Chamber and committees

Item 4 is an evidence-taking session with the Minister for Public Finance, Planning and Community Wealth on the Scottish Landfill Tax (Standard Rate and Lower Rate) Order 2022. Mr Arthur is joined by Mr Robert Souter, senior tax policy adviser, Scottish Government. I welcome Mr Souter to the meeting and invite Mr Arthur to make a short opening statement.

I certainly hope so. I would be surprised if that was not the case.

In your submission, you say:

“The framework document never misses an opportunity to complain about financial constraints, as if these were wholly attributable to present funding arrangements. This tone diverts attention from constraints which might plausibly be relaxed.”

I quite like that phrase. What kind of constraints are you talking about? Do they relate to local government, for example? Where could constraints be relaxed?

That is well put. Last week, John Mason pointed out that the University of Glasgow has got more in its reserve than the Scottish Government is permitted to keep in its reserve.

Emma Congreve, what is your view on the points that have been raised so far?

Yes—I understand that. That is a good way of putting it.

I will ask Emma Congreve a question and then ask Professor Heald to wind up on it. After that, we will move on to questions from colleagues around the table.

Emma, Professor Heald says in his submission:

“An important feature of the 1999 devolved fiscal settlement was the relatively clear distinction between functional expenditure which was devolved and that which was reserved. The aftermath of Brexit is blurring this distinction”.

He says that that

“weakens lines of accountability”.

Do you agree?

No one ever tells us where we should disinvest; people only ever tell us where we should spend additional money. Then, when the Scottish Government says what it thinks money should be spent on, people criticise its expenditure priorities, despite the fact that no one ever says what the money should not be spent on.

Professor Heald, do you want to have a go at that? Should we disinvest in one area and invest more in another?

Thank you for that opening statement, minister. Before we go any further, I note that committee members are extremely appreciative of the steps that you and your officials have taken to provide so much detail for this spring revision. It is more detail than we have ever had before and I think that it reflects well on the Government, which clearly listened when the committee requested additional detail, so thanks very much for that. That is the view across the committee.

I have a few opening questions. The first one is about paragraph 15 of the finance update, which comes under A.2.2. There is a £217.7 million increase in the justice and veterans portfolio and, in relation to pensions, there is

“£183 million of additional funding for Police & Fire Pensions in Justice & Veterans.”

That appears not to have been anticipated, but one would have thought that pensions can be anticipated well in advance and it is quite a significant sum. Can you give us a wee explanation of that?

But in relation to pensions, you must know a wee bit in advance that folk are going to retire, surely? If it was a few million pounds here or there, I could understand—some people retire early because of ill health, for example. However, £217.7 million is quite a significant sum of money and one would have thought that a sum of that amount would have been anticipated well in advance.

Moving on, I note the reference in paragraph 17 to

“£40 million released from the Affordable Housing Supply Programme due to ongoing supply issues and the effect this has on the pace of delivery.”

Is that because the pandemic has led to construction difficulties? Is it your hope that that money will subsequently be put back into affordable housing?

I found paragraph 30 of section C.1 of the supporting document quite interesting. You say:

“The minor differences between the Scottish Government underspend as reported in the Accounts (and discussed in detail by Audit Scotland) and underspend against HM Treasury budget aggregates arise through a number of reasons; differing accounting and budgeting treatment of capital expenditure, differences in the scoring of working capital for nondepartmental public bodies and different treatment of expected credit losses.”

Having what are, in effect, two different systems obviously makes transparency difficult. Have there been discussions about, or is any work on-going, to try to smooth over some of those differences to ensure that we have a uniform method of accounting?

I would be happy for you to write to Liz Smith on that, minister.