Seòmar agus comataidhean

Thank you, convener. I will make some brief opening remarks.

I am grateful to the committee for the opportunity to discuss a number of matters that relate to the impact of the 2023-24 budget with regard to the Scottish Government’s Covid recovery strategy and the Covid-19 strategic framework—as well as any other issues that are on the minds of committee members, of course.

The Scottish Government’s 2023-24 budget has been developed in the most turbulent economic and fiscal context that most people can remember. The impacts of the pandemic, coupled with Russia’s continued illegal invasion of Ukraine, have created a disruptive set of financial and economic challenges that every Government must address: energy and fuel prices are surging and inflation has reached a 40-year high. Furthermore, the UK Government is responsible for additional uncertainty and instability: Brexit has impacted our labour supply and undermined trade with our nearest neighbours. These are incredibly difficult times in which to manage public finances, and the constraints of devolution mean that the Scottish Government cannot borrow to meet additional costs that arise during the financial year.

In that challenging context, the 2023-24 budget focuses on reducing child poverty, supporting a just transition to a net zero economy and delivering fiscally sustainable person-centred public services. Those priorities are aligned with the principles of the Scottish Government’s Covid recovery strategy, which focuses on addressing systemic inequalities and supporting those who were most disproportionately affected during the pandemic. Since the Covid recovery strategy was published, the worsening cost crisis has made it even more critical for the Scottish Government to focus its efforts on supporting those most in need.

The Government has consistently taken decisive action to prioritise spending where it is most needed, including in the emergency budget review. The 2023-24 budget demonstrates the Scottish Government’s continued commitment to prioritising those who most need support. For example, we are extending and increasing the Scottish child payment to £25 per child per week, uprating all devolved benefits by 10.1 per cent, widening the warmer homes fuel poverty programme and freezing rail fares until at least March 2023.

In total, the Scottish Government has allocated around £3 billion this financial year to contribute towards mitigating the increased costs crisis. More than £1 billion of that support is available only in Scotland, with the remainder being more generous than that provided elsewhere in the UK.

With regard to the on-going response to Covid-19, the Scottish Government published a revised strategic framework in February 2022 that sets out our long-term approach to managing Covid-19 and its associated harms.

The Scottish Government remains alert to the threat that potential new variants of Covid-19 pose, and I welcome the national respiratory surveillance and variants and mutations plans that have been published by Public Health Scotland, which set out the processes that will be undertaken to identify and assess any future risk. We are supporting those plans with direct investment of approximately £7.4 million and £3 million respectively, with up to a further £3 million available for waste water surveillance.

The Scottish Government continues to work with partners and is ready to respond to any increase in the threat that the virus poses, whether that comes from waning immunity, a new variant or other factors. In any future response, we will apply careful judgment to ensure that responses are appropriately targeted and the necessary resources prioritised. In my recent letter to the committee, I included further details of funding arrangements for the on-going pandemic response. I will continue to keep the committee updated on in-year changes to the Scottish budget through corporate reporting and in-year budget revisions.

I am happy to answer any questions that the committee might have.

The data that you recorded about the loss of life in relation to Covid is very sobering and demonstrates the importance of taking all necessary measures that are appropriate in the context to protect the population against Covid.

Obviously, the commitment that the Government has given to the vaccination programme has provided significant protection for wider population health in relation to Covid. The vaccination programme that has been set out is targeted at a range of particular groups that have been identified by the Joint Committee on Vaccination and Immunisation. The Scottish Government continues to do what it has always done, which is to follow the clinical advice that is given to us by the JCVI. The Covid vaccination programme is available to a wide variety of groups, including older adults in care homes, people who are over the age of 50, front-line health and social care workers, and those people in the five to 64 age group who are at risk from Covid.

While the vaccination programme is targeted towards those individuals, the uptake varies in different groupings. For example, in older adults in care homes, the uptake in Scotland is 89.3 per cent; among the over-65s, it is 90 per cent; and, among those people who are aged 50 to 64, it is 64.3 per cent. The uptake rate for front-line health and social care workers varies, but the percentage is in the low 50s. Although there is variation, those are generally pretty high rates of uptake of the available vaccination.

In relation to cost, the expenditure on vaccination in the current financial year is expected to be around £170 million. That does not include the cost of the vaccinations; those costs are dealt with as part of the four-nations programme. If we were to opt out of that programme, we would be likely to get a consequential but, for reasons of efficiency and procurement, we have habitually taken part in a four-nations programme on, for example, flu vaccinations. That is the cost of the delivery of that programme in Scotland, and we are planning on a relatively similar amount in the 2023-24 forecasts.

My final point is that we have followed the advice of the Joint Committee on Vaccination and Immunisation this year, and we expect to follow it next year and to fund that accordingly. We await further advice from the JCVI about its review of the appropriate steps to take for a vaccination programme for the next year. We anticipate that the current programme will end at the end of March.

