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I will move on to retail. I wonder whether we are sufficiently concerned about the impact of Covid on the retail sector, considering that 10 per cent of employment stems from retail and associated industries, and the sector is the largest source of private sector employment. That is coupled with the fact that online sales, as a proportion of retail sales, have increased by about 50 per cent. According to the Office for National Statistics, about half of those sales are from—I love this euphemism—“non-store retailing”; I think that we all know which big non-store retailer, whose name starts with an A, that probably refers to, at least in terms of the lion’s share.

In addition, furlough is coming to an end. Are we about to see a cliff edge for our high street retailers? If their trade is currently down by 20 or 30 per cent, as current figures show, that is not sustainable, is it? What are the consequences of that?

I will go to Mr Robertson first.

I point members to my declaration of interests. In particular, I am a director of a company with retail interests. I am also a trustee and vice chair of the ADHD Foundation charity.

I ask for clarification on declarations of interests from the secretary to the commission. Is it relevant to declare any governance or, indeed, audit roles with external organisations that we might have? Members might want to reflect on making those declarations.

I request that members reflect on whether they have any audit or governance roles with external organisations and maybe use the opportunity to declare those now.

Thank you very much for those answers, which provide us with a good overview of the challenges and changes that Covid has brought.

I started with the macro, but I hope that you will forgive me for diving straight into the micro. In looking at your accounts for this year, I see a number of variances that I might expect, such as a decrease in expenditure on stationery and an increase in information technology spend, but two line items jump out at me, the first of which is a 44 per cent increase in rent and rates. I would like an explanation of that, because it is quite a large increase not only in percentage terms, but in actual terms, especially at a time when people were using buildings less. I am keen to understand why that occurred.

Likewise, expenditure on staff recruitment was up by 44 per cent. That might not be a significant amount in actual terms, but I would be concerned if that indicated underlying staff churn. I would be interested in an explanation of why staff recruitment costs increased so significantly in the year.

I begin by asking the big question. Covid-19 has clearly disrupted life over the past 18 months, but it strikes me, and has been alluded to by Professor Alexander and Stephen Boyle, that it has had a fundamental impact on how Audit Scotland conducts an audit. I always think of auditing as requiring some level of being able to eyeball and assure that what is on the accounts is actually there. If you are working remotely, it strikes me that that is fundamentally disrupted. In broad terms, how has that impacted your ability to conduct an audit?

More important, we are all aware that Covid-19’s impact is not just temporary, but is likely to alter how we work in long-lasting ways. Which of the changes that you have made this year do you see persisting? What impact will that have on the way that Audit Scotland organises itself in the future?

Thank you. I will end my questions there, chair.

Undoubtedly.

To follow up that point, I challenge what was said about businesses having figured out how to operate through Covid. The businesses that I speak to have managed to get through Covid but, although they are trading, their trade is significantly down from where it would have been. For a lot of consumer-facing businesses, 60 to 80 per cent is not unusual and it is not sustainable for them. Furthermore, most of those businesses have got to that point by accumulating significant sums of debt, whether that is through Government schemes, deferred payment of rent to landlords or other arrangements. It has even been reported that small business owners have cashed in their pensions. I am told that a lot. It strikes me that those businesses are operating under a very different set of circumstances from those that existed pre-Covid, and that, too, must imply a degree of fiscal headwind when you start looking at those figures, or certainly the overall economic performance of the country.

No.

Following on from the convener’s remarks at the beginning of the meeting, we can agree that we both have excellent diction and enunciation.

I want to follow up on some points that have already been raised. I am clear that you have read the SPICe report and the Fraser of Allander Institute piece looking at the outturn reports and comparing them with the tax plans. In the 2019-20 budget, the Scottish Government expected its tax plans to raise an additional £500 million, but, based on the outturn, they have raised only £148 million. I understand what you were hinting at with regard to the block grant mechanism. However, it is clear from both of those bodies that what that difference fundamentally tells us is that income tax per capita has not grown as much in Scotland as it has in the rest of the UK.

First, do you agree with that assessment? More importantly, and given what you were just saying about the need to expand the income tax base and to make sure that people are earning more within that, what does that say about the policies that you have been pursuing? What policies will you pursue to ensure that people are earning more so that they pay more tax, which we can all agree would be a good thing?