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Do concerns largely get raised about issues that are focused on by the media, or do they largely come from the direct experiences that businesses have had?

Thank you very much, convener. I am absolutely delighted to be on the committee and I do not have any relevant interests to declare as far as I am aware.

Thank you for having me at the meeting, convener.

I express my sincere thanks to Laura Hansler and the A9 dual action group for bringing the petition before the committee and, indeed, raising the profile of the issue. It is the product of frustration but also grief at the number of fatalities on the road, as well as accidents and near misses, which do not get recorded.

I will make some very brief comments about the matter not being just a Highlands problem. It is an issue of national concern for three reasons. The first is that there is no transition to net zero without dualling the A9. That is contrary to arguments that have been made about it being inconsistent with our move to net zero. However, the Highlands and rural Scotland disproportionately rely on car use and we must have an electrified, dualled A9 for safe use. Secondly, the Highlands relies on the road for economic reasons, which have already been covered. Thirdly, the region is reliant on it when it comes to safety. Above everything else, that third reason is perhaps the most important.

There is a cast-iron guarantee to dual the A9. We are exercised about seeing the timetable and ensuring that it is backed up with appropriate procurement processes, which have come in for some criticism, and a budget. I know the constraints on our budget. Clearly, given a £5 billion capital budget every year, an A9 dualling programme that costs £3 billion needs to be prioritised. That will mean difficult decisions elsewhere but, such is the importance of the project, we need that prioritisation and that funding.

That is all that I have to say, because the topic has been adequately covered, but I cannot stress enough the importance of the programme both to my constituents and to those whose lives have been affected as they wait for the updated timetable—including those who are subject to compulsory purchase orders, who have been waiting in some cases for almost a decade for dualling to go through and the sale of whose houses, for example, has been affected. It also impacts on the rest of Scotland. Those three really important groups want answers.

My only comment is that a lot of that £3 billion-worth of investment is unique in Scotland. As members will understand, within a fixed budget there are ways in which we can pass on consequentials that come from the UK Government or decisions that we make on what to prioritise within our budget. By definition, if you prioritise one area, you cannot prioritise everything else. We have very intentionally prioritised seeking to support families with the increased costs that they are facing right now and we have tried to be conscious of inflation, despite the fact that our budget is not inflation proofed.

For example, the Scottish child payment has gone up by 100 per cent since April and is due to rise again by 150 per cent in December, in comparison with inflation at around 9 per cent. We have also uprated social security benefits by the rate of inflation at the time of the budget. We are trying to help families as those costs increase, but that is from the position at which our budget was set, when inflation was at about 3 per cent.

Those are conscious choices to help families, but it is an extremely challenging piece of work to manage a budget that is not inflation proofed, despite what families are facing.

I will make just one point on that. It is worth looking at the Scottish Fiscal Commission’s assumptions, which are that more people will be eligible for ADP than were eligible for PIP. I do not know whether you will have the SFC in front of the committee, but it might be worth unpacking why it believes that.

I will make a few comments about that. First, at a time of extreme volatility, costings that we established perhaps a few weeks ago will inevitably rise. We might have forecast that a particular pot of funding would be provided to deal with a certain number of people, but it is highly likely that, in the light of inflation, demand will increase or the support that we require to give will increase. I make that point in relation to project management—additional consequentials do not sit there unused. That is quite important. We have to manage the budget so that I do not get to January and discover that there is still more demand.

The second point on that funding is that things will probably become even more challenging than they are now. Inflation is at 9.1 per cent, and the Bank of England has forecast that it will rise to 11 per cent. I am not being political when I say that the UK Government is adamant that it will not do anything further on the cost of living now because of what it perceives to be the risks of contributing to inflation. I do not foresee any further consequentials coming down the line. We also need to ensure that any funding that we have in hand is used well and used to cover the rest of the year.

Those are the two considerations when it comes to that funding. I do not have much more to add, apart from making the point that every single penny that is for cost of living measures will go on cost of living measures. We have set out today the £3 billion figure; we had been using the figure of £770 million of additional resources to address the cost of living.

My final point is that pay is one of our direct cost of living measures. Right now, we are, quite rightly, engaged in a number of pay negotiations, and we are conscious of other on-going negotiations. We must see pay as a cost of living measure.

I mention those three areas to set the context for how we manage all funding, including the £41 million. That is why I do not have a more definitive answer. It would not be particularly wise to allocate funding without being conscious of those three pressures.

I do not know whether Shona Robison has anything to add.

I will start with borrowing. I have outlined the reasons for borrowing. As a reminder, we can borrow for two main reasons, but resource borrowing is entirely for forecast error—that is what the £300 million relates to. To put that in context, I note that, in a budget of £45 billion—give or take—£300 million is a pretty small figure.

I emphasise that, over the next few years, in order to manage the reconciliation figures, which are the result of forecast error, not of policy decisions, we have to use spending power—actual money that would go to the health service, social security and all the other priorities of members around the Parliament. This is literally just about smoothing budgets.

If a big reconciliation is required, as it will be next year and the year after, there could be a big cliff edge for the health service. We have avoided that through prudent and careful budget management. However, resource borrowing is not an intangible and irrelevant side issue that accountants worry about; it has a direct impact.

