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The third sector aspects are very important. The number of organisations that signed the letter from the First Minister and COSLA leader demonstrates the level of concern. The Scottish Government is not in a position to respond as fully as we would like to assist the third sector. We would dearly like to be in a position to do so, but the overall financial constraints that the Government remains under make that exceptionally difficult.

To touch on some of the points that the committee considered in its pre-budget scrutiny, we are keen to assist in other areas of funding for the third sector to perhaps provide support and more stability. However, that will provide stability only in relation to what the Government can give out; it will not help with a change that, in essence, will have a significant impact on the third sector and on services.

We will also have to write to the committee on the analysis that informed the decision to extend the contract for a year.

If you will forgive me, Jeremy, I will respond to all those questions in writing.

It is disappointing that Mr Balfour missed that announcement—I suggest that it was because there was so much good news in the budget that this bit passed him by, but it was certainly there. This was an ask from stakeholders, particularly Crisis in Scotland, to look at what preparation could be done.

In looking at the Housing (Scotland) Bill, we have had discussions about the fact that local authorities could do a great deal of work to, in essence, deliver the bill’s principles without the legislation itself being in place. If we are looking at, say, prevention duties and services working more closely together, what can we do to test those aspects? We are keen to look at how we can ready ourselves for the bill being passed, because one concern that committees often have—and quite rightly so—is about any delay between legislation being passed and its having an impact on the ground, and this is the Government’s attempt to build on the critique that we have received.

Again, Crisis has pointed to a number of ways in which that can be done. Mr Balfour might not have seen it, but he will find in a recent Crisis report, “75 ways to prevent homelessness”, examples of some of the types of preventions that could be put in place and which do not require legislation to have been passed. That, in essence, is where we are coming from. We are now working with Crisis and others, including councils, to ensure that we are ready to start spending that money as quickly as possible at the start of the financial year.

I take Mr Balfour’s point about the timescales with regard to the bill’s passing, but the legislation itself does not need to be in place to allow us to start testing out approaches to prevention. Crisis and others already have a collection of tried and tested examples that show how we can put these things into practice.

Those are exactly the points that we are working through with stakeholders. I am working not on the assumption that the budget will be passed, but on the assumption that, if it is, we will want to get on with this as quickly as possible. Indeed, in the discussion on housing that we had yesterday with stakeholders, particularly with Crisis and other homelessness charities, we talked about how, when the money becomes available, I want to work with them on finding the best way of using it to maximum effect.

I hope that Mr Balfour thinks that that is a useful way for us to go about this. We are listening to stakeholders, hearing their concerns, responding to them, and then working with them on the final detail. Of course, if the committee has any suggestions on how that money could be spent, it is more than welcome to add them to the mix.

We will absolutely endeavour to use consequentials to assist as best we can. However, even at this stage, we do not have clarity, as we talked about earlier, on the costs to the public sector being met—never mind the wider public sector and the third sector—so there are different layers to this. At this point, it does not even appear that the UK Government will do full cost recovery for the core public sector, so I remain rather pessimistic that it will reach a solution that will help the third sector. If the UK Government has a change of heart, we will stand ready to act on that. However, I am afraid that my hopes are not high.

On the last point, I said earlier that, given the financial constraints that the Scottish Government remains under, we will not be able to respond as fully as we would like. We will carefully assess all grant applications, as the committee would expect us to do, to see what we can do to cover costs. However, that is exceptionally challenging, given that there has been only a 1 per cent real-terms increase in the Government’s revenue budget this year—indeed, after accounting for inflation and deducting social security funds, the Government’s resource budget is forecast to drop by 0.3 per cent. That is the financial position that we remain in.

On the issue of multiyear funding, we have made that commitment and I take it seriously, as do my Cabinet colleagues. Clearly, third sector grants are distributed not only in my portfolio but across Government. It has been exceptionally difficult for us to monitor that within Government, given the systems that we had in place previously, but that will improve now that we have new systems, such as the new financial management system, which will enable us to understand the baseline of grant information across Government.

I am pleased to say that we are increasing the number of two-year funding agreements with third sector organisations. We are developing, in essence, a pilot within Government to support organisations that deliver essential services or contribute to the Government’s priority of ending child poverty. We are still collating that information across Government, so I will provide further information on that in writing, but we are moving forward with providing that multiyear funding and with early notification for organisations of that funding.

Given that the budget has not yet passed, we cannot give a concrete grant offer, but we are sending out letters of comfort, so that third sector organisations, and those in the pilot in particular, will know what to expect from the Government should the budget pass.

I am also working to ensure that we deliver earlier grant notification overall, where possible, even if that is not part of the pilot. That will vary from portfolio to portfolio. Some grants still require to be discussed between the portfolio and the organisation, because, for example, the exact nature of the service provision might not yet have been determined. However, we are keen to move forward with multiyear funding and early notification, and the pilot is a significant step that we have undertaken to provide that.

As I say, we are on a journey, and we have taken an important first step to move forward with multiyear funding. I can provide the committee, in writing, with the steps that we have taken on this part of the journey, which have been welcomed by the third sector.

I am really concerned about that. I have to say that I am genuinely astonished that the leader of Scottish Labour used the word “handouts”. Since the devolution of social security, I thought that we all agreed on the principles of social security. We had a near consensus, with the exception of the Scottish Conservatives, that social security is an investment in people. I said during the debate that I see the Scottish child payment, for example, as a lifeline for people. It is not just me saying that; that is what I hear when I speak to constituents. I would be surprised if any MSP did not hear that from their constituents.

Talk about handouts really plays into the stigma around people claiming what they are entitled to and what they should apply for. I am deeply disappointed that we no longer seem to have a near consensus that social security is an investment in people. I hope that the leader of Scottish Labour will reflect on the fact that that word does not help us. When we are trying to encourage people to come forward to get what they are entitled to, a discussion about handouts is not helpful; in fact, it is exceptionally detrimental.

I am concerned about that. I am concerned about many things when it comes to this issue, but one concern is that there seems to be confusion around disability benefits and employability. Disability benefits are paid to people with a disability or long-term condition, regardless of whether they are in employment, to cover the additional costs of disability and long-term conditions.

We must be really careful about how we discuss the increasing number of people coming forward to claim disability benefits. I am concerned about some of the tone and language in the overall debate. The UK Government is looking at that, and I am glad that it has distanced itself from some aspects of the previous Conservative Government’s attitude, but we must wait to see what happens.

The budget is key. Any changes to what happens within a UK benefit can have significant implications for the block grant adjustment for the Scottish Government. We had a stark example of that recently, when the UK Government made a very quick and, I still think, ill-judged decision about the winter fuel payment—what we call the pension-age winter heating payment—which made a difference to the Scottish Government’s budget. We must be cognisant that any change of heart, particularly one that happens in an exceptionally short time, could very well have budgetary implications that the Scottish Government would have to tackle.