to have that encouragement. A bit of pull and a bit of push are good, in this context.

I must say that UNESCO colleagues were extremely impressed that we are at the stage that we are at, and are very keen for us to engage with them, with a view to our sharing what we are doing with other countries and cultural organisations—not because we have the perfect solutions or all the practical applications of how to make things work, but because we are perhaps slightly further down the track than other places are. That is a good thing. The subject is not only relevant in Scotland, although it is extremely relevant here in Scotland; that is our responsibility. We should do our best to work with colleagues elsewhere, and not only to help those who want to emulate, follow or work in parallel with us.

I am keen to understand better whether there are countries that are further down the road. I am sorry—I know that I am digressing slightly, convener. As another update, I note that last week I met the head of the British Council and we discussed how best we can be informed about initiatives in other parts of the world that are further ahead or that are doing things better or in different ways. That could help us to identify and appreciate what we might want to do, and could encourage us to do it. It could also help us not to take a wrong turn somewhere along the way. I am not sure that we have a mechanism in place for that yet. I think that such learning could be relevant for the Parliament’s committees, the Government and its ministers.

How we might do all that was discussed during the Edinburgh international culture summit 2022. I am keen that we learn from others as much as we can, because that will help us to get to where we want to be more quickly than would be the case were we just trying to test our own approach. No doubt the committee will do that, but I strongly encourage members to work in partnership with the Government to ensure that we are best informed about what works. I know that some committee members have a very strong interest in the area. Ms Boyack is not here, but she, together with Mr Ruskell, are examples of members who have repeatedly expressed an interest in the matter. I am sorry—I have started to mention specific committee members. I will get into big trouble for not mentioning everyone.

Yes, yes and yes. We covered some of this ground while you were at the corporate body meeting. In general terms, I made the point that, during the Covid pandemic, additional funding was made available to the Scottish Government. It was up to the Government to decide how that funding would be dispensed to deal with the Covid emergency, and very significant additional support was provided to the cultural sector, for the reasons that Ms Baker has rightly pointed out.

However, it is important to put on record the fact that we do not have additional funding to deal with the present circumstances in which we find ourselves. Unless there is additional funding or, indeed, additional powers for the Scottish Parliament to raise funds—as we know, we are pretty much unique in world governance terms in not being able to borrow in times of emergency—we will have to manage our finances within the constrained devolution settlement in which we find ourselves.

If I were an organisation that had been supported through Covid and which had emerged from Covid to find myself in constrained circumstances with much diminished support, would I feel bitter? No doubt I would. We are doing everything that we can to try to use the resources that we have, while at the same time being absolutely frank with cultural organisations and the committee about the scale of the challenge. Unless somebody is able to come along and say to me, “Here’s additional funding of the kind you had during Covid,” there is not going to be additional funding in general. We are now in an unenviable situation, and some organisations are going to find it extremely difficult, because the same scale of additional funding that was available during Covid is not going to be available at a time when we are trying to recover.

I understand very well the point that Ms Baker is trying to make, but I draw attention to another point that she has made, which I, too, make regularly. A significant part of the spending on the cultural sector that comes from the Scottish Government through Creative Scotland and Screen Scotland, for example, is key to unlocking additional resource in the wider economy, and I am extremely keen to ensure that, in having to make such difficult decisions, we do not lose sight of the fact that we are talking about an important part of not just the nation’s cultural life, but the economy and different economic sectors.

I am making that case very loud and clear in Government. I know that people are listening but, as I have pointed out a number of times now, my colleagues are having to make very difficult decisions on the basis of constrained financial circumstances—and with the additional problem of inflation, which as the committee has heard is, in many parts of the creative sector, running significantly higher than the 10 per cent in the general economy. Indeed, I have been hearing the figure of 30 per cent quite a lot from certain cultural organisations.

Ms Baker is drawing me into an exchange about the Scottish Government’s on-going emergency budget review process. Her point has been made. I have heard it, and I hope that she has heard me say that I am being as vocal, outspoken and constructive as she and the committee would expect me to be during an internal budget process to ensure that we have the best possible settlement in the circumstances to support the cultural sector. Unfortunately, I cannot say more than that.

You were looking at me, convener, when you talked about having to be quick. I feel suitably guided.

My answer to that question is the same as my answer to Ms Baker’s: we are in the middle of a process. Mr Ruskell’s point is well made, and I will take it away and discuss with officials how we can satisfy the need for transparency. As I have often said to the committee, I understand how important that is for you in your work and for us to be able to collegiately make progress in what is a shared endeavour. I will take that away and no doubt, as we emerge from the budget process and there is greater certainty about things, you will have wider questions that we will be able to answer directly. I hope that I can leave that there.

Good morning, convener, and thank you for the opportunity to make some opening remarks.