You asked me, straight up, what should be required. I think that we should have the same powers as local government—we should be able to borrow according to affordability. That is what grown-up Governments do.

We are engaged in a review of the fiscal framework with the UK Government, and I will be making that case. My compromise position—which I probably should not confess to in public—is that we should at least index the borrowing to the budget, because, as the budget increases inevitably with inflation, that £300 million remains fixed, so it will become an ever-decreasing proportion of the budget.

As Shona Robison said, I could probably bore for Scotland on the fiscal framework, so I will stop there, but I hope that that helps to answer your question.

My point to the Finance and Public Administration Committee was on its line of questioning, commenting on the fact that, essentially, the gap between what the Scottish Government spends on social security and what we receive from the UK Government is set to increase by more than £1 billion over the next few years. That has been an intentional choice. You cannot talk about putting fairness and dignity at the heart of social security and not put your money where your mouth is. In fact, I do not think that any member has ever voted in the chamber against that fairness point when it comes to social security. It is right that that funding is there.

On the other side, however, the reason why we have been intentional about investing in increasing the Scottish child payment, alongside, for example, significant investment in employability support for families—supporting the payment of the living wage and supporting families into work—is because we want to reduce child poverty. Ultimately, to be effective will be to see Scottish child payments, in the round, reducing over the long term.

We all want there to be fewer children in poverty and therefore fewer children who are eligible. I was very clear with the Finance and Public Administration Committee that I am talking about the long term, if we are to be effective in doing that.

We will continue to invest in other areas of social security, such as disability benefits and so on. We have put fairness and dignity at the heart of social security, so those payments will, rightly, continue.

My point was that, ultimately, we want those forms of support to deliver the outcome of reducing the number of children in poverty and, by extension, the number of eligible families, because they no longer need that support.

Shona might have said this already, but the Scottish Fiscal Commission’s forecasts bind us, as it were, to what we spend. They also bind us in terms of having to meet demand-led schemes, which is absolutely right. I know that the committee has expressed an interest in the topic before, but I think that the discussions about the fiscal framework often fixate on taxation and borrowing. However, one of the biggest changes that we have seen in the past few years is trying to manage the volatility in a demand-led scheme.

I have to allow—quite rightly—for sufficient budget to meet demand. I cannot say, in this year of volatility, that we will allocate £4.2 billion—which is the figure that we have allocated for social security—and then get to January only to realise that the demand is £4.6 billion and I need to identify £400 million from within a fixed budget. You cannot do that. You cannot identify £400 million from within a fixed budget in a matter of weeks. That figure is almost the entirety of some portfolios. Therefore, you have to manage the demand-led schemes, but the level of risk is so substantial that I think that we need the tools in the budget to manage that.

If ADP becomes more generous—our schemes are already more generous by a margin of £1.3 billion over the next few years—in my technical world, managing a more generous scheme requires me to have the right tools to meet that demand.

If there is error and the Scottish Fiscal Commission forecasts are wrong—every economist makes errors, because nobody can predict to the precise penny what something will cost, so that is not being wrong but just the nature of the job—in that situation, any other Government would borrow for the shortfall. It would not go digging in other pots of money from other portfolios to take that and scupper those areas to fund the shortfall. I cannot borrow for that shortfall. My borrowing allowance for forecast error is £300 million, and you will already have seen from the tax position that we are forecast to have to meet a gap that is significantly higher than that, and this is before we even talk about social security.

I make that point in answer to Jeremy Balfour’s question because I think that we all have genuine interest in ensuring that we have tools in place to manage demand-led schemes. It might sound technical, dull and irrelevant, but it makes all the difference in the world to the individuals who are eligible for the schemes.

There are a number of lines or portfolios in the resource spending review that all contribute to the wider picture on employability. You can, of course, look at the education and skills line or the employability lines in my portfolio. Prioritising one area means, by extension, not prioritising others. In my portfolio, I have prioritised employability.

I mention that because we must become more flexible in supporting parents if we are going to tackle child poverty. You cannot consider simply the more conventional skills routes. You can rightly scrutinise higher and further education but, in my portfolio, on employability, I am excited about the significant increase in investment in the no one left behind strategy and the significant investment in a new commitment, which is the offer to parents. That brings together a range of services and support, including not only employability but childcare, health, support to access transport and family wellbeing. In other words, it is a wraparound support that focuses on families that are at the greatest risk of experiencing poverty.

This year, we have allocated up to £113 million to employability services. That includes up to £81 million to support delivery of the commitments on the second tackling child poverty delivery plan. That enables you to see the trajectory across the RSR.

I dispute the premise of the question, because we need to think far more flexibly about employability. Therefore, you need to consider the RSR in the round. The four priorities that have been identified, one of which is tackling child poverty, must run through every portfolio. It cannot be just Shona Robison’s job to tackle child poverty; it has to be my job in finance and employability, the Cabinet Secretary for Health and Social Care’s job and the Cabinet Secretary for the Constitution, External Affairs and Culture’s job. It is all of our jobs. We all should prioritise it, which is what you see in my portfolio.