Chamber and committees

Could I come in on that point, convener? You alight on an important question.

I am not familiar with the status and nature of ACS. However, at the business in the Parliament conference, I had the privilege of talking to the chief executive of Dovetail Enterprises in Dundee, which is a furniture and mattress manufacturing facility. I think that it would be fair to say that Dovetail Enterprises is a social enterprise—that would be the best description, as it reaches out to create economic opportunities for people who are often remote from the labour market.

One of the projects that the chief executive talked about was the company’s success in landing the contract for furnishing and equipping the Social Security Scotland offices in Dundee. Having been in those offices a few weeks ago, I can attest to the quality of its product. That was a perfect example of how public expenditure through public procurement done properly can result in beneficial social and economic outcomes. There are people who are in the labour market or actively engaged in labour who would not be, were it not for the degree of support that they have had through employment at Dovetail Enterprises. It will be exactly the same in the example that you cite, convener.

That goes back to one of the points that Liz Smith made to me in a slightly different context. It is for employers to think about how they might be able to engage and activate people who are not active in the labour market and for them to be open to doing that. Not everybody will be prepared to work with ex-offenders, but we need to help people to get their lives back on the road.

Come on—I think that we are really stretching this point. The sum of money that I have put on the record is in close proximity to the lower end of the range in the financial memorandum. I think that we are at risk of making a mountain out of a molehill here.

Essentially, the Scottish Government and the UK Government have communicated the topics that we are interested in pursuing. We have not been able to make headway on that, largely because—and I am not saying this to point the finger; it is just an acknowledged reality—there has been an awful lot of change in the UK Government and a lot of other issues to wrestle with.

I will see the Chief Secretary to the Treasury later this week, so I will have the opportunity to pursue some of those discussions with him. I look forward to that conversation, because I am sure that we can make some progress. I can keep the committee up to date on any developments that emerge. I do not think that there are any blockages, but an awful lot of other things have had to be sorted out. Given what has happened in the UK Government in the past few months, I quite understand that the Treasury has had significant issues to wrestle with, and this is not mission critical.

The UK Government is committed to the fiscal framework review. I take that at face value. We will embark on those discussions in the most constructive way we can.

I would think that the maximum cost in terms of the next financial year is likely to be a figure no higher than about £50 million. The financial memorandum will give greater confidence around that point.

Those things—any annual or periodic revisions of capital frameworks that are put in place by the UK Government—are tied up with two things. Part of my challenge in this financial year has been that we have had no restating of the budget in the light of the significantly different inflation climate that we face now, compared with when the budget was set. I rehearsed those issues with Liz Smith the previous time I was at the committee.

The budget was set in late 2021, in a context when inflation was benign. Since then— for the whole of this financial year—we have faced raging inflation, which is partly why I am wrestling with the issue that you raised with me in your first question, convener, about the financial pressures in this financial year. There has been no restatement of the budget to take account of that factor. Some of the solution could lie in a restatement of the position.

The other area is the review of the fiscal framework, which is in more of a procedural space where borrowing limits could be revisited and recast. There are discussions to be had with the UK Government on the fiscal framework, and those are at a very early stage.

Frankly, I would question the value of any conversation with most of the people I have been dealing with over the interim period during which I have been acting as finance secretary, because of the degree of churn, if I could put it as delicately as that.

Local government has raised those issues with us, which are a subject of discussion with the Cabinet Secretary for Education and Skills; she will make a statement to Parliament today on the subject.

Just so that we are all on the same page, there are, as a matter of fact, 32 local authorities.

I do not think that I could say that we have issued a formal directive to all public bodies on that point, but those are well-established practices that we would expect leaders of organisations to undertake because of the fundamental point that I made to Mr Johnson that non-employee payroll costs are higher than employee payroll costs. In terms of the prudential management of public finances, we would expect individuals to undertake that.

In relation to the Scottish Government, we have headcount controls in place. We are working to reduce overall staff numbers. Actually, I will express that differently. We are working to contain staff numbers. We have increases in staff numbers because, a few years ago, we were not responsible for any aspects of social security. As we now have responsibilities, we have got more employees as a consequence. We are trying to reduce those costs and we have formal headcount controls in place that require appropriate sign off in the organisation.