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As I have said, the intention is to have HMP Highland as the first net zero prison. Deciding to develop a district heating system for an individual institution is probably outwith the justice portfolio. It would require the cross-Government working with the Cabinet Secretary for Net Zero, Energy and Transport that I think you are hinting at. Your point is perhaps whether—especially in relation to Glasgow, which has our largest prison population—having such a system could produce wider benefits. We are still in the formative stages of the process on Barlinnie. Perhaps Donald McGillivray or Neil Rennick will want to say more about that.

There will be substantial calls on the Government to do many things. Those calls will come not least from your party, which will demand, as ever, that health consequentials are passed directly to health and that, as they say, we do not pass go. I concede that it is the Government’s priority to ensure that health consequentials go to health services.

You mentioned the sum of £1.5 billion over two years. I have just mentioned the additional cost of £1.7 billion that we face this year due to the erosion of value caused by inflation. Therefore, there is no question of that money being a bonanza that we can expect to resolve the pressures in our portfolios. However, I will fight my corner for the justice budget and for the police, firefighters, prisons and others. I will fight my corner for the court service, where we are doing tremendous work, with the astonishing reduction in the backlog of summary cases of 12,000 in one year. Of course I will do that.

You used the word “shocking”, and I think that the budget that we have had from Westminster is certainly shocking. Many Government departments, as well as Scotland and Wales, have said that the pressures that we are facing this year are extraordinary. I am sure that you know the situation: the Scottish Government cannot change taxes during the year, and we cannot increase borrowing to cover pay. To have a £1.7 billion diminution in our budget and for that not to be recognised is shocking, I think, and that is the source of many of the pressures that we currently face. My job is to ensure that justice is well served by the budget process and that we maintain and improve the public services that we have under the justice portfolio.

The approach to pay rises will, necessarily, have to take inflation into account. As you will know, the UK Government has projected the start of a significant fall in inflation during the middle of next year, if memory serves me correctly. Inevitably, the approach to pay rises will take into account the real cost of living.

Briefly, there is of course a correlation between the impact of pay rises, our ability to pay for them and the overall budget. I have mentioned that, in the justice portfolio, around 70 per cent of our costs are people costs—whether directly in salaries, in pensions or in other costs. Those costs are significant, and they squeeze out the opportunity to do other things.

When it comes to the pay settlement that we reached this year—I imagine that the same process will inform how we approach further pay rounds—we recognise that police officers, prison officers and firefighters face increases in the cost of living, including in energy costs. We are trying our best to reflect that within the budget.

Although I neither recognise nor agree with your figures, you mentioned a correlation between paying more for pay and a squeeze on other things. This year, as I have mentioned, there has been £700 million of additional pressure so far, but that has not caused the reduction in police officers. That reduction was caused by the fact that Tulliallan was being used for the 26th United Nations climate change conference of the parties—COP26—and because of the restrictions of Covid. However, Tulliallan has now gone back up to its regular intakes of 300.

However, there is no doubt that there is such a correlation. I do not think that any Government has projected what it will do on pay over the next three or four years. I also make the perhaps obvious point that a 5 per cent pay increase this year does not disappear next year but is built on, so the pressures will grow.

It is our job to make sure that the number of officers in the police service establishment does not fall below the level that we think—and, more importantly, that the chief constable thinks—is necessary to do the job.

We have seen a substantial reduction in that over time as a result of Covid restrictions and a lessening of the need to appear in person for many of those practices. I have had extensive discussions with Wendy Sinclair-Gieben, and it is evident that the biggest problem that GEOAmey has is staffing. We have had a couple of suggestions about how it might best address that situation. The SPS is working closely with it to try to deliver a prisoner transport system that supports the justice system and protects the public. It is developing quite creative modelling to lessen the impact of the staffing issues, including scheduled weekly meetings to develop short, medium and long-term plans to improve the contractual delivery.

I might ask Neil Rennick to confirm the length of the contract. However, as per the contract, performance levels are monitored by the SPS, and any service failures are managed within the terms of the contract. We are aware that GEOAmey is about 70 staff short of the requirements needed to meet its prisoner escorting contractual agreement. Therefore, those things must be managed.

To be perfectly clear, we do not think that GEOAmey is at it. We know about the pressures with regard to getting staff, and we are trying to work our way through that issue.

Neil, do you know how long the contract is?

The SPS has been engaged in discussions with the main subcontractor, Serco. That is really around the transfer being effected in a way that looks after the interests of the staff while looking after the safety of prisoners, too. The SPS is embarked on that process.

The member rightly mentions the costs of inflation. On the idea that we would somehow avoid those costs of inflation were we to go back to or maintain the private contractor, I do not know any private contractor that would want to bid for a contract that did not recognise the costs of inflation. I referred to that in the exchange that I had with Pauline McNeill on Addiewell.

You should bear it in mind that the Kilmarnock iteration of PFI came many years—nine years, I think—before the deal was done for Addiewell, by which time contractors were keen to ensure that the inflation costs were part of the bid that they made. I am not sure that there would be the savings that have been hinted at by trying to ignore inflation. In any event, as regards this Government’s position, we believe that prisons should be in the public sector.

We are not proposing a cut, although you could argue that that might end up being the case, depending on whether there is a real-terms increase. The difference between real terms, which accounts for inflation, and flat terms is an important distinction to make. However, there are some flexibilities between resource and capital that we are examining closely. One example is body-worn cameras. There is obviously a capital cost to those but there is also a substantial revenue cost and we are looking to see what we can do to maximise the capital contribution.

