Chamber and committees

That has been the whole debate.

No, not to the full extent. The groundwork had been done, but the big uplift in spend in Social Security Scotland’s infrastructure had—thankfully—not been made, and we were able to stop that in its tracks.

You are suggesting that we should go ahead and deliver the benefit, for one year—

We can come back with that.

It is just supporting the budget, in terms of reconciliation—

The issue is in which year it is lost to the budget and in which year it is reconciled. Is it to be lost to the budget this year or next? That is the question.

I go back to the point that we could not possibly deploy the funding to set up a system to make a one-year payment. That would just not be right.

The question of in which year the money is lost from the budget—this year or next—is a technical point about reconciliation.

We take a very prudent approach to borrowing, and we set ourselves internal rules around what we think is prudent. Essentially, that is, if you like, the landing spot for those internal guides. Jennie—do you want to come in on that?

I have said on a number of occasions that housing investment is a key priority for capital. We have faced two things. The first is the cut to 8.7 per cent to CDEL. On top of that, there is the 62 per cent cut in the financial transactions budget, which underpinned the affordable housing supply programme.

We raised that issue directly with the chancellor and asked for her view on financial transactions and whether the new UK Labour Government would take a different view on them. She said that she would go away and look at that. We will continue to pursue that, because the financial transactions budget underpinned our affordable housing programme, and replacing it with CDEL would have meant making swingeing cuts elsewhere. I need to see how those various discussions play out, as well as considering the point about the fiscal rules and what the capital outlook looks like.

I know that my colleagues Shirley-Anne Somerville and Paul McLennan have been looking at how they use some of the funding to lever in private sector investment. They talked about how the £100 million that they were looking to invest would lever in £500 million, which would deliver 2,800 mid-market rental homes. We need to be imaginative about how we grow that pot to deliver across all levels of affordability. Obviously, that is not social housing, but it is affordable housing and it meets a big need in the market.

In short, housing is a key priority for us. The Cabinet has to have discussions about the budget and relative priorities, but everybody has been very clear that it is a key priority.

I raised that directly with the Chief Secretary to the Treasury. Our understanding, and what we have been told, is that all the city growth deals that were signed are fine.

The Argyll and Bute deal was not signed—that was a timing issue—so it is on hold, if you like. The Scottish Government has committed our share. I raised very directly with the Chief Secretary to the Treasury the need for certainty and a swift resolution, because it is a bit unfair if it comes down to just a timing issue.

There is a question mark around other funds, such as levelling up. My view is that, despite all our reservations about the way that funds were deployed—I think that somewhere in the Borders is a roundabout that was purchased by the UK Government—we need to be more strategic about the use of our collective capital. However, I do not want money that was promised to towns, cities and communities to be taken away. That is a non-starter. We need to have clarity, and then we need to spend those resources in a much more strategic way. I am very much up for that.

As a tangential point, I also made it very clear that shared prosperity funding, for example, has to be routed through the devolved Administrations. Everybody around the table said that to the chief secretary. We need to be able to use all those resources in a more strategic, coherent—

You will understand the complexity of the issue, not least because we need to make sure that the Highlands and Islands are protected. We have continued to discuss the subsidy control regime with the UK Government. Obviously, there is a new Government, and we are engaging with it to see whether we can move things forward.

We will set out the high-level principles of the air departure tax, including—importantly—how it will support emissions reductions. We will do that as soon as possible, and we will review the rates and bands, including the rates on private jet flights, to ensure that they are aligned with our net zero ambitions. That work continues, but we need to resolve the subsidy control issue with the UK Government.