Chamber and committees

I am more optimistic about taking forward the work of the Christie commission than Mr Whittle is, because I think that a lot of good stuff has been done over the years. I am not going to sit here and say that everything has been done or that as much has been done as I would like to have been the case, but I think that a lot of proactive, early intervention work has been undertaken. However, we need to do more of it, and the Covid recovery strategy and the focus on specific tangible measures for doing that is the focal point of that activity.

The crucial point—and I have aired this with the committee before—is that we have to remain absolutely focused on the central purpose of that activity, which is to reduce inequality in our society. Inequality was in existence before Covid and got worse during it, and we now have to use Covid recovery to address the situation.

Education maintenance is an entitlement, so, should an individual apply for it, they must get it regardless of the size of the budget. We do our level best to estimate the likely demand for education maintenance allowance. Historically, the budget line has been underspent, and one of our obligations in our approach to the management of public finances is to follow the guidance that budgets should be taut and realistic. In the circumstances that we are in just now, when I am having to take resources from one area of the Government’s budget to allocate to another—to pay public sector pay claims, for example—and I have to find money to do that across different areas of Government, I have to ensure that there is budget clarity for accountable officers to make it clear that they have the necessary finance to spend. Therefore, if I have £3 million in an education maintenance allowance budget line that I do not think I will require, I can take that away and put it somewhere else, such as to address public sector pay claims, and that will allow me to support accountable officers to fulfil their obligations.

Obviously, we have made a judgment that is based on the best evidence that we have available to us. Should the total cost for education maintenance allowances be greater, I will have to address that financial pressure during the course of the financial year. All the budgets are monitored daily, and the information is provided to me to enable me to make judgments about where it is appropriate for us to reallocate expenditure to meet financial pressures.

However, I stress that the education maintenance allowance is an entitlement, so, if demand outstrips the £22 million that will be retained in the budget, I will have to find the resources to accommodate that. Based on previous years’ experience, that is an appropriate judgment to make.

We are, but we are trying to do so in a way that protects the fundamental values that we believe in and the fundamental elements of our programme for government. Emma Roddick will be familiar with the programme for government that was set out at the beginning of September. It develops the thinking that emerged from the Government’s manifesto for the 2021 election, which was based on, essentially, ensuring that we secure a fairer and a greener future for individuals in our society. Those priorities and those values were reinforced by the Bute house agreement with the Scottish Green Party, which flows into the programme for government.

We are setting the direction, which is about ensuring that we create a fairer society, that we make the transition to net zero and that, in doing so, we create new and sustainable employment opportunities in Scotland. Those are the underpinning values, and the decisions that I am taking are designed to protect that programme as much as possible. Clearly, however, the decisions that I have had to take put significant financial strain on the Scottish Government.

Yes, because it is a demand-led budget, so whoever is entitled to it will get it. It is simply about making sure, given the degree of pressure that I am having to deal with within this financial year, that I do not allocate money into budget lines in which it is unlikely to be required when it is required in other budget lines.

In my letter to the Finance and Public Administration Committee, I have set out the specific changes that are being made. If further changes are to be made, I will do that transparently.

I have been completely open with the Parliament. There is no obligation on me to come to the Parliament in September with the statement that I made. I could have left it all to the autumn budget revision. However, I have a duty of candour to the Parliament. It should hear the issues and difficulties with which I am wrestling. Those should be set out to members. Any further changes of that nature will be set out in a similar fashion.

The judgment that I was making there was based on looking at the available data on the levels of usage of public transport in the current context. We fixed our budget—obviously, concessionary travel is a crucial social and economic benefit in our society—and made our best estimates of what we reckon will be the uptake of the concessionary travel scheme.

We looked at the data that is available to us through the financial year showing the degree to which people are returning to public transport in the aftermath of Covid—there is obviously a degree of nervousness or anxiety about using public transport—and made a judgment about where we think that demand will eventually settle.

Again, there is a degree of judgment involved here and, ultimately, if we find that the budget line exceeds what I have predicted in the latest update, we will have to meet that cost from other areas in the budget. However, I hope that the steps that we have taken will be appropriate and that the predictions about the budget will have the necessary accuracy.

I am aware that different approaches are taken in different parts of the country to what support is available to people—for example, the arrangement for my son’s national entitlement card was handled through the school and done very efficiently. It was a totally straightforward process and there was no difficulty whatsoever, and he is now using his national entitlement card with some gusto.

Given that the scheme has been open since only January, there have been high levels of uptake in a relatively short space of time. We are promoting awareness of the national entitlement card among young people, and we encourage them to take it up. We make necessary judgments about the volume of usage, which allows me to make the judgment that I have made about the size of the budget.

The £82 million is a product of decisions that were taken by the United Kingdom Government, which gave rise to a consequential. As members know, those consequentials come into our budget but they do not come in with a badge on them; they come in as consequentials and we decide their allocation. Obviously, a range of measures to assist with the cost of living challenges are provided in Scotland that are not provided in other parts of the United Kingdom, and we have allocated resources for those measures. The £82 million had been allocated into the Scottish Government’s budget to help us meet the various elements of expenditure that we put in to support our programmes that assist with the cost of living and other matters.

I would pause before adding the two numbers together, Mr McLennan, if you will forgive me. The point that I am making is that, whatever we say about the erosion of value, £700 million in hard money, which we did not anticipate at the start of the financial year, has to be found in the budget, which has to balance by the end of the year. That is the challenge with which I am trying to wrestle.

I will come on to that. Looking at the comparative example from the Republic of Ireland, dramatically different decisions are being taken by an independent country that is in close proximity to us and has made different constitutional choices. There is an important lesson for us in that comparison.

I am very happy to engage with all groups as much as I can on the issues. I listen to people’s perspectives, and I think that I have a track record of listening to different views. When I was finance minister, I enjoyed my interaction with the Women’s Budget Group; I have huge respect for its work and have valued it enormously. However, I have to make this point to the committee bluntly: if people are going to complain about the choices that I have made, they have to give me alternatives.