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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 19 April 2025
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Displaying 1169 contributions

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Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

Decisions on borrowing, which are one of the few flexibilities that we have, are taken at the end of the year. The capital position has allowed us to move to the position that you have outlined.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

Yes.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

Could you clarify what your question is, Mr Mason?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

We have seen the Scotland reserve operate in different ways. Clearly, given the way in which we have to balance our budget, it is unavoidable that underspend will be generated, and, sometimes, that underspend will emerge after the end of the year. We have also seen the reserve play an important role when we received late consequentials, particularly when we were coming out of the pandemic period, which has allowed us to ensure that resources better align with the optimal time to spend them. We have seen the reserve operating in those two ways.

As to whether the reserve develops into more of a reserve rather than continues as a function for allowing money to be moved from one year to the next, that will depend on a number of factors. The most prominent of those will be the fiscal settlements that we receive from the UK Government, and there will be demand commitments and so on. Is there anything that you want to add, Scott?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

We can certainly incorporate the high-level impact of inflation on capital projects and of construction pressures in the construction sector in the response to the committee.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

Again, as I said, I am happy to see whether we can cover some of that in our correspondence to the committee.

The capital is in-year as opposed to the next financial year. It is there to support the existing position and the on-going cost pressures in the health portfolio. The capital is allocated to support the existing activity that is taking place in this financial year.

On your broader point about what those pressures are and, indeed, about the different ways in which capital is used, whether it be for new projects or for maintenance for example, I would be happy to try to pick some more detail on the issue of capital expenditure with regard to construction and maintenance.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

I think that, in the guide that we have provided to the committee, we refer to the additional flexibility around the reserve being welcome. I appreciate that we are right now operating in a challenging environment for public finances, but we highlight that that greater flexibility will be of considerable value in future years. For example, over the medium to longer term there will be an increase in our scope to borrow. Of course, we have to borrow sustainably in respect of capital, but the flexibility will increase our scope to borrow, over time.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

You touched on it yourself when you mentioned capital spend; it is always about where we are with existing commitments and what requirements have to be met, and I know that that has been of some interest with regard to the capital allocations in the 2024-25 budget. As far as the net zero portfolio is concerned, either it has not been possible to deliver certain projects or changes to the profile of projects mean that they will fall in another financial year. There can be that kind of movement, given that the horizons over which capital projects are developed and actioned can go across multiple financial years. A number of different factors are reflected.

Moreover—and more broadly across the budget, including in resource—there can on occasion be demand-led schemes where the demand has not been what was anticipated or forecast. We have particularly sought to identify as early as possible where that sort of thing might emerge, so that we can reallocate the resource in an effective way. In certain areas—net zero, for example—it has not been possible to deploy the resource in-year, and as part of that in-year management, the capital has been reallocated.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

Clearly, broader behaviour with regard to complying with environmental regulations goes beyond tax policy. Ministerial colleagues lead on those areas, and I would not want to speak about an area in which I do not have a direct policy lead.

The role that tax plays has been recognised. Important points have been raised. I want to have an opportunity to take those points away and come back to the committee to speak to how those factor into the considerations on rates.

As I have set out, the broad underpinning principle—the rationale—for the measure has been consistency with the rest of the UK. Correct me if I am wrong, but I think that the questions that the committee is asking are: has consideration been given to changing the rate to incentivise other behaviours, and how would that be balanced against any potential risk of waste tourism? Would that be a fair summation?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 5 March 2024

Tom Arthur

The question was about what the £235 million represents as a share of the overall capital allocation towards health.