Seòmar agus comataidhean

If you look at the scope of the bills that Parliament has passed, you will see that there was no available alternative. In many ways, the decision was to not continue to wait until an appropriate bill came along but to make sure that we lived up to the commitment that we had made in court.

As I said in my previous answer, the definition of women is based on what is in the Equality Act 2010 and the Gender Recognition Act 2004. That is the legislative basis of the definition, which we will refer to for the workings of the act.

Thank you, convener, and good morning.

The budget-setting process has been challenging, given the backdrop of continued austerity at Westminster and catastrophic cuts to Scotland’s block grant.? Our Barnett funding, which is driven by UK spending choices, has fallen by 1.2 per cent in real terms since the 2022-23 budget was presented.?? The UK Government did not inflation-proof its capital budget, which has resulted in an almost 10 per cent real-terms fall in our UK capital funding over the medium term. As a result, this Government has had to take some difficult decisions, but I am confident that we have prioritised our resources to deliver on our three missions of equality, opportunity and community.

At the heart of this budget is the social contract between the Scottish Government and the people of Scotland, in which people’s tax contribution is based on their ability to pay and strong public services are understood as enabling a strong society and a growing economy. Those services include free prescriptions, free access to higher education, the baby box and the Scottish child payment.

That is why, in the coming year, the draft budget allocates more than £3 billion to policies to tackle poverty and to protect people, as far as possible, during the on-going cost of living crisis.?? Those policies include supporting households by providing 1,140 hours of funded childcare for all three and four-year-olds and for eligible two-year-olds; providing free bus travel for more than 2 million people; and offering free school meals to all children in primaries 1 to 5, as well as to eligible children in other school years.

We continue to build a Scottish social security system that has dignity, fairness and respect at its heart. In line with Scottish Fiscal Commission forecasts, we are investing a record £6.3 billion for benefits expenditure in 2024-25, providing support to more than 1.2 million people.? That money will go directly to those who need it most. We are investing just over £1 billion more than in 2023-24 and are supporting disabled people, supporting older people to heat their homes in winter and helping low-income families with their living costs. That investment is £1.1 billion more than the level of funding forecast to be received from the UK Government through the social security block grant adjustments.

We are also increasing our unique benefit, the Scottish child payment, in line with inflation, to £26.70 a week, giving more support to the more than 329,000 under-16s who receive it. That investment continues to underline our commitment to do everything within the scope of our powers and budget to be relentless in our focus on meeting our statutory child poverty targets.

I am pleased to announce that, alongside that significant investment, there will be additional funding this financial year of more than £0.5 million for local projects to tackle poverty and inequality. In 2023-24, our cash first fund and child poverty practice accelerator fund will support a total of 17 projects across the country to, respectively, improve flexible local access to cash in a crisis and develop new approaches to tackling child poverty. The Scottish Government’s draft budget for 2024-25 will enable those partnerships to continue providing vital evidence that can help to shape future policy and practice.

In housing, inflationary pressures, the impacts of Brexit and wider market conditions have combined to trigger various issues, including rising construction costs and workforce challenges. The housing sector has done incredible work to deliver homes in those circumstances, and we continue to work with partners to mitigate the impacts. One of the most difficult choices that we have taken is to reduce funding for affordable housing. However, I can confirm that more £555 million will be made available in 2024-25, despite the failure of the UK Government to inflation-proof the capital budget.

We have also maintained our homelessness and housing support resource budget at broadly similar levels to those in 2023-24, with £35 million allocated to specific action to end homelessness and reduce the number of households living in temporary accommodation.? That is in addition to homelessness funding provided through the local government settlement and an investment in discretionary housing payments of more than £90 million—an increase of more than £6 million—to mitigate the worst impacts of UK Government welfare reform.

We are investing £45 million in Ukrainian resettlement, including £5 million of capital through a Ukraine long-term resettlement fund. Working to the principles of the “A Warm Scots Future” strategy, the Government will continue its partnership with the Convention of Scottish Local Authorities, the Scottish Refugee Council and the volunteer community.

The budget also includes a £41 million investment in the cladding remediation programme.

We are committed to delivering fairer funding for the third sector. Therefore, in 2024-25, we will ensure prompt notification of grant awards to third sector bodies, increasing the number of multiyear awards, and review grant conditions. The agenda recognises the critical role that the third sector plays.

The UK Government’s autumn statement was the worst-case scenario for Scotland following a decade of austerity, a hard Brexit and disastrous economic mismanagement at Westminster. Despite those challenges, I am pleased with the overall package of support in my portfolio and its contribution to the equality mission.

I thank the committee for its pre-budget scrutiny and look forward to taking your questions.

The additional spend does not come from one specific revenue stream, so it would not be correct to draw a line between a particular policy on income tax and how that policy is responsible for funding a commitment. Rather, the entirety of the funding position—what we receive from the UK Government through the block grant and what we choose to raise in taxes—supports ministerial decisions on Government policy priorities.

