Chamber and committees

That is a fundamentally important point. Given that we are in a time of financial challenge, I am not convinced that there will be significant additional funding—let us be realistic about it. However, if the money can be spent more effectively and efficiently, that would be good. I can only imagine how difficult it is for staff—wondering every year whether they will have job after the end of the financial year and having to wait months for the processes to work through. The situation really is unacceptable, so we must address it.

The Scottish Property Foundation’s submission says that

“resources should be directed towards areas of government dedicated to supporting economic development.”

I will put to you the question that I put to Mr Sim earlier. How much additional resource do you believe should be put into that, and where should it be funded from?

Thank you, Liz—your timing was absolutely perfect to the second.

I thank our witnesses for their very helpful evidence. As we have concluded our questions, I suspend the meeting until 10.45 for a break.

It is very helpful for you to put a sum on what you would require. In your paper, you noted:

“That capital review projects further real terms erosion of support for research and innovation over the coming years.”

The Scottish Government had a 9.7 per cent real-terms reduction in its capital grant allocation. How can you ask for additional funding in capital when the only way that the Scottish Government can meet its capital requirements at a time of high inflation is to borrow additionally, almost up to its limit?

Thank you for that response; it is helpful.

Paul Bradley, your submission says:

“This tough environment is preventing voluntary organisations from long term planning, as well as harming financial sustainability and predictability for lenders, and requiring the frequent and resource intensive process of chasing small funding pots at the expense of focusing capacity on service delivery.”

I think that we are all familiar with that situation. You go on to say:

“Ultimately this is hampering the Scottish Government’s ability to address its core priorities.”

In terms of the review, how can that situation be improved?

You are saying that there should be “a significant increase”—that there should be much more. How much more, and what does “significant” mean? Are you talking about 5 per cent, 10 per cent or more? Given that there has been, as I mentioned to Mr Sim, a significant reduction in the Scottish Government’s capital allocation—9.7 per cent in real terms—where will we find those resources? If the financial review is to look at things in the long term, we must be able to attach numbers or percentages on what we are talking about. The phrase “significant increase” does not mean anything to me. Statistically, a significant increase could be 1 per cent or it could be 10 per cent or 20 per cent. What do you actually mean, and how should it be funded?

I do not think that I will be able to pin you down much further. However, you mentioned enhanced borrowing powers. That is something.

Your submission mentions the prediction of a significant rise in non-domestic rates income over the next few years. A number of colleagues and I raised our eyebrows when we read that. You say in your submission:

“This implies an expectation of rateable valuation uplifts for commercial properties which may not materialise as the economy adapts to the post-Covid era, particularly if there is a reduction in the number of NDR producing commercial properties as buildings are changed to alternative uses.”

How do you see the market going? Do you feel that the predicted rise in non-domestic rates is achievable? Is it realistic, will things stay much the same or will they deteriorate? What does the SPF feel the position is and how would that fit into the Scottish Government’s framework?

Perhaps the review needs to be more ambitious in that context.

I have taken up enough time and, obviously, I need to let my colleagues in.

The COSLA submission also says:

“The framework also fails to recognise the impact of structural change on current services and the resource implications of establishing new structures”.

What are those resource implications?

I welcome to the meeting our second panel of witnesses: Paul Bradley, policy and public affairs manager at the Scottish Council for Voluntary Organisations; David Melhuish, director, Scottish Property Federation; and Alastair Sim, director at Universities Scotland.

Thank you all for your written submissions to the inquiry. There are no opening statements so we will move straight to questions.

I will begin with Universities Scotland. I found all the submissions to be really interesting and there is a great contrast between them, so the committee will probably ask you all a similar number of questions.

Mr Sim, your opener is quite direct. The last paragraph on the first page says:

“Put bluntly, other areas of Scottish public life that should be prioritised for investment, including higher education, look as if they will have to fight for the leftovers from the highest priority commitments.”

That is on the back of your saying that the Scottish Government’s priorities should include universities and higher education. The issue with that is that every single organisation—and I mean every single organisation—that comes to the committee says the same thing: we need more resources for our sector. You just have to fill in the name of the sector.

You have made arguments for why you think it should be the universities sector, but where should the resources come from, and how much additional resource should the Scottish Government be putting into the sector?

I appreciate that, and you have made a strong argument, but the two questions that I asked initially have still not been answered. How much additional resources are needed and from where should they come? In the earlier part of the meeting, we discussed preventative spend. A lot of the growth that you are talking about will not come this year or next, but the money will have to come out of the budget this year and next. Where should the resources come from? Local government has made a passionate plea and the SCVO is also keen to have additional resources.