It seems to me that, especially after the early part of the previous decade, between 2010 and 2016—I know that that is going back in history somewhat—we regularly had better capital allocations than resource allocations from the UK Government. We also had fairly frequent allocations of financial transactions, which can be applied only in limited ways. However, now, there is a much greater tightening of the grip on capital provision.

I make the point that the indicative capital funding envelope has been maintained from the spending review that was published in February last year. That maintains essential capital funding for the core justice services. That will always be a priority over new initiatives. It includes core services such as estates, technology and fleet. We have also confirmed more than £500 million of capital for our prisons, including the modernisation of the prison estate, which has been on-going for some time.

It is true to say that the spending power of that capital budget has been eroded by inflation and now pays for significantly less as the cost of raw materials increases. However, we remain committed to substantial capital investment in the justice system. We have to keep it under review and how that is done will be part of our discussion and negotiation with the different parts of the portfolio.

We want to see how the existing ones are working first of all. They are absolutely ground breaking—nowhere else has done anything like that—so it is only right that we ensure that they are having the intended effects before we move on to a further roll-out. That roll-out is intended, but it will be based on our experience with the two units that have been up and running.

After I have made a couple of comments, I will ask Donald McGillivray to come in. This project is a bit like high-speed rail—it has been going on for many years. As I said, I was involved in a joint police board on the roll-out of Airwave, which was complicated. I have many concerns over this project, which I have registered with the UK Government, and the Welsh Government has also registered concerns. The budget changes over time, and the spend does not match the profile as we would expect. That is the basic underlying situation, but Don is very heavily involved in that, which I am sure he enjoys.

As the committee will know, earlier this month, the Deputy First Minister, in his statement on the emergency budget review, set out clearly the nature of the financial challenge that we face. The drivers of that challenge are well known; they include Brexit, the on-going impact of the Covid-19 pandemic, rising energy prices and high rates of inflation, which is, I think, currently at a 41-year high. Those pressures are impacting on households and on our vital public services.

Many of those pressures were evident when the resource spending review and the update to the capital spending review were published in May, and they have become even more pronounced in the subsequent months. Inflation means that our budget has already fallen by 10 per cent in real terms between this year and last year, and the announcements in the United Kingdom autumn statement do very little to address the damage that that has done to the Scottish budget.

Despite those pressures, and the necessary realignment of our spending plans, we have, this year, worked to continue to support front-line justice services. That includes support for the on-going process of recovery from the Covid-19 pandemic, with the number of outstanding trials reduced by more than 10,000 between January and September this year. In fact, the number has been reduced even further since then, by around 12,000, to around 31,000.

We are building on the success of the new digital approaches that were developed during the pandemic. For example, the new digital evidence-sharing capability will enable evidence to be shared more efficiently and swiftly, thereby helping cases to resolve earlier. We have continued to modernise the prison estate, with the opening of two new innovative community custody units for women in Glasgow and Dundee, which reflects our commitment to trauma-informed approaches to rehabilitation.

Crucially, in the context of the cost crisis, we are supporting justice organisations to offer pay settlements that are well above the levels that were projected when our budgets were set at the start of the year. That is significant and challenging for the justice portfolio in particular, given the high proportion of our portfolio spending—over 70 per cent—that is committed to staffing costs.

The resource spending review numbers for next year are not final budget allocations; those will be set out by the Deputy First Minister next month. However, it would not be honest or beneficial to our justice services to pretend that exceptionally difficult choices will not have to be made across all portfolios, including justice, in the final budget allocations.

The funding that the UK Government has outlined over the coming two years falls well short of the combined impact of Covid recovery, energy costs and inflation, so we will inevitably need to match our plans with the available resources. However, as far as possible, my aims for the budget process remain those that were set out in “The Vision for Justice in Scotland” document, which was published earlier this year.

Those aims are as follows. We will continue the progress of Covid recovery in our courts, in particular for the most serious cases in our solemn courts. We will ensure that there are trauma-informed approaches for victims and witnesses, drawing on innovative recommendations such as those that Lady Dorrian set out. We will support our police and fire services to continue to deliver vital public services as they modernise and adapt to changing demands. We will support the work of our legal professional and third sector services. We will invest in our prisons to support rehabilitation as well as effective community justice services, including alternatives to custodial sentences and remand.

Members of the committee will recognise, however, that we will need to respond to those priorities within an increasingly tight financial context that is likely to last for an extended period.

With that, I am happy to answer any questions that the committee has as part of its pre-budget scrutiny, and to consider those issues in the on-going budget process.

It will be different in different parts of the portfolio. I mentioned in my opening statement some of the digital innovations that we have developed and are looking to expand on. However, we will necessarily have to look to further public sector reform in order to try to fit in with those financial constraints that I have mentioned. I have had discussions with the chief constable of Police Scotland as recently as yesterday, and with other services, and I know that they are actively considering things that may help with public sector reform. Those things would be necessary anyway.

The experience of fire and police in particular is an excellent example of public sector reform. That was a difficult decision to take, around 10 years ago, and there were difficult periods afterwards; I am thinking about the establishment of the joint police and fire boards. In my view, however, having served on a joint police committee in a local authority, the level of scrutiny of the police is now far greater than ever before. Those services have already established substantial public sector reform, but there will be more to come, and they are actively considering that, perhaps in relation to how the three blue-light services can work more closely together, not least given the findings of the Grenfell inquiry. That will be happening.