Chamber and committees

Okay. I absolutely agree with that, and I am sure that colleagues will feel that that would be helpful. Thank you for the evidence that you have given.

We move to agenda item 3, which is formal consideration of the motion on the instrument. I invite the minister to speak to and move motion S6M-10683.

Motion moved,

That the Finance and Public Administration Committee recommends that the Budget (Scotland) Act 2023 Amendment Regulations 2023 [draft] be approved.—[Tom Arthur]

Motion agreed to.

Thank you very much for that very helpful opening statement. I have already scribbled down a huge number of notes from the comments that you made. It would, of course, help if I could read my writing; that might make life a little bit easier.

I will start by referring to some of the evidence that we received a couple of weeks ago—obviously, you will be familiar with that. We took evidence from the local authorities of Dundee, South Lanarkshire and West Lothian. It is fair to say that they are not so enamoured with the direction of travel, but they are definitely on board with the policy.

Obviously, the committee is concerned about finance and how things will be funded. Dundee City Council, which was the first to give evidence, said that there is “insufficient financial detail” and that

“the £70 million is not sufficient for all of Scotland.”—[Official Report, Finance and Public Administration Committee, 24 October 2023; c 1.]

It said that the finances that are being made available do not take into account the real cost of running the infrastructure facilities, that additional facilities and resources will be required to manage the facilities, and that that has not been taken into account. It went on to say that, in its view, the costs are underestimated to the tune of about 50 per cent—that is, the £70 million should be more like £140 million. How do you respond to those concerns?

It is to ensure that Scotland does not lose any money in its expenditure overall: is that correct?

Of course, local authorities want to be able to plan ahead. Just last week, we produced a report on the importance of forward planning. In their evidence to us, which you will be aware of, local authorities said that they do not feel that they can do that if they do not have a commitment that the resources that they require will be made available.

Kirsty McGuire of South Lanarkshire Council said:

“Co-design is where we want to be.”—[Official Report, Finance and Public Administration Committee, 24 October 2023; c 9.]

The resources to be able to deliver that have to be available, but she and the others who gave evidence said, “I’m sorry, but the money just isn’t going to be there to deliver this.”

Let us consider enforcement officers, for example. The costs in the financial memorandum for enforcement are only about half of what the witnesses suggested the real costs would be, and the suggestion in the financial memorandum that 100 per cent of the littering fines would be collected bears no resemblance to the 10 to 15 per cent that the witnesses thought would be collected, based on their experience. Indeed, local authorities get nothing back from fiscal fines.

How do you address the cogent points that our witnesses made two weeks ago about some of those issues?

Okay. I will move on a wee bit from that to the area of co-design. You have emphasised a number of times the importance of co-design. I have already pointed out that local government is keen on the co-design element, but there are still one or two issues in relation to that. For example, Charlie Devine of Dundee City Council said:

“I think that co-design at this level would be really difficult and it would probably lengthen the process considerably … The co-design thing can be as big and complicated as you want to make it.”—[Official Report, Finance and Public Administration Committee, 24 October 2023; c 28.]

There is a real fear that we will still be discussing the secondary legislation on co-design many months into the future.

Kirsty McGuire of South Lanarkshire Council said:

“It is pretty difficult to attribute costs when you do not have the full picture. We do not know what the secondary legislation will look like, what form the other legislation will take or what form the EPR scheme will take.”—[Official Report, Finance and Public Administration Committee, 24 October 2023; c 27.]

Even with co-design, there are considerable concerns that we could be going down a rabbit hole with no clear ending. When will the co-design process be concluded? When would you like to conclude that in order that we can get some of the positive aspects of what the bill is intended to achieve up and running at the earliest possible opportunity?

In your opening remarks, you mentioned the £1.2 billion per annum that is expected to be brought in through EPR. However, a concern of our witnesses was how that would be distributed to local authorities. For example, that is a UK provision, so how would Scottish local authorities gain from that? What would be the mechanism? Obviously, we want to have certainty about that for forward planning purposes.

Thank you for that—as always—helpful opening statement, minister. When we look at the top-line figures, what is interesting is that, although the addition is around £361 million, which is about 0.6 per cent of the total budget, once again we see considerable movement within portfolios. There has been, over the years, as you said, a difference between policy intention and delivery. If we look, for example, at health and social care, we see movement of about £1,059.6 million into other portfolios. There are detailed explanations of that; I am heartened by the information that the minister and his officials can provide. Compared with how it used to be, the information that is provided is, obviously, very extensive.

When we are looking at movements of such scale in-year, would it not be better, in terms of delivery, for the funds to be baselined into the areas where they finally end up? Many of those movements appear to happen almost annually. It almost seems as if, when the policy intention is created, there is a real mismatch between it and, ultimately, delivery. What is your comment on that?

However, £44 million is quite a substantial percentage of that, which is why one asks why that cannot be envisaged at the start of the financial year. As I said, if it was just £1 million here or there, you might think, “Ok—fair enough.” It seems to be a significant amount that one would think could have been predicted when the budget was being drawn up, therefore we would not have to have the portfolio transfer that we are witnessing now.

Colleagues around the table will want to dig into some of the figures. I will just touch on a couple of them, especially given the fact that I overdid it in the last session. [Laughter]. I will give folk a chance to claw back some time.

Under rural affairs, land reform and islands, I will not go into detail other than to mention that you have said the portfolios were reduced by £31 million as part of the budget revision, and you gave some context to that. You also talked about services for agricultural support being reprofiled in future years with no loss of funding. Why does that change have to take place in the first place?

Hold on a second. If you are taking actions, the costings have to be realistic. The point is that local government is saying that the costings are not realistic. Therefore, even if councils agree to take things forward to the nth degree, which is what they want to do—nobody wants to have contaminated waste, and everyone wants to maximise recycling: that is a given across the Parliament—that has to be funded.

Each local authority is different. For example, Dundee City Council talked about half of its citizens living in flatted properties. Enforcement and behavioural change are extremely difficult, and the cost of educating people will be extremely difficult to meet if we are going to get the long-term behavioural change that we want. Councils have said that they are putting huge amounts of money in, but they are still unable to reach recycling targets and they need additional resources.

We know that the bill is a framework bill, that there will be co-design and that there is going to be secondary legislation, but will the Government make a commitment up front, through the Verity house agreement or whatever, that, if its partners in local government go down that road, they will be funded? Local authorities will be quite reluctant to go down that road if they think that they will not be resourced to do so. It is one thing to say that it is up to them to do this or that, but they cannae do it if they havenae got the money. That is why they want a commitment from the Government that they will be funded.

Local authorities want realistic funding, not an airy-fairy promise that they will collect 100 per cent of fines when that has never happened and never will happen. It has to be realistic, and our concern is whether the financial memorandum is realistic. The evidence that we have suggests that there are elements of it that are not realistic, such as the examples that I have already given.