Some of the changes that have led to the £1 billion of additional spend relate to aspects that impact on the whole of the UK and may therefore be dealt with through block grant adjustments, but not all of them.

I draw the committee’s attention to one aspect that I mentioned in my introductory remarks, which is that the Scottish Government intends to spend £1 billion more than we receive from the UK Government in social security block grant adjustments. That is because the Scottish Government has taken decisions that are unique to Scotland. A lot of that is to do with new benefits—for example, the Scottish child payment—but we also have other social security payments, such as the Scottish welfare fund, discretionary housing payments and the spend above block grant adjustments for social security in areas where there are benefits within the UK. One of the most obvious examples of that is our higher spending on the adult disability payment compared to what is spent on the personal independence payment. I believe that the Scottish Fiscal Commission gave evidence on that and the reasons why it may be the case, but much of it is down to the decisions that the Scottish Government has taken on eligibility and our encouraging people to apply for benefits.

The programme business case covers only resource and capital budgets, and it was published in February 2023. The Scottish Government’s draft budget for 2024-25 includes other costs that are not in the programme business case, one example of which is depreciation. That is why a like-for-like comparison is not straightforward. The programme business case sets out forecasts for resource and capital spending of £99 million, although the budget allocation is actually £162.6 million. The difference in those costs is caused by, for example, Scottish Government pay awards, which have increased staffing costs, and the fact that we now have dedicated funding for transition costs, which were not part of the programme business case.

I can ask Stephen Kerr to go into further detail on that, should the member wish.

It is important that we continue to recognise the pressure on household budgets, which is why, since 2022-23, we have continued to allocate around £3 billion a year to policies that tackle poverty and protect people as much as possible.

Spending in 2022-23 reflected a number of aspects that are no longer included in the budget for this year, because of changing circumstances. For example, in 2022-23, we invested in cost of living payments that were worth £150, which the committee will remember.

However, there has been increased spending on other policies, which has meant that the Scottish Government has continued to invest £3 billion a year. This year, in addition to continuing investment, we are setting aside £144 million in the Scottish budget to reach agreement across local government to deliver the council tax freeze

I will give some examples from the £3 billion spending that is forecast for 2024-25. The largest contributors to that include our continuing commitment on concessionary travel; the council tax reduction scheme; free eye examinations and optical vouchers, which are funded by the national health service; the Scottish child payment; and funding for early learning and childcare. There are many more items. We endeavour to provide as much support as we can, given the relatively fixed budget that the Scottish Government has.

I am certainly happy to provide in writing some more information for the committee on what the budget has been for 2023-24 and what is forecast for 2024-25. In my original answer, I gave Mr Dornan information on some of the larger items in that forecast spending for 2024-25, but we can provide the committee with more detail on, for example, free period products, the baby box, the best start foods scheme—which was mentioned earlier, when the committee considered secondary legislation—and other items. We can provide that in writing, rather than having me go through every row just now, convener.

We have had to make very difficult choices to balance the budget this year. Although the fuel insecurity fund is not committed for 2024-25, the further support that we are providing includes maintained investment in national fuel poverty schemes, warmer homes Scotland and area-based schemes, as well as funding in social security benefits.

Over the course of this parliamentary session, we are allocating at least £1.8 billion to heat and energy efficiency measures in support of people who are least able to pay, and we will continue to provide that. However, many of the powers to make a difference at source remain with the United Kingdom Government. It is not the only one, but one of the most obvious calls that we have made to the UK Government is in relation to the importance of a social tariff, which, unfortunately, the UK Government has chosen not to move forward on.

The modelling estimates that, as a result of Scottish Government policies, 90,000 fewer children will be living in relative or absolute poverty this year. Of that number, 50,000 are connected directly to the Scottish child payment, so we can see the difference that the benefit is making.

In the interests of brevity and of preserving my voice, I point to what I said earlier about the Joseph Rowntree Foundation. If universal credit was done right, and if it was fit for purpose and included an essentials guarantee, we would not have to spend that money on the Scottish child payment, or elsewhere.

Our modelling suggests that the payment is making a difference. I am happy to provide more detail in writing about where we are in relation to our targets, but we can certainly prove that the Scottish child payment and our other anti-poverty measures are making a difference.

However, there is no room for complacency, because child poverty rates in Scotland remain too high. That is something that the Scottish Government, and the UK Government, must be cognisant of, as we make policy decisions.

As I said in my opening remarks, the decisions about the affordable housing supply programme have been some of the most difficult that we have had to undertake. We continue working with partners to mitigate the impacts that have led to the construction supply issues, workforce challenges and increased mortgage costs that are having an impact on the deliverability of affordable housing.

We are still investing £556 million from within the budget in affordable housing next year and are undertaking a great deal of work with partners to increase the delivery of affordable homes, the vast majority of which will still be for social rent. That includes supporting the acquisition of existing properties.

On homelessness, I point to the fact that the level 4 figures for homelessness have remained similar to those of the past financial year, so we have protected that investment. However, although we have a good record in delivering affordable homes, the issues with the affordable housing supply programme continue to be among the most challenging areas of the budget.