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We are investing in wealth-creating areas, as we can see from our very strong performance. I will correct this if I am wrong, but I think that, according to a survey, business confidence was up by about 13 per cent. There is a strong underlying base in the Scottish economy. Are there issues? Yes, there certainly are. We need to ensure that the skills gap is addressed and that our skills match the needs of our economy, but some very strong performance underlies some of that.

On college budgets, the budget delivers an uplift in the resource funding that is available to the college and university sectors. I think that there is a £13 million uplift for further education and that the budget for higher education is also increasing by £13 million. Therefore, there is an uplift in the resource budget for colleges.

The decrease in college capital—if you take the two together, that is where the figure is coming from—reflects the profile of spend on significant campus investments that are coming to an end, such as the Dunfermline campus. College capital has peaked, but there is a more than £13 million—2.1 per cent—uplift in the resource budget.

I absolutely agree that there is a need to better join up the work of Skills Development Scotland and colleges and to ensure that the offer from colleges and the SDS meets the needs of the economy and employers. The Withers review was very much in that space, regarding the need for the sector to be far more joined up and more sharply focused, which is the Government’s ambition. I am happy to provide further information about some of the on-going work in that space if that would be helpful to the committee.

What period are you talking about when you refer to the uplift in inflation?

The only general point that I would make is that, before the reset of budgets, the public sector per se, including our institutions and universities, was constrained by the fact that the Scottish Government’s budgets were constrained and were not keeping pace with inflation. The point of the Chancellor of the Exchequer’s budget reset was to recognise that. If we include in that figure the lack of ability to keep pace with inflation, we could say that about a range of services, because the money was simply not there. Our budgets were not keeping pace with inflation, which is why the reset has been so important—and welcome, I have to say.

However, if your question is whether universities are getting a fair share of the reset, I will come back to the committee on that point. I am absolutely happy to answer that question.

We absolutely must ensure that all the component parts that make up university funding and are the bedrock of the sustainability of the HE sector are looked at. The tuition fee issue is one of those, but the issues of international students, research and other costs have, unfortunately, all come along at the same time and they are putting pressure on the university sector. We will continue to work with the sector. The universities are not all in the same position, and some have more resilience than others, as some current issues have shown to be the case.

You make a fair point, but there are other major issues impacting on the university sector.

I am sorry that you feel that about the response. It is very important to try to create some level of cross-party agreement on principles—it may not be on the detail—because doing nothing is not an option. Katie Hagmann from the Convention of Scottish Local Authorities has been leading on that and, as I understand it, she has had cross-party meetings on behalf of COSLA that will help to scope out where there may be a landing space for agreement.

I am keen to set out between now and the beginning of next year, in advance of the 2026 election, where there may be cross-party agreement in order to allow whatever Administration there is after May next year to take action on more fundamental reform of council tax. That may be more difficult in the run-up to an election, but I think that we all agree that there is inherent unfairness in council tax and that it is very limited in its scope. If we were to agree some principles, it might pave the way for more detailed discussions about reforms that could command a majority in Parliament. There is no point in going down an avenue that will never command a majority in Parliament—that would be a waste of everyone’s time—but I think that there will be principles that we can agree on.

Katie Hagmann has been leading on that, and she has the Government’s support. I am keen to engage directly with her after the budget has been concluded to build on the discussions that have taken place and the work that she has done.

It is hard to see how there will be progress this side of the election. If there was agreement on some principles that could work their way into manifestos, for example, or areas where there is more consensus on reform, that would be a good thing to break through some of the inertia and the lack of agreement. However, there is not going to be time for practical work to drive that forward, beyond the work that is already in train, which you mentioned earlier. It is about seeing whether there is scope for cross-party consensus on some change that could hit the ground running in the early part of the next session.

We have had no official confirmation from the Treasury. I am waiting for a reply to my letter on the issue, in which I put forward the case that the full cost for the public sector is more than £500 million. If we include the areas that you mentioned—social care, universities and so on—that takes the figure up to more than £700 million. The figure that has been talked about in the public domain, which is based on information from sources, is between £300 million and £380 million. However, at the moment, I have not had it confirmed that we are getting a particular figure. Therefore, I am still pursuing the Treasury on that.

When we get to a final position, if it is only a Barnett share, that will not be acceptable, for all the reasons that I have set out previously. It would not recognise the investment that we have made in the public sector, and I do not think that we should be penalised for that. Once we get to a final figure, I will want to ensure a fair allocation of that. Clearly, we have not just the health, police and fire services but the Scottish Government and local government. Local government’s analysis was that the figure for it is about £265 million, so you can see that the gap is a real issue.

There is a degree of resilience in the budget allocations to local government and the portfolios. That is helpful, but we should not underestimate the impact. If there is a shortfall of circa £200 million or £300 million, that will represent an opportunity cost, because the money will have to be found and it will not be possible to spend it on other things in the portfolios.

The issue is far from resolved. We have a live negotiation with the Treasury, and we have had no formal response to say, “This is it—end of.”

I will set out as much detail as we are able to at that stage. Artificial intelligence and digital technology offer huge opportunities, and I want to say something about that in the plan. Work is already going on around the use of digital. In the NHS, there is the work on the digital front door, which is starting with NHS Lanarkshire. Digital is also being used in some of the capabilities of our public bodies. For example, the smart use of digital has already avoided the requirement for massive recruitment exercises. I will set out as much detail as I can at that point.

It should not be ruled out for ever and a day. It is there as an option, but it would very much depend on the circumstances that you have laid out. However, for the foreseeable future, it is definitely not the right time.

I will bring in my officials to respond to that question.