Seòmar agus comataidhean

Thank you. I thank all our witnesses. We have run over time, but we will have a break until 11.15.

We now turn to our second panel of witnesses on Scotland’s public finances and the impact of Covid-19. We are joined by David Eiser, senior knowledge exchange fellow, Fraser of Allander Institute; Susan Murray, director, David Hume Institute; and Ray Perman, fellow, Royal Society of Edinburgh. I intend to allow up to 90 minutes for this session. Members have received written submissions from each of our witnesses. I welcome everyone to the meeting—I give the witnesses a particularly warm welcome for coming here in person, which the committee greatly appreciates.

I start by asking something of the David Hume Institute. Under item 3 in its submission, it says:

“At a time of multiple challenges and tight public finances, hard choices are almost certainly going to involve choosing to stop spending money on services or initiatives that are achieving public good, and are valued by their recipients or stakeholders in order to start or increase spending on other areas that are now judged a higher priority.”

With many of the witnesses we have heard from, it has been like drawing teeth to get them to say where they would disinvest. Everyone has come to the committee and said, “We require additional funding in our areas.” We have explained that we might have only a 2 per cent real-terms increase in the budget, but all our witnesses appear to feel that that should be specifically targeted at their sector.

I hope that Susan Murray and other colleagues will help by contributing some ideas as to where disinvestment can take place, because, if we are going to spend money more effectively and deliver better outcomes, that will need to happen. Do you have any examples that you can share with the committee?

Indeed—I suppose so. However, it would affect some people disproportionately. If they then had to invest elsewhere, they might not necessarily gain proportionately.

What is David Eiser’s view on the matter? Where should we look to disinvest if we are going to spend or invest—however you want to phrase it—in order to have more effective outcomes for Scotland?

I wonder if we can hear briefly from Ray Perman and Susan Murray on this question. After all, it is fundamental to what we are trying to achieve.

Good morning and welcome to the fourth meeting in 2021 of the Finance and Public Administration Committee.

Agenda item 1 is to invite Ross Greer to declare any relevant interests.

I thought that you wanted Alan Russell to respond, too.

There is another way to look at that. To encourage innovation, we could say that, if local authorities have introduced such innovations, that should be looked at specifically in their settlement. We all know that there is a funding formula, but should there be some recognition of innovation? We would not want a situation in which a council that has decided to spend something on a project will necessarily get that fully funded by the national Government, or councils could just spend money on whatever they wanted and the national Government would be left with the bill. However, is there a mechanism by which innovation could perhaps be more recognised? Should councils that are being more innovative and bringing in new ideas perhaps be rewarded for that in some way?

My final question is on an issue that arose after you had made your submissions, although Ray Perman touched on it earlier. How will the new national insurance increases impact on the Scottish budget and the economy?

We have touched on demography. Last night, I was reading this week’s edition of The Economist. In the Caucasian state of Georgia, there was a particular concern about the fertility rate, which had fallen to 1.6 per woman. The Orthodox patriarch said that he would personally come round and baptise anyone who had a third child and, within a year, the fertility rate had gone up to 2.1. Perhaps someone should give Jim Wallace, the Moderator of the General Assembly of the Church of Scotland, a call—that might help.

Next week, we will take evidence from the Deputy First Minister on the national performance framework. Scotland was one of the first places to introduce such a framework and we all accept that it is a good tool, but is it doing what it says on the tin? I put the question to Susan Murray first, because the issue was included in her paper. Is the NPF influencing Government policy in the way that it should by focusing on outcomes?

I have a couple of issues to wind up on. First, referring to paragraph 13 of the COSLA-CIPFA submission, which is headed “Place-based inclusive approaches are needed”, you say:

“Councils will look to use well established place-based approaches ... bringing buildings back into use in town centres and improving the wider public realm, to supporting and working with communities to make places more liveable.”

Does COSLA believe that the Scottish Government should introduce compulsory sales orders in this parliamentary session?