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Again, it is important to stress that there is no suggestion that there should be a single budget line or any silo working. In fact, it is quite the opposite. Audit Scotland is clear in saying that

“There is a lack of transparency about directorate decisions on allocation of funding for NSET actions.”

It goes on to say that

“there is a risk that NSET objectives are not given the same priority by all directorates when it comes to funding decisions.”

It is important to stress that Audit Scotland is not talking about silo working—it is quite the opposite. All directorates are required to consider NSET, but the concern is that, because of the lack of clear budgets showing what each department allocates for NSET, it is not clear what priority each directorate gives to it. Why do you think Audit Scotland is calling for that, if it is not necessary?

Cabinet secretary, when you last appeared before the committee, I asked you about the level of investment that is needed to deliver NSET. That stemmed from concerns from Audit Scotland, which reported:

“The Scottish Government has not determined how much investment is needed to deliver the NSET. This creates a risk to financial management and public accountability.”

You have just confirmed that you do not intend to refresh NSET. The Government has had plenty of time to establish the level of investment that is needed across Government departments to deliver the strategy. Has that been done?

Audit Scotland’s main concern clearly relates to the finance recommendation. Do you think that the argument that you are making would hold water in the private sector? Imagine a project manager or an engineer with responsibility for a major strategy of his company saying to his bosses, two years after the strategy was written, “There is going to be a ruthless focus on delivery, but I can’t tell you how much investment is needed to deliver it and I don’t know how much is being spent.”

That is very helpful indeed. You mentioned sectoral agreements, and encouraging those agreements has been an important priority for the Fair Work Convention. Given that we may see that area strengthened on a statutory basis, what evidence do we have that sectoral agreements have been successful in their implementation? Presumably, that is challenging at the moment because they are also voluntary, but is there evidence that that is a direction of travel that we should be encouraging from a devolved point of view but, ultimately, also across the UK, with statutory backing?

That is helpful. You touched on a lot of points that I was going to come back on, but my final question is about low pay. We are already seeing changes from the UK Government that aim to make the minimum wage a genuine living wage. Earlier, Helen Martin mentioned that we had already seen progress in Scotland, with an increase in the number of employers paying the real living wage: I think that we have the highest proportion in the UK. How do you respond to those who say that the change from the UK Government is not necessary, that we are already making progress, and that working with employers is the way ahead, rather than increasing the wage on a statutory basis? How do you respond to those suggestions?

I declare an interest as a member of Unite and the GMB.

Good morning to the panel. We are about to see probably the single biggest step forward in workers’ rights in a generation through the UK Government’s employment rights bill: a ban on zero-hours contracts, which Helen Martin mentioned, action on fire and rehire, and day 1 rights to parental leave, sick pay and so on. Crucially, that will apply across the UK, so we will not see a race to the bottom on one side of the border. I am interested in what you think our focus should be for devolved competences to add value to the changes that are coming. What should our focus be in relation to what is, in effect, Scottish Government policy?

The committee is looking towards the future budget and, to be optimistic, should there be even a partial reversal of the cuts that you face from the Scottish Government, what would the priority be for any additional resources and what would the impact be of that additionality on delivering the crucial economic growth that we want to see?

Thanks for that. I turn to the Scottish National Investment Bank. In June, it announced a target rate of return of 3 per cent to 4 per cent for the bank, up to and including 2025-26. How does that target rate of return compare with those of similar institutions such as other development banks?

To follow up on that, the point was made that you would not be able to meet your legal obligations if there were more cuts. What legal obligations are you referring to?