Chamber and committees

In my opinion, the budget provides the appropriate resources to assist Covid recovery in a variety of policy areas. Covid recovery applies not just within the health service but in the education and justice systems. We have people who are waiting for court cases to be resolved that have been delayed because of Covid and I have to ensure that the burden of a victim is lifted by having those cases resolved. Therefore, I have to allocate resources to a wide variety of areas and have endeavoured to do that across the Government’s budget.

However, there is a finite sum of money available. I have chosen to expand the amount of money that is available by increasing tax on higher-income earners. I know that Mr Whittle’s party does not support that, but I have made that choice to maximise the resources that are available to invest in public services.

Yes, I think that the budget will reflect our ability to deal with the fallout, but I also have to be candid with the committee that it will take us some time to recover from Covid, because it has been a significant and disruptive force in our public services and our society.

The local government budget is going up by more than £550 million, so it is not being cut.

We remain committed to the policy concept of a women’s business centre. However, for completeness, it would be best to consider how we will take that forward in light of the review by Ana Stewart, once we have received it.

I certainly hope that that is it.

That is a fundamental and critical question for realising the opportunities that will arise in the offshore wind environment. I will just make one comment in relation to what Michael Matheson said yesterday about planning consents. I recognise that the issue is of great significance to ensuring that those who are involved in that activity are assured of an efficient and effective planning consent process to enable them to make decisions about the investments that they make within a reasonable timescale.

It is important to address the substance of Ms Hyslop’s question across a number of areas, such as the roles of colleges, the skills environment and the work of the Scottish National Investment Bank, to take just three particular elements. I do not particularly want to live by anecdote with the committee this morning but, as an example, I had a conversation that warmed my heart with an entrepreneur who is involved in the offshore wind sector and who wanted to develop a facility in Ayrshire. The particular skills that he needed were not available in Ayrshire, but he wished to pursue his venture in that area. He engaged in a constructive dialogue with Ayrshire College, and the college put in place a course to train employees to meet his requirements in partnership with the college.

That is a splendid example of the college sector adapting its provision to meet the needs of a substantial economic opportunity in its locality. That must be reflected and mirrored in other parts of the country. Ms Hyslop knows the college sector intimately, particularly that of her constituency of West Lothian, and she will therefore know that the outlook of colleges is that they wish to seize such opportunities.

The second area is skills development. Obviously, there has been some interruption to the progress of the apprenticeship scheme. Prior to Covid, we were on course to have 30,000 modern apprentices. Skills Development Scotland is now ready and programmed to deliver the 25,000 modern apprenticeships that are envisaged in the budget programme, and obviously they will be available to the renewable energy sector.

Thirdly, part of the Scottish National Investment Bank’s mission is to invest in the Scottish Government’s net zero aspirations. In my response to Mr Simpson, I cited an example of specific net zero related investments that the bank has made. The committee should be assured that investment vehicles are available to support and nurture the development of Scottish companies that can realise some of those manufacturing ambitions within Scotland.

That issue is considered by the Scottish Fiscal Commission when it looks at the tax propositions that we put forward. From that, we can deduce the impact that our measures will have on behaviour. That advice is available from the Fiscal Commission. It informs the expectations of revenue to be raised that are included in the budget proposition.

There will be a wide variety of considerations for any individual who is choosing a location in which to live and work, and they will be based on a variety of factors. As I set out to Parliament, the social contract that is available to people in Scotland offers a very different proposition, regardless of income. Many different questions about the quality of life and quality of location will be relevant to the decisions that people make.

I have wrestled with those questions for quite some time in my various areas of responsibility, and I think that the key thing that can help us to resolve them is having quality dialogue between businesses and those who are responsible for the development of skills.

Earlier, I cited an example from Ayrshire of exactly what should happen. A business wants to get off the ground and develop an opportunity. It wants to have skilled personnel but cannot find them, so it goes to a college. The college says, “This is what we’ll do”, and it gets it all under way. That is how we make progress.

In addition, there can be a lot of work and elaboration on the formulation of skills action plans and skills audits. Skills Development Scotland has led a really good piece of work, in different localities, that looks at skills development plans. Such issues are invariably resolved in localities—they have to be, because the level of geographic mobility in the country is relatively limited. We need to ensure that the quality of dialogue between businesses and providers is at the highest level possible.

I expect the first report to be published during this calendar year. The strategy was set out in May 2022, if my memory serves me right—

Let me be crystal clear—it is my hope that that money will be the last. The assessment by the yard of what it requires is what I have provided for in both the additional commitment of about £15 million that I have allocated in the current financial year and the sum that is provided for in the budget for 2023-24. I am responding to the plans that have been put to me by the yard. The Government scrutinises the propositions that are put to us. I hope that that is the last contribution that we will have to make.

As I have said, financial transactions are a slightly different proposition. However, I would make the wider point—I was very candid about this in what I said to Parliament—that inflation is sitting at 10.5 per cent, whereas the budget has not increased by 10.5 per cent; it has not even increased by the gross domestic product deflator, hence the real-terms reduction from 2021 to 2022. I cannot allocate money that I do not have, so there have been tough choices.

I have multiple pressures—we are in the Economy and Fair Work Committee, but the Health, Social Care and Sport Committee is probably meeting somewhere else in the building just now and considering the colossal pressures in the health service. All budgets will be an attempt to deal with financial strain when resources are tight. I have tried to strike the most reasonable balance that I can. I will not disguise the fact that organisations face financial challenges and that they will have to change the ways in which they are working. I was explicit about those requirements when I set out the budget proposition to Parliament.