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It is not £1 billion.

In the notes that were provided with the review, there is—I hope—some clarification on what those moneys are. For example, paragraph 21 states:

“Within the Net Zero and Energy portfolio £19.6 million of savings outlined in the fiscal statement have been included, the largest of which is the £16 million of additional income in respect of Scottish Water Interest on Voted Loan. The additional £3.6 million relates to reduced forecast on the Zero Waste programme, £1 million of savings from Nature Restoration and £0.1 million relating to Air Quality.”

That provides more granular detail on what is happening with those portfolio adjustments.

I think that all portfolios could rightly make the case that they could spend more money very usefully but, of course, we live in constrained fiscal times and there is a budget process that is on-going.

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.

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.

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

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.

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.

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

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.