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I think that the UK Government does not have the figures. From its perspective, what goes to Scotland is the net position in final consequentials. When the UK Government is to make an announcement, it inevitably wants to see whether any departmental underspend could be redeployed to that new announcement, which might also require new money. Whenever the UK Government announces additional consequentials, the difficulty is that we know that we will get only the net impact and not the absolute figure that has been announced—the amount will not all be additional, which is where the challenge arises in considering what is and is not new. That is one big issue.

You will recall that the UK Government implemented the Barnett guarantee last year, which meant that all funding that was announced was additional. The guarantee was removed this year, and the only reason that I can see for not reinstating it is that the risk to the UK Government is too significant in a year when it wants departmental underspends to be used to manage new announcements.

The most recent discussions, in the past two weeks, might be informative about another aspect. We talk to the UK Government daily—I do not know how often Dougie McLaren and co engage with it to get as much intelligence as possible about where we might end up—but the difficulty is that that intel might be out of date within hours.

I want to be as transparent as possible, but I cannot go public and say, “We got this update in the last hour and we’ll get another update in the next hour.” We cannot keep up a running commentary on what we receive. That is where it is difficult for Parliament to do scrutiny. We know that there are shifting goalposts, but we have to deal with a point in time, and figures are moving all the time.

We try to base decisions on the flexibility that we might have or on the financial position that we might have. We might make a decision—as I did last week with the £120 million—and I might be told the next week that, although we were told that there was additional funding, we have determined that that is not the case.

The UK Government budgets on a Government-wide basis. I do not dispute the challenges for it—it is a substantial Government with multiple departments that have multiple spending lines. We get the net benefit of all that. It is no wonder that it is challenging to get to a position, but that challenge is in a sense offshored to us to deal with.

I do not know whether that answers your question. Does Dougie McLaren want to say more?

Quite a powerful argument can be made in that respect. If local government can—as it does—manage its budgets effectively through this process with its highly skilled and trained directors of finance, it cannot be unthinkable that the Scottish Government is able to do the same. We have had conversations with Opposition spokespeople on this matter, but we think that there is, at the very least, an argument for indexing some of these arbitrary limits and ensuring that, as the Scottish Government budget grows, year on year, if not quite in line with inflation, the limits grow, too.

At the end of the day, any form of borrowing has to be affordable—I have to factor in the revenue costs for borrowing. We are not making decisions purely on the basis of a target or arbitrary cap; I have to factor in the revenue costs, and I do so on an annual basis.

As far as reserves are concerned, such an approach would just allow us to make decisions for ourselves. I do not think that anyone likes this constant debate and discussion and my having to go to the UK Government with new requests to carry forward outwith the reserve or otherwise. If the additional powers were granted—which is something that would not, as far as I can see, cause the UK Government concern—we could make those kinds of decisions on an annual basis.

As you will know, the principle that the Scottish Government is due compensatory payments has been accepted by both the UK and Scottish Governments. What is in dispute is the quantum. The different approaches lead to very different outcomes. Indeed, I think that I cited the scale of the divergence the last time that I was before the committee.

The issue will also be on the agenda this Thursday, at my meeting with the Chief Secretary to the Treasury. That means that, at that meeting, we intend to resolve two very substantial issues: the fiscal framework and the spillover dispute. You can wish me luck and wish me well in the hope that my negotiating skills lead to a conclusion on both matters and a positive result for the Scottish budget.

Absolutely. The full £440 million is available, but you need to remember that a lot of that was for business support and has already gone out the door.

You will remember that there was a dispute about whether the £440 million was new funding. A lot of that money has already been factored in—for example, the UK Government had previously announced £145 million in relation to a material change of circumstances in non-domestic rates. I could list all the other elements.

The £440 million is not new funding. However, it is the fact that we do not have to pay it back that gives us a bit of flexibility.

No. As we approach the end of the financial year, I am always looking at how much flexibility we have. The fact that I do not have to pay back any of the £440 million—even though that is allocated—gives me a bit of leeway.

The UK Government is saying that there could well be more money. Therefore, in addition to the flexibility that I think that I have as a result of not having to pay back the £440 million, the amount of funding could also be increased. I think that that increase will be largely driven by health consequentials, with a little bit of transport consequentials as well. We then get into the territory of that discussion about whether, if that comes from health consequentials, we need to pass it on to health.

I realise that these are quite tricky conversations. Much of this will be clarified by two things. One of those things will be, as Dougie McLaren said, the spring budget revision, which is our finalised accounts for this financial year—for this budget—although there will be more to come, because there is quite a lot of late movement. The other thing will be the spring estimates.

If we already had both those aspects formalised, I could give you specific figures. However, because we are ahead of the UK Government announcement, it is very difficult for me to do so. I am getting a moving feast in relation to funding from the UK Government. That is the territory that we are in.

The bottom line is that I think that there is sufficient flexibility for me to allocate that £120 million, because I do not have to pay back the £440 million and because I think that there will be a bit more room with additional funding. In addition, we are getting to the end of the financial year and I am seeing where there might be underspends that we could use or expenditure that we could move into next year.

Yes—of sorts. That probably demonstrates why some of this is quite challenging, because it is such a moving feast.

Obviously, in next year’s financial year, I will have to manage the spending commitments within the budget. Putting in additional funding such as the £620 million is something that we did in previous years. It is not ideal, but it allows us to say that we think that we will be able to get a particular amount of funding. It is a very prudent estimate, but it is subject to change. That allows us to maximise spending decisions. It is quite likely that, in-year next year, there will be additional one-off consequentials.

When we publish our budget, that happens at a fixed point in time, but budget management and shifts happen almost hourly. Even since 9 December, there have been shifts, so you are right to say that, since the £620 million was announced, there have been significant shifts. Some things have got better this year that have allowed us to carry forward the reserve, but some things have got more challenging for next year. I imagine that, if I came back to speak to the committee in a week’s time, other things would have changed.

As you have said, in previous years, as soon as any suitable funding was identified, I redeployed it to new financial support schemes. Now, I would very much like to focus on economic recovery work. We have committed to spend £375 million and my commitment is to spend that £375 million on business support. Some of that will be spent on the emergency grants that are being paid out, but most, if not all, businesses—even those that have been through a challenging time—would far rather be supported to trade and operate fully than to depend on emergency grants. The commitment is that any unallocated funding will be redeployed to economic recovery.

Yes, it will tackle those things. I am leading on the fiscal framework review for local government, and Tom Arthur will take a lead role in that. My hope is that it will sit neatly alongside the resource spending review. Certainly, my intention is to engage as comprehensively as possible with the Convention of Scottish Local Authorities, even in the run-up to an election. I have a commitment to work with Gail Macgregor on the fiscal framework review and the resource spending review.

I sincerely hope not.

We work tirelessly to ensure that our spending is effective. However, the limits make that really challenging. With six weeks or around two months to go until the end of the financial year, if my conversation with Douglas Lumsden is anything to go by, you see how moveable the parts are—and yet I need to land a £40 billion-plus budget within extraordinarily tight parameters. Inevitably, we could take more effective decisions if we were not trying to shoehorn them into arbitrary limits that do not make sense.