We are working on the assumption that a further booster programme will be implemented. As I indicated in my answer to the convener, sums of money at about the same level as those that we have had in the budget for this year are predicted to be deployed in the next financial year to support a booster programme. Obviously, if we get advice that the programme is not necessary, that money will not be required, but a prudent assumption at this stage is that there is likely to be a booster programme.

—but it is an appropriate platform. Christine McLaughlin has gone through the information on wider population surveillance, which has developed remarkably in a short space of time and which provides us with significant levels of intelligence. We are monitoring that information carefully for any signs of development and deviance of performance that might raise concerns. We are also plugged into international networks on new variants and we are monitoring those carefully.

There is a level of testing capacity. We have maintained the laboratory at Gartnavel, which, as things stand, has the capacity to process 60,000 tests a week. That is a formidable level of testing capacity. We also have regional PCR testing arrangements in different parts of the country. We have stocks of lateral flow devices that can be deployed should a new variant emerge, along with plans for a new variant, should they be required.

We are following closely the thinking and expertise of the pandemic preparedness committee that is led by Professor Andrew Morris, who has given evidence to the committee, to ensure that we are maintaining an appropriate approach. As I said in an answer to Mr Fraser, a variety of other investments are being made routinely in the budget programme on PPE and other factors.

It is difficult to be precise about consequentials. If my memory serves me correctly, arising from the statement that the Chancellor of the Exchequer gave in November was a consequential for health and social care of between £200 million and £300 million. We have added to that to uplift the budget by about £1 billion.

As Jackie Baillie knows, the UK consequentials do not come with a badge on them, other than a badge of health. We have generally taken the consequentials from health and put them into health and social care. However, they do not come with a badge that says “Covid consequentials” or whatever. Uplifts in the English departments give rise to a Covid consequential for the Scottish Government. We have increased that by the contributions that we have made.

No, I do not think that we have. A lot of reform has been undertaken. There is a bit of commentary. When I look at all the magazine articles about the Christie commission, I do not think that people have been looking closely at what has been going on in public services and the focus on early intervention. I refer to the steps made in our education system or health service on early intervention. Of course there is more that could be done, but a lot has been achieved. In essence, we are trying to avoid crisis and acute interventions because the more of them that we have, the more difficult are the challenges that we face.

A lot of the evidence about presentations at accident and emergency departments in Scotland indicates that the people who are arriving at accident and emergency are much more ill and much more frail than would have been the case in the past. That is the result of a combination of the extension of longevity in our society, the ability to support people at home in the fashion that we have been able to and the success of some of the preventative and early intervention measures. However, if we have a population that has—I will try to word this as carefully as I can—more older people in it than it used to have, the pressures of frailty and old age will inevitably be more acutely felt in our health service than was the case in the past. That is why I say that demand requires efficiency in the health service.

May I make a final point? The cost of the vaccine is handled through a four-nations agreement with the UK Government outwith all the sums that I have just talked about. In theory, if we were to say that we were not part of a four-nations arrangement, we would get a consequential for that. However, on a variety of vaccination programmes including those for flu and Covid, we have generally taken the view that there are logistical and procurement advantages to being in a four-nations arrangement.

I will sharpen up my language for Mr Mason. My long and detailed text was designed to say that yes, of course, inflationary pressures are putting enormous pressure on the Government’s budget in general and will inevitably put pressure on the Covid recovery strategy.

Because of his membership of Finance and Public Administration Committee, and his assiduous following of financial matters in Parliament, Mr Mason will be pretty familiar with my current worry list. At the top of my worry list is the fact that there has been no restatement of the budget available to the Scottish Government during 2022-23 and no additional consequential funding to deal with inflation since the start of 2022-23. The budget was set when inflation was expected to be 2 per cent; inflation was at 10.5 per cent yesterday, and there has been no consequential funding to assist us. The Government has also had to wrestle with legitimate pay claims from public sector workers.

As a consequence, I have had to take some very difficult decisions to reduce public expenditure to try to balance the Government’s budget. At the same time, I have made provision for the Government to increase the value of the Scottish child payment to £25 a week, which is a direct investment to support families struggling in the cost crisis and which I know will be of benefit to many of Mr Mason’s constituents.

After all that, Mr Mason will be familiar with the fact that I am still wrestling with a predicted overspend of between £200 million and £500 million on the Government’s resource budget in this financial year. It is unprecedented for a finance minister to be wrestling with a problem of that magnitude so late in the financial year.

The pace of development is perhaps a challenge, but I would counter that by saying that the fact that we avoided local authority industrial action significantly across the country helped to maintain the impetus around the delivery of the Covid recovery strategy. The fact that we have, so far, avoided industrial action in the health service is a welcome consequence of the Government taking on the additional financial strain of wrestling with the public sector pay claims, which we have satisfactorily addressed.

Precisely, and I have made them, and I have made my point about tax.

I can demonstrate it with outturn data, which gives me confidence about the future data.