This evidence session on pre-budget scrutiny is an important part of the normal process for setting annual Scottish budgets, but I think that we all agree that the circumstances that we face today are anything but normal. Our public finances are under huge pressure from soaring inflation—which is at a 40-year high—and the cost of living crisis. Uncertainty has increased with the negative market reaction to the UK Government’s tax announcements two weeks ago.

The combination of the on-going cost of living crisis, high inflation and the forecast recession has increased demand for Government funding. Not surprisingly, the committee has consistently heard that theme from witnesses in the culture sector. The limited cash funding that the Scottish Government can make available for public services is being eroded by rising inflation. Our budget for this year, as you know, is worth about £1.7 billion less than when it was announced in December, with inflation having risen from 4 per cent to 9.9 per cent in the meantime.

Our cash plans in the resource spending review announced little more than four months ago are similarly being eroded by greater inflation. That is a challenge that faces public services in all Government portfolios, but I am acutely conscious of how economic circumstances are affecting the culture sector. Building-based organisations in particular face steeply rising costs. Everyone who works in the sector is rightly concerned about their pay as living costs rise so steeply.

Added to that is the mixed picture of post-Covid recovery in visitor and audience numbers. On the one hand, I hear some positive reports of recovering visitor numbers in museums, galleries and heritage attractions, but, on the other, there is a more tentative picture in relation to audience figures in performing arts and cinema. Most of all, there is the continuing uncertainty, as the rising cost of living undoubtedly means that people are cutting back on leisure spending. What the committee has heard from witnesses is what we are hearing from our discussions with our culture public bodies and the broader sector.

To address those economic challenges, the Scottish Government is making hard choices to prioritise spending through savings that were announced by the Deputy First Minister on 7 September and the emergency budget review that is due later this month. Although none of that is a surprise to the committee, it is worth repeating the context to what will be difficult decisions in the forthcoming 2023-24 budget.

The resource spending review envelope for culture and major events for the next financial year is £172.8 million, which is a cash reduction of £4.2 million, or 2.3 per cent. That does not include the impact of inflation, which shows that there is already a challenge before inflation is factored in and, indeed, before the possible further public spending cuts that are being trailed by UK ministers.

I will continue to argue for the most public funding that we can afford for the culture sector. I am also keen to conclude some work on multiyear funding, even if economic uncertainty means that the figures for later years can be at most only indicative, because I know that multiyear figures would help the sector to plan ahead.

I know that the committee wishes to concentrate on the culture budget in its pre-budget discussions, but I would also be happy to answer any questions on other areas of my portfolio. If there are any questions that I cannot answer today, I will, of course, write to the committee.

Galleries and museums are in a better position to understand trends in visitor attendance and spending, but we know the headline numbers and percentages. To be frank, a lot of that is encouraging and shows that people are visiting, which is one reason why we are committed to free public access.

We hope that people who view evidence sessions such as this will take every opportunity to encourage the public to visit our amazing galleries, museums and public cultural institutions. I will take a stab at answering by saying that discretionary spending reflects how people are feeling about how much money they have in their wallets. Although people might enjoy going to see great works of art, they might be economising on other things—they might be choosing to use the cafes less and to buy less in the amazing, high-quality shops in our galleries and museums. That is my best stab at answering that question, but I have no doubt that those who are in charge of galleries and museums will be looking at all of that.

Notwithstanding that, I take the opportunity to encourage people to be aware that such facilities are still free and are open to the public to attend. They are also warm spaces, which people should consider as we enter the winter months. As we emerge from Covid, we should remind ourselves that we perhaps have not been to visit our galleries and museums for a while so should take the opportunity to do so.

I am sure that those who are charged with making some of these project funding decisions will be looking closely at the evidence that has been given. The committee took evidence from Creative Scotland before I sat in this chair. I am sure that they will be thinking about that, because they will be thinking about it anyway. If I am entirely honest, I think that it will be an eternal question. We want new and innovative projects, do we not? We want to learn the best from elsewhere and we want to try to improve things. There is always an attraction on all our parts, regardless of where we sit politically, to say, “This is a good and new thing, and we need this new thing to help address this shortcoming or this challenge or this opportunity.” At the same time, we have a series of established projects that are supported. There might be a feeling that those are holies of holies that could never be challenged. There is a tension in that, is there not? I do not think that there is a simple answer to this, but we need to be on the ball with that particular dynamic. We need innovation and projects, but we also need to protect that which is good and that which works.

That is one aspect of the challenge, but on the second question of different funding pots, it was always thus, was it not? As well as the Scottish Government and Government agencies that are charged with supporting projects, there are other places that provide funds for cultural projects. I am thinking of, say, the UK Government in some cases; in the past, we had the European Union; and beyond that there are different national and international pots.

Another dimension that is worthy of consideration is the amount of time that organisations have to spend on trying to identify where they can get funding from. One has to be of a certain size to do that sort of thing efficiently and effectively and to have the expertise to draw down those funds. I am not being critical here—it is just an eternal observation and a statement of fact.

