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You mentioned that the Government was, thankfully, able to draw down some of the money from ScotWind, but that was a one-off event. That is not a sustainable way to draw on public finances; it is a bit like dipping into your credit card rather than managing your finances properly. That point has been raised by other members.

The Auditor General makes that really clear in the opening pages of his report. The second line on page 8 says:

“The Scottish Government cannot afford its current spending choices”.

The report makes it clear, in black and white, that the spending choices that the Government is making are unsustainable and unaffordable. The report goes on in great detail to demonstrate why that conclusion has been reached. Is the reality not that ministers are simply spending more money than they have, and that the current levels of public spending are unsustainable in the medium to long term?

The public would probably have a fair amount of sympathy with what you have just said. However, at the same time, if, due to tax differentials, they are paying higher rates of tax than they would in other parts of the UK, they would expect to have better public services as a by-product of that extra investment. If the percentage of public money that is being spent on, for example, health and social care is going up and becoming an ever-increasing share of the pie, the public would again expect to see improved services.

You may have observed previous evidence sessions on other Audit Scotland reports about public services. Just a few weeks ago, I highlighted in one of those meetings that not a single NHS board in Scotland is meeting its current in-patient or out-patient targets. People are paying more and they are seeing cuts in public services to fund other bits of the public service, yet they receive poorer outcomes within those public services. There is a fundamental issue about the public’s perception of how the Government is spending its money.

Good morning. Permanent secretary, after your opening comments, when asked if you accepted the key messages, findings and recommendations of the Audit Scotland report, I believe that you said that you did, in their entirety. Is that correct?

We look forward to seeing them. Thank you.

You get the point that I am making. Of course additional revenues have been achieved through taking a divergent approach to tax, but the net benefit to you guys, who have to give money to your directorates, is nowhere near the levels of money that have been paid by the taxpayer. That brings us back to the issues of fairness and transparency that the report picks up on, which is what I am asking about. Do those tax policies actually result in the amounts of money that you forecast for funding public services? The numbers speak for themselves—they are far from what you forecast.

Do you not think that, after more than 17 years of being in power, this Administration would have learned how to govern and not to have to face such stark criticism from the Auditor General? These are fundamental criticisms of how the Government manages public finances, are they not?

Let us work on the assumption that the Scottish Fiscal Commission’s projections around the cost of the rising public service bill is right—whichever way you model it, is going up. How will that be funded? Will it be funded through additional taxes—that is, through devolved taxation? Is it about maximising your capital borrowing potential? Will it be funded through economic growth and, if so, what do you expect that economic growth to look like? The money has to come from somewhere, and I am still at a loss as to where you think that it is going to come from.

Is there any concern in the civil service about the amount of public money that goes towards projects that end up costing vastly more than they were originally forecast to cost and that the Parliament has agreed to? There have been numerous examples of that over the past couple of years, and it will have had an impact on how much money is in the pot for public services.

I will throw some examples out there. The most recent example was the announcement that the cost of replacing HMP Barlinnie was going from £100 million to nearly £1 billion. This committee and others have looked at other examples of strategic national investment projects that have gone wildly over budget, such as the cost of the two CalMac ferries going from £97 million to nearly £400 million and the money that was loaned to Prestwick airport, which was, in effect, written off. There are also other strategic national investments that are not paying off financially by producing an economic upside. Is that a point of concern? Could the Government do better at reducing overspend on projects and avoiding making poor investment choices?

Yes, it was, but a billion pounds is a lot of money at a time when people are seeing local alcohol and drug partnership funding being slashed, so they are right to question such huge capital projects that are going massively over budget. That is before we even start talking about the overspend on information technology projects, which has been wildly out of control over the past decade.

My last question is about transparency, which is a massive theme in the report’s section B. The Auditor General said:

“The Scottish Government has not been sufficiently transparent with the Scottish Parliament or the public about the current fiscal situation.”

In fact, the last time the Scottish Human Rights Commission surveyed the Scottish Government’s budgeting process, it gave it a transparency score of 60 out of 100, which is pretty poor, and 43 out of 100 for public participation. What is being done to improve transparency on Scotland’s financial situation?

You are right that it comes down to ministerial choices, which I appreciate are not for the civil service to determine. Ultimately, however, it comes back to the opening line of the report, which says:

“The Scottish Government cannot afford its current spending choices”.

That may be true now, and it may also be true in the future, which the Government needs to be mindful of.

I will touch on the issue of Government tax policy, which you mentioned. There may be an opportunity for Ms Stafford to come in. The analysis that was done on that paints the picture that, on the face of it, the Government’s taking a different direction on tax policy in Scotland has raised £3.3 billion in additional taxation since 2017. However, as Audit Scotland has also reported, the Scottish Fiscal Commission says that that has resulted in a net benefit to the Scottish Government’s revenue of only £629 million. We discussed that issue at a previous committee session.

That does not sound to me like that tax differentiation policy is working to its maximum effect. Surely we would expect that £3.3 billion to be £3.3 billion that is available for the Government to spend on public services. It is not really working, is it?