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On a practical level, I am thinking about local authorities that are looking at bids for the next round of funding. Local authorities such as Angus Council and North Lanarkshire Council made unsuccessful bids, although North Lanarkshire is a priority 1 area. Will those bids and the fact that other local authorities did not submit any bids at all be taken into consideration?

The assessment was then made on a scoring system, using value for money and impact, and looking at distribution across the three core themes of regeneration, transport and culture.

I have two key questions. The first is on the initial indexation. As you have just discussed, the issues are complex; I agree about their entangled nature. Nevertheless, they are quite narrow measures to use to capture the situation in the first indexation, especially when they are given equal weighting. Is that the methodology to be used forever and for all time, or is work going on to try to embed some of the more complex issues, such as geography, in the assessment?

Secondly, you have stated a number of times that there is an objective decision-making process. From my reading of it, the final decision, once the scoring had taken place, was a ministerial one—

I welcome the secretary of state to the committee. It is refreshing to have a UK minister, and I encourage him to go back and encourage his colleagues to do likewise, because it is important for devolution’s sake that that happens.

I will focus on the levelling up fund, following on from some of the issues that Liz Smith and Kenneth Gibson raised. I begin with a contextual point. Productivity in Scotland, in output per hour, varies by about 40 per cent. It is at its highest in Edinburgh, at around £40 per hour, and at its lowest in the Western Isles, at £28 per hour. However, we do not need to go even as far as the Western Isles; in Glasgow and Dundee, it is about £31 per hour. There are huge disparities in relatively short distances.

I will ask you about two points. First, a thesis is required as to why that situation has occurred in the first place. Although there is a huge wealth of information on best value and impact, and six forms of capital are set out in the levelling up white paper, I do not necessarily see a thesis on why that has occurred. What work is going into that?

Similarly, is there a danger in focusing on local authority areas? You can invest in an area but, if we think about Edinburgh versus Dundee and Glasgow, some of the issues are about how the connections are made, and it is important that such decisions are not made in isolation. Are those contextual points areas of work within this space?

With that in mind, I will dig into the methodology a little more. My understanding of the way in which the funds were allocated is that, first, there was the indexation based on productivity, unemployment and qualification levels, all of which were given equal weighting.

I feel that it is required. The cabinet secretary fairly reflects last year’s conversation, but costs were produced and shared by both sides, if I recall correctly. We presented our assessment of those costs and it was a useful and constructive dialogue. I would be more than happy to share them; they were widely publicised this year and last.

To provide some balance to the issue, the budget’s context was one of proposals being presented within a fiscal envelope. There is a point of perspective about what that envelope was and what the carryover for Covid funding from previous years was.

The final point that I make is that the other element to the issue is that the proposals are not necessarily only for recurring funds but are also for alternative approaches to Covid recovery. That is a point of clarification and I would be happy to sit down with the convener at any point and go through my costings and how they compare with the fiscal envelope that was available as set out in the fiscal framework, if that would be helpful for him.

I look forward to receiving that information. However, as we know, net present value factors in those costs—that is how it is defined.

I would like to correct my oversight from yesterday. What is the quantum of unallocated funds? I have quickly added up the amounts confirmed in your letter, which seem to come to £276 million. Is that correct? Does that therefore leave £99 million of unallocated funds? I would like clarification.

I will finish at this point by apologising for not being as on top of my emails as I should be. I had not spotted that one.

I apologise for being remote for yet another week. We are still dealing with omicron in my household.

I have a number of things to ask, not all of which are connected. I will start with a broad question about the approach taken in the budget. For obvious reasons, there is a huge focus on numbers and quantums of funding, but the structure of the budget and the disciplines that surround it are just as important. I would argue that they are probably more important.

If we look at the comprehensive spending review from the UK Government, we see that the block grant increases to £40.6 billion in 2022-23 but that thereafter the increases are very small. That means that they are, in effect, real-terms cuts. That is juxtaposed with the fact that we know that we are carrying significant Covid costs, which I would categorise as recovery costs. Last year, at level 2, we could see the Covid consequentials in the various budget lines, but it is different this year.

I understand the rationale that those costs are lumped in with regular costs, but, in order to manage the budget in 2023-24 and 2024-25, we will have to be able to identify the Covid-related things that we can stop doing because we have recovered or because the response is no longer required. Given that those costs are not specified at that level of detail in the budget, what is the Scottish Government doing to focus on them so that they can be switched off when that can happen and so that it can manage its money and resources in years 2 and 3 of the comprehensive spending review?

I could ask follow-up questions about that, but I want to ask about other things. There is an on-going need to identify those things and keep them under review. That is why some of Audit Scotland’s points about transparency and about being able to follow money from the budget through to consolidated accounts are hugely important.

I want to pick up on some of the convener’s points about ScotWind. There is good news about the sites being developed, but large sums of money are involved. There are two questions. First, there has been a lot of discussion about £1 billion going into the supply chain for every gigawatt generated. That is very vague. Is there more detail about what that will look like? Is that contractually locked into the leases?

Secondly, how has the Government assessed whether the price that it has obtained is of good value? If we assume a 40 per cent yield and a price of £70,000 per gigawatt hour, those companies will generate around £6 billion a year from those sites. The rent will be around £225 million. In total, therefore—I recognise that the calculations are crude—the public purse will receive just 5 per cent from what are very lucrative sites. I recognise that you will not be able to be precise, but has an assessment been made and has a net present value been identified? How has the Government assessed whether it has received good value for money for the public purse from the sale of the 10-year leases for those sites?