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I think that colleagues will want to explore that a little further, but I will move on.

The UK Government’s shared prosperity fund is intended to replace, from April, the European Union structural funds that have been lost as a result of Brexit. However, the Scottish Government has yet to receive any detail of how much funding will be allocated to Scotland, and the reality is that the Scottish Government has not been consulted and nor have Scottish ministers had any role in investment proposals or decisions on matters that are devolved to the Scottish Parliament. New guidance on the shared prosperity fund offers no evidence of respecting devolution or acknowledging the Scottish Government as an equal partner. Why?

When the levelling up fund was launched, which was less than a year ago, local authorities were given a very short window in which to prepare bids. I know that there was a big panic in my area to get the bid together. There was a meeting that involved the chief executive, me and the MP—who happens to be my wife, so there was not really any difficulty in getting co-operation. Although the local authority has a different political tint, we all agreed absolutely on the priority for our area, and we secured significant funding, for which we are very grateful. However, what would have happened if the MP had taken a completely different view from mine and that of the local authority, for example? There is a suspicion, given the documents relating to the process, that MPs in effect have a veto. I want you to address that issue specifically.

If you give local authorities only three or four months to prepare bids, it makes things very difficult for some smaller authorities. I know that they can share resources across boundaries, but sometimes they might want to invest only in their own area. They might not have the necessary in-house capacity, which will put them at a disadvantage. Smaller and poorer authorities could struggle in such circumstances. Did you really, in all sincerity, believe that the timescale that was given for the first allocation of the levelling up funding was adequate to ensure that the best possible bids were put together? You might want to rethink that and make more time available in future.

I have spoken to the chief executive since the award was made last October, and he has said that, even though four months have elapsed, there is no money yet. There are a number of hoops to jump through, including a final business case. One of the issues with the funding is the amount of bureaucracy, which is ironic given that the whole purpose is to try to minimise that.

I realise that that was a fairly convoluted question, secretary of state.

Okay. I want to move on to another subject that we have touched on a wee bit. The levelling up funding white paper explains that the UK Government is to embark on

“a process of sustained and systematic engagement and consultation with a wide range of stakeholders, including devolved administrations, on the White Paper.”

It states:

“We will be setting out further detail on a number of these policy commitments in future publications. In addition, we will introduce legislation to Parliament to underpin in statute the changes fundamental to levelling up, alongside wider planning measures.”

We touched on Audit Scotland. In the legislation, will Audit Scotland have a formal role in looking at how effectively funds are spent in Scotland?

We are all pussycats up here, you know.

I thank you formally for coming along in person, which is really important to the committee. We really appreciate people making the effort to do that. I know that you could have spoken to us virtually, but that would not have had the same impact and we would not have been able to scrutinise quite as effectively. The committee has an important role to play in scrutiny, and we look forward to working with you and your colleagues in the months and years ahead. Thank you very much.

I will start and colleagues will come in subsequently.

United Kingdom ministers and the Conservative manifesto pledged to provide a fair and equal share of funding that fully replaces EU support. In Scotland, that would amount to around £183 million a year. However, Westminster’s Treasury Committee, which is, as you know, chaired by Mel Stride, a Conservative MP, published a report on 27 January suggesting that the UK shared prosperity fund up to 2024-25 will suffer a 40 per cent reduction compared with the amount of funding that the UK received a year from EU structural funds from 2014 to 2020. Will you comment on those figures and on the steps that will be taken to ensure that the manifesto pledge is honoured?

Thank you for that. I will now open the meeting to colleagues around the table. The first to ask questions will be Liz Smith, followed by Daniel Johnson.

Good morning. In your letter to me of 29 January 2022, you said that the £120 million was:

“only possible following an update in recent days from the UK Treasury regarding our 2021-22 funding”

and that

“this £120 million is not being allocated in 2021-22”.

You also said:

“I appreciate this contingency on the UK fiscal cycle is challenging for scrutiny of the Scottish Budget, and would reiterate that it is no less challenging for the Scottish Government’s own financial and policy planning.”

Will you confirm that it is new money?

Michelle Thomson wants to come in.

I will now open out the session to colleagues.

I would be delighted by that. That is a very helpful suggestion.