Chamber and committees

I will share some anecdotal information. I watched a BBC programme about fly-tipping. It covered England, but I do not think that the situation will be much different in Scotland. Some businesses feel that they are very highly regulated as a result of the increase in fly-tipping but that SEPA almost turns a blind eye to those who are not. Therefore, revenue from the tax is decreasing not just because less waste is going to landfill but because more waste is being thrown over hedges and dumped in fields.

I think that you have got that point across. We all accept that that is the case in some areas. I do not want to put words in Mr Neill’s mouth, but I think that he said that, as the quality of recycling has improved, the difference between virgin aggregates and recycled material has narrowed and, in some areas, has become marginal. Am I right in saying that, Mr Neill?

Thank you very much. In time-honoured fashion, we will go through some of the changes to try to get further information and elaboration on how decisions have been made and what the impact will be. I start off with NHS recovery and the health and social care portfolio. The additional funding includes £514 million of resource and £235 million of capital. The budget is a wee bit coy about what that will be spent or invested in. Could you give us a bit more information?

Indeed, but the £235 million of capital funding interests me because, as we know, there has been a two-year moratorium on new capital projects in the NHS, although, of course, there is still money being spent on care and maintenance. What does the £235 million represent as a share of capital allocated to the NHS and what is it being invested in?

Thank you for that clarification. One of the issues that we have discussed at this committee is the long-term financial sustainability of the public finances. We see that there is a £284.2 million increase for social security on a budget that is already growing very dramatically. Can you talk us through that and why there is such a huge differential between what was anticipated and what is now having to be spent? It seems a huge difference.

Under the next agenda item, we will take evidence from the Minister for Community Wealth and Public Finance on the order. Mr Arthur is joined by Robert Souter, who is a senior tax policy adviser at the Scottish Government. I welcome Mr Souter to the meeting and invite Mr Arthur to make a short opening statement.

You are basically saying, as you do throughout your submission, that at 89 per cent we are almost in effect reaching the optimum amount, if you like, of what can be recycled. Therefore, any additional taxation that is imposed, should the Scottish Government’s bill plan to diverge from the UKAL—it does not plan to do so at this point, as far as I am aware—will not deliver any further recycling.

In one breath, COSLA is saying that it is not keen on the aggregates tax going up, because local authorities purchase large quantities of primary aggregates and there would therefore be an impact on their cost base, but, at the same time, COSLA wants to encourage greater use of recycled aggregates. Are those not contradictory objectives, given the fact that the levy is required in order to create a cost differential so that companies can invest more money in equipment for recycling?

Mr Doak, in paragraph 16 of your submission, you say:

“English producers may be keen to exploit any substantial increase in rates in Scotland.”

That depends on what you mean by “substantial”. What would you describe as “substantial”?

My understanding is that the Scottish Government does not intend to do this, but what if, for example, it decided to increase the rate from £2.03 per tonne, which is what it will be from April, to £3 per tonne? Given the cost of shipping or trucking aggregates, would an increase of £1 per tonne really mean that people would be shipping vast quantities of aggregates into Scotland? I would have thought that the cost of the shipments would be much higher than £1 per tonne once the fuel, the lorry driver and so on had been paid for. There are also not many highly populated areas near the border between Scotland and England; most of the cities that would use the aggregate are further south.

Therefore, would such an increase have a real impact? In other words, what is the elasticity of demand? Conversely, if the Scottish Government reduced the tax to £1 per tonne, would there suddenly be huge demand for Scottish aggregates in England? That seems a bit unrealistic—we are talking about £1 per tonne. I am struggling to see how changing the rate in either direction would have a major impact.

Private companies and local authorities are very responsible in how they deal with waste; they follow the regulations that apply. Have there been any prosecutions of unlicensed and unregulated dumpers?