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Deputy First Minister, you have said—and it is clear to everyone—that the budget reflects challenges, pressures, priorities and choices. Such things do not necessarily exist in isolation. For example, when it comes to public services, there are huge demands on services, there are vacancies, and people quite rightly want to protect their pay. The Government is not faced with a linear problem.

With that in mind, I want to ask about the budget decisions for the NHS. We have £1 billion being put into the NHS budget as a whole. If we break that down, we see that about half a billion pounds will go to the territorial boards. I understand that about two thirds of the funding that is allocated to the territorial boards goes on pay so, if my maths is correct, what is proposed reflects the pay offer of 7.5 per cent. However, that offer has not been accepted by all parties.

What will happen if the Government has to settle at a higher rate and total pay awards come in at higher than 7.5 per cent? Will the territorial boards have to find the increase or will there be shifts in the overall NHS budget from the national budget lines into the lines for the territorial boards? What are the issues, risks and flexibilities when it comes to the NHS budget lines that are presented in the budget documents?

The absence of a pay policy is not an impediment, but such a policy might be a useful context for those discussions. If all parties understand the broad parameters that the Government is working within, it allows for more constructive negotiations, does it not? I will push a little further. You have made absolutely no commitment around the timetable. May we have at least some indication of whether we should expect a policy within months? Do you acknowledge that having that context might be useful?

That would be helpful.

I commend Mr Carlaw for prefiguring the exact topic on which I was going to ask questions. Having installed a smart meter in my house over Christmas, I consider this an area of my expertise, in addition to retail.

On the £4 million figure, I can well understand that you need a robust system to manage the heat, ventilation and so on, but it strikes me that that is a very large sum. What will that actually buy the Parliament? Is that money just for software or for new infrastructure? In replacing a 20-year-old system these days, such things sit on the network rather than requiring their own dedicated infrastructure. How was that figure arrived at, because £4 million for a single item of software, if that is what it is, would be a large amount?

Obviously, that is important because, fundamentally, the system controls the utilities bill that the Parliament receives, for which £1.46 million is budgeted. First, what will the lifespan of the system be? If it will cost £4 million and it will last five years, that would raise an eyebrow, but if it was going to last another 20 years, it would make sense to spend that in order to manage bills of £1.5 million. Secondly, what is the split in the utilities bill between environmental and all other utilities requirements?

We have highlighted that the figure for the pay uplift for social care workers is around £100 million and we have acknowledged that the key driver of increased costs in the health service is pay. All of that underlines the importance of a national pay policy, but that was not published with the budget. When might that be expected and what might we expect to see in it? It is not just a question of pay, as questions about the overall size of the public sector workforce have also been alluded to. Will it include that level of information or at least an outline strategy from the Government?

On the one hand, I accept your point. If a pay policy is merely an academic exercise that bears no relation to reality, I quite agree that it is of no use to anyone. However, if we are going to get through this, dealing with the challenges that I alluded to in my opening remarks and ensuring that we have adequate pay for people who do extremely valuable work, we need to have, if not a pay policy, a workforce plan to ensure that we have the right people doing the right jobs at the right time and at the right pay levels. Does that imply that we need what I think Audit Scotland has called for, which is a more comprehensive workforce strategy across the public sector?

I will set out some interesting facts. Since quarter 1 of 2020, the total devolved public sector head count has increased by 31,000. The split of that number is revealing, as it splits roughly into a third local government, a third NHS—we can understand it needing extra people given the pressures from Covid—and a third civil service. We have seen an increase of around 6,000 in the civil service alone.

I agree that we must protect public service jobs but, in our allocation of resource in the public sector, do we need to consider the balance between front-line and non front-line services, to put it in crude terms? Would you expect that balance to change, perhaps not in the course of this budget, but in future ones? Should a comprehensive workforce plan consider and reflect that?

Professor Muscatelli, I have a follow-up question to the answer that you just gave and your previous answer about property tax. You have twice said that that would require Westminster approval. I assume that you are talking about reform of council tax and non-domestic rates, and I think that a property tax or a land tax is a very good candidate for replacing one or both of those. Why do you say that that would require Westminster approval? The power is fully devolved if we use it as a replacement for those sources of local taxation. Will you clarify why you say that?

You also stated that the budget was about dealing with the short-term shocks that we have had and, potentially, their medium and long-term consequences. Do the witnesses consider that there is sufficient focus on those? There has clearly been a real focus on trying to create the envelope for pay awards, but we are also dealing with labour market shocks and utility price shocks.

If we look at the budget, we see reference to the warmer homes Scotland scheme. That is one of the budget lines that was cut in the September emergency budget review. Likewise, on pay and the consequences in the health service, we know that delayed discharge is one of the key issues and there was a 3.8 per cent increase in the minimum pay. It is fair to say that the focus has been on creating the envelope for pay increases, but is there sufficient focus on getting people off gas or to be less reliant on it, dealing with labour market shocks and dealing with the short-term issues that we face in our most fundamental public services, such as the health service?

I take the point about your remit.

You said clearly in your May forecast that the Government should be stating its budget on COFOG principles. To what extent has it taken steps towards doing that? To what extent would having such clarity help with the issues that we are talking about?

I have one additional question. Audit Scotland has stated that the Government needs to set out clearly in its budget the contribution that that budget makes towards specific policy commitments. Would you add that to your point around COFOG?