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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 16 April 2025
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Displaying 1063 contributions

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Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

You are absolutely right that we want to have more certainty, but the uncertainty around the fiscal settlement from the UK Government has made that problematic. I will take a step back and look at what we want to do with the ScotWind money. The Cabinet Secretary for Finance and Local Government will say more on this, but the intention is to use that funding, wherever possible, to support net zero capital projects, because that is where we see our getting value for that money.

You are right to say that, depending on how we do that, there is scope to leverage in additional private sector investment, which remains our objective. However, because of the uncertainty around consequentials and the pressures on pay, inflation, health spending and the other areas that we have identified, we have had to use that money over the earlier part of this year, to some extent, to help to balance the budget, which, as you know, we need to do.

As we move through the rest of this year and the budget picture becomes clearer—for example, we are not yet sure about the position with national insurance contributions for employers, including those in the public sector, and there are other such examples—our intention is for the ScotWind money to be substantially available for capital investment.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

I would not make that connection. We can think through the logic of why those transfers happen. As we have explained, it is about policy decisions being made in one portfolio, with a different portfolio doing the delivery. If the funding is put into the delivery portfolio, where the policy decisions have not been made, it probably makes it harder to have control, because the portfolio making the policy decisions is working in a vacuum, to an extent, as the funding is, at that point, somebody else’s money, which the other portfolio is, in effect, spending. If the budget owner—the portfolio that has the budget—is making the decision on what it should be spent on and is considering how it balances its budget and gets maximum effect from that, that is the way to have better control and, therefore, better sustainability. The transfer is simply to execute the delivery of the policy decision, once the extent of the spending has been determined.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

It is an on-going and evolving process. All of that works within a range.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

You have to unpick the timeline on that. The UK-wide pay review bodies would have been making their deliberations in exactly that time frame; the UK Government would have been aware of that and would have engaged with them. We are not part of that process. We have to wait until they publish and the UK Government makes its decisions.

Following the election in July, the UK Government indicated that it would be making those pay awards in full. However, you must remember that there was huge uncertainty at that point about how those awards would be funded. There was much talk about the UK Government reducing departmental spend budgets in order to fund the public sector pay deals, which would have meant that we would have been in a difficult situation. It was only when the UK autumn budget took place that there was more clarity on the consequentials that were coming through.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

That will depend on the circumstances. If we are in a situation in which unavoidable costs have been incurred elsewhere, in order to achieve balance we go through a process of understanding what budget lines we might need to adjust. That will come down to a number of factors, including what spend has already occurred, what is committed, what we have made commitments on and those areas in which there may be underspend. A range of factors will come into play in making such an assessment. I do not think that there is a hard and fast way of determining that.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

I do not know whether we have made a final announcement on our decision on that.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

Yes. The increase for this year is £1.4 billion on resource and £72 million on capital, and the number for next year is £3.5 billion, so the difference between 2024-25 and 2025-26 is about £2 billion. When you take inflation into account, that number is just over £800 million in real terms, of which £500 million is capital and, as I said, £328 million is resource spending. That £500 million capital increase effectively takes us back to where capital spend was in 2023-24, before the significant cuts that happened in this financial year. I will write that down for you, if it helps.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

—and police per head of the population than there are in the rest of the UK. That is very important and that is the position that we want to maintain. However, it is also absolutely clear that the spend on the public sector in general, in the area that we call corporate services, is something that we are working very hard to address. As I said, that includes recruitment in Government and more widely in those non-front-line occupations.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

Yes, I would be quite comfortable with assessing where we are and laying down projections as to where the policies that we are putting in place would take us.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

We had this conversation earlier. If you unpick that figure and look at the difference between resource funding for 2024-25 versus 2025-26, you find that the increase in real terms is just over £300 million—from memory, it is £328 million—which is less than 1 per cent. Does that mean that there are no pressures going forward? It does not because, as we know, there are always challenges in, for example, health spending.