Chamber and committees

We have given the SNIB the vast bulk of the financial transactions that we have available to us. However, remember that, as we have discussed previously, UK Government financial transactions have gone off a cliff. That is unfortunate, because the two areas of spend for financial transactions have traditionally been the affordable housing supply programme and the SNIB. We have prioritised the SNIB for the financial transactions that are available to us. That means that the affordable housing supply programme has less available to it in financial transactions.

The supplementary estimates that I referred to indicate a £64 million reduction in financial transactions that we will have flexibility to manage in 2024-25. That will heap pressure on the areas of the Government that use financial transactions. The additional pressure of managing that further reduction in financial transactions is now in the pot. We will have to assess that once we see the full picture in the spring budget on 6 March.

I make the point that FTs are a useful source of funding. We have traditionally utilised them well in the two areas of spend to which I referred. When they are significantly reduced, that has an impact. Because of the capital position—a 10 per cent reduction in capital availability—we are not able to supplement the reduction in FTs with traditional capital. Those things have an impact, and that is the impact that they are having. If the position changes in the spring budget, we will want to revisit it, because we recognise the importance of the SNIB.

I am not sure that I would put it in those terms. Social security funding is a key priority and an investment for us. It has clearly been an area of growth, as we introduce new benefits and make changes to existing ones. As you are well aware, that has led to significant expenditure and commitment beyond the block grant adjustment from the UK Government.

Important work is being undertaken on longer-term sustainability to ensure that social security funding can continue to deliver what it needs to deliver. That will mean ensuring that there is efficiency, that measures are effective, that the decision-making processes are as good as and as effective as they can be, and that the new benefits, in particular, are delivered in a way that is fair to everybody. We need to scrutinise delivery of social security, and we need to ensure efficiency and effectiveness within the system.

Is there an open cheque book? If that is what you are asking me, the answer is no. Social security funding is a priority, but we need to ensure that it is sustainable in the long term, so a lot of work is being undertaken in that respect. As we recognise, and as you and external organisations will point out to me, the future growth of that requirement is a key pressure on the Scottish budget, and we need to be aware of that.

Portfolios have had to wrestle with some very difficult decisions, because there is less money to go around. In fact, with the tax cuts that you are proposing, there will be even less—more than half a billion pounds less, I think—to spend on public services. Even with the tax position that we have proposed, which has raised £389 million of additional funding, difficult decisions have had to be made, with each portfolio having to make judgments about the areas that cannot be sustained and have had to have their funding reduced. The flexible workforce development fund has been one of those areas.

Despite that, we recognise that Scotland’s colleges are absolutely at the heart of the skills system and will be a major part of things as we move forward. We have the review of the skills landscape, and colleges will continue to play an important role within that.

There are hundreds of small pots of money across the whole of Government that all add up to a lot of money, and I guess that I took the strategic decision that I was going to prioritise front-line spend on our front-line public services. That required me to shift money in that direction, which makes things difficult for other areas of spend.

Would we wish it were otherwise? Of course, but when you get less money, there is less money to go round. As a result, every budget has to be looked at, and the strategic priority was front-line spend on our public services. I note that, again at an evidence session, we have not heard quite so much about the front-line spend on the NHS, on the police or on fire, and I suspect that that is because those are the areas where we have prioritised spend.

Instead, what we are hearing about are those areas that have had to take a hit as a result, one of which you have highlighted. If you want to come to our meeting to suggest that that should be the priority that you would like to be addressed and to highlight other areas where we could make changes, I will of course be happy to hear what you are suggesting.

Our higher education institutions will, as ever, have a challenging set of circumstances to wrestle with. One of the circumstances, which members will be aware of, is the restriction on international students. I am not downplaying those factors, which are all at play for universities, but they will have to manage the levers that they have to find a path. Larger universities probably have the ability to do that more readily, and perhaps there are some particular challenges for some of our smaller institutions compared with the larger ones, but I do not downplay the pressures on our university sector. We have supported it as best we can with the available resources for funded university places, and we have given it the best support that we can, given the limitations of the budget.

Discussions with the sector will continue, and of course we want to try and be as helpful as we can, but you are asking me to lodge amendments to take money from elsewhere to give to the universities. If you can suggest where that money should come from, I am all ears.

It is. As I have just said, conversations with the sector take place on an on-going basis. I have had individual discussions with some institutions as well, and of course the issues you mentioned have been brought to the fore.

Until 6 March, though, I do not know whether the money that we have in the budget now is going to be there, let alone whether we will have any additional funding. There could be a scenario on 6 March in which the UK Government makes decisions that could impact negatively on the funding that we have available. I hope that that is not the case, but we will continue to discuss with those in the higher education sector and others how we can work with them. If there are things that we can do that are helpful, beyond trying to find money that does not exist, then of course we will do them. There may be other things we could do that could be helpful to them.

As I said, the Scottish Funding Council is in the process of producing the academic year 2024-25 indicative allocations for both colleges and universities—last year it produced those in the spring—which will provide the detail that you are looking for about funded university places. That is expected in the spring of this year, as it was in the spring of last year.

During the last session, we spent a lot of time talking about the 1,200 places for universities that—as Universities Scotland has been very clear—were Covid additional places and were never envisaged to be there for the long term. It always knew that those places would be reduced, and the timeframe for that was always very clear. We will allow the Scottish Funding Council to get on with the job that it does every year.

That is how it works.

The Scottish Funding Council will discuss the number of places with colleges and universities, which will be within the overall budget that has been allocated to colleges and universities, but you are asking me about additional money in an environment—