Something that I would be concerned about if it were so would be people not knowing where to turn in order to draw down funds. That is as relevant in the public sector as it is for Government and other organisations. After all, there are some very important funding sources beyond Government; I can think of, for example, the Heritage Lottery Fund and, indeed, the Postcode Lottery, which, incidentally, is headquartered in Edinburgh and gives a lot of support to a lot of small and medium-sized community and cultural projects.

I know that there was a lot in that, but what I will say is that if the committee has evidence that people are finding it difficult to know where to turn—which is potential criticism number 1—or, secondly, that they are not being treated fairly when they seek support, I have to say that I would like to understand that better. The context of all this is constrained budgets, which are an issue affecting not just Government but other funding organisations in both the private and public sectors. I should also mention philanthropy, because there are cases of people who have been extraordinarily generous in supporting culture and the arts but whose spending has now been constrained.

There is something in all of that. I take upon myself the fact that I have some responsibility with regard to my convening power—if I can call it that—to be able to help in different areas of funding, whether it be national or local government, philanthropy or the private sector. I am doing some of that work already, but maybe there is more that I can do. I am open to encouragement, Mr Cameron.

Forgive me for not having mentioned it, but there are cross-party groups in Parliament that do a lot of work in parallel with the formal subject committees. Unfortunately, I am not able to go to as many of those meetings as I might want to, but I would hugely welcome feedback from them. If you are learning important lessons and meeting important people who you feel we need to hear more from or understand better, please get in touch. We are keen to be as informed as we can be.

I am alive to the points that you are making. As, I think, committee members know, the challenges of Covid led to an unsurpassed level of dialogue between the Government, Creative Scotland and the creative sector, because we were dealing with an existential crisis across the entire sector. We were in the fortunate position of having funds to dispense in that emergency situation. The Government tried its best, as did Creative Scotland, to get funding to where it was needed through the different phases of the intense Covid period in order to deal with the specific challenges that Covid posed to the cultural sector. We were being very well advised as to what those challenges were.

My first observation is that having the funding to distribute undoubtedly made the situation a lot easier than it would have been had funding not been in place. Secondly, it is worth noting that when one is dispensing such a significant level of funds, there is always a risk that fraudulent applications for financial support could be made. We know that that happened with personal protective equipment and the like during the Covid period, but I am not aware of any significant parallel development in culture funding. In significant part, that is because of the experience of Creative Scotland as a funding organisation, for which it deserves recognition: we should not take that for granted.

The convener made the important point that we are talking about public money. People need to have confidence in the culture sector, the public agency that supports it, the Government and the Parliament, which oversees that funding and makes strategic decisions around it. We should never take that for granted. Creative Scotland deserves to be recognised for having managed the funding process.

I will move on to the substantive point about cultural organisations after the most extreme phase of Covid. I completely understand that it is a tremendous challenge that there is not now the amount of money going out the door to support organisations that there was during the height of the Covid period. People are trying to balance their books, recover from Covid and recover visitor numbers and the numbers of people who pay to come through their doors in theatres, cinemas or similar venues. I hear the warning that things are going to get more difficult, in many respects. This summer, festivals across Scotland have been very successful, in comparative terms. There is a feeling, however, that next year will be more difficult—not least because of inflation, among other reasons.

I will address the specific point: I will take it away and will be happy to write to the committee on how organisations are advised in relation to funds that they hold, and on how they are advised on funding decisions that might be made on the basis of their having £X in reserve meaning that funders are prepared to give only £Y in public funding. Organisations might have made difficult decisions about having reserve funding in place so that they can keep their heads above water, because they do not know what the situation will be like in three, six or 12 months. I am content to go away and look at the matter so that I can try to get the best guidance, because I want organisations to feel that they are being treated fairly.

However, again it behoves me to say that we are talking about dispensing taxpayers’ resource during a cost crisis. Therefore, decisions have to be made on the basis of who has funds—full stop. All I am trying to say is that it is not easy. I want decisions to be as sympathetic as they can be, but I also want people to be advised as best they can be advised. There is an additional dimension to that. I have had conversations with people in the culture sector who are looking at next year’s festivals or the following year’s tour, for example. They are having to make medium-term and longer-term financial plans, and it is extraordinarily difficult for them to work out how things will add up.

We will be as helpful as we can be. Unfortunately, I do not have the magic wand that can answer all the queries, but I want things to be fair and I want people to be well advised. I do not want people to feel that they are being penalised for running effective organisations or that they are hard done by compared with others.

Incidentally, I should say that, although we look closely at the public evidence sessions and the evidence that the committee receives, if you have information about circumstances that I and my officials might not know about—any information that might not have been said in public or that you have picked up during visits—please let us know. In that way, we can be as well informed as possible.