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One of the issues that I stood out when I was reading through the document concerned your plans on innovation. The budget proposal outlines a reduction in capital requirement from £250,000 in 2022-23 to £150,000 in 2023-24. Given the increasing burdens and complexity—and, indeed, additional people you need—I might have expected you to have an associated increase in your capital requirement with regard to IT systems and automation to deal with that. What is the explanation for the reducing capital requirement?

I quite agree. It is useful to hear that on the record.

I will follow on from the early set of questions from the convener. Although we were all aware of the interactions in the economy between different budget decisions before, the autumn certainly brought that into very sharp focus, including in relation to spending plans versus debt.

The other issue that has become clear in recent months as we look at UK economic data compared with that of other countries is that our difficulties are confined not only to recent months—UK growth has lagged that of our comparator nations over the past decade, which seems to be a function of investment.

I also put this question to the previous week’s panel, which consisted of the IFS and others. Do we need a renewed focus on what spending within UK or Scottish Government budgets is genuine investment in order to track that consistently and have a good overall view of the level of Government investment and therefore what the likely longer-term impacts on the economy will be from an individual budget and over time when we see funding being altered?

From the answers that you have just given, it seems that, in effect, you are saying that we might be talking about one of those things that politicians cannot be trusted to categorise, and that more objective bodies should perhaps be taking a broader view. It is clear to me that we need to have a much clearer and tighter focus on what spending is genuine investment, otherwise we will be doomed to end up in a downward spiral.

Is this area one that the OBR and the Scottish Fiscal Commission could take a broader view on? I am cognisant of the fact that there are lots of grey areas where spending could be categorised as consumption or investment, but it is important that we at least try to take a view of the overall balance between consumption and investment over the longer term. Is that a potential area of focus for your work or that of other bodies?

In the set of forecasts that it made in the summer, the Scottish Fiscal Commission recommended that the Scottish Government should prepare its budget on the basis of the Organisation for Economic Co-operation and Development COFOG principles. Does the OBR have a similar view about the UK budget and what improvements it could make to transparency? Do you have any particular views on the transparency and clarity of the way in which the Scottish Government sets out its budget?

It sounds as though you are saying to me, “No luck—I’m afraid that it’s back to you politicians to make those sorts of tricky decisions.” In all seriousness, it is an interesting point, on which I am clear that we need to have a sharper focus.

This will be my final question. In recent—

I apologise, Andy. I cut you off.

My final question is on a related issue. In recent weeks, Frances O’Grady from the Trades Union Congress and Roz Foyer from the STUC have been involved in an interesting discussion about the true cost of public sector wages. That is interesting from the base point that, given that tax is paid on those wages, the Government needs to consider not the gross amount but the net amount. I wonder whether that is a sharper point in Scotland, given that we have a higher proportion of public sector workers, and given the way in which the fiscal framework works, which is about per capita growth in tax receipts.

Do we need to be more sharply focused on the true costs of the public sector wage bill and how that works its way through the tax system, in particular the fiscal framework in Scotland? I am thinking, in particular, of the true net cost of public sector wage increases, given that it is such a sensitive topic at the moment.

Given the way in which the fiscal framework works and the size of the public sector workforce, might there be some additional considerations in Scotland?

Thank you. I will leave that there, but it is an interesting topic.

Thank you. I want to follow up on the point about tax revenue and the block grant adjustment. It has been a recurring theme at the committee, which has been looking at why we consistently have negative block grant adjustments. That is largely about the fiscal framework and our per capita income tax receipt growth.

Given that the OBR is projecting further negative block grant adjustments, is there any further insight to be drawn out on why our income tax receipt growth is slower in Scotland? Is there more detail on that, given that it is critical to our understanding of public finances in Scotland?