Chamber and committees

Instead of my sitting here and wading through all the numbers that I have piled up in front of me, will you tell us what the differential would be in those years?

I am just wondering when we will get that, because that will enable us to compare the spend with other budget lines in the Scottish budget, which is of fundamental importance.

That is very helpful.

On Tuesday, I made a point about the assumption in the financial memorandum that, in the first eight years, expenditure will rise by 41.5 per cent across all areas of social care services—adult social care, children, families, justice social work and the service strategy. That includes the 2 per cent that you have allowed for inflation plus 3 per cent real-terms growth. That means growth of about 25 per cent to 2031-32. However, minister, you have already said that the extra £840 million that will be allocated to social care staff is a cash-terms figure.

How will that expenditure be protected in real terms if, at the end of the day, over this session of Parliament, you are talking about a 25 per cent increase only in cash terms? It looks as though separate measures are being used and that one of them is not being increased by inflation plus 3 per cent.

No—forget the original memorandum. I am looking at where we are now. What are the margins under the financial memorandum now?

Sure.

There is also prevention, of course, if the system is implemented. John Mason and I have been on this committee for a long time, and we discussed exactly the same thing in 2011 and 2012. Unfortunately, the delivery of prevention seems to be a different ball game from talking about it, because the delivery is just not happening to the degree that we want it to.

Thank you for that opening statement.

Over the 10-year period, total costs under the revised proposals will now amount to between £631 million and £916 million, which is a variance of around 45 per cent. The estimated costs over the equivalent 10-year period were between £880 million and £2,192 million, which is a variance of around 150 per cent, so there has been a huge improvement in terms of variance and in what costs have been assessed as.

As you said in your opening statement, that means that the revised proposals represent substantially lower overall costs, which are estimated to be between £249 million and £1,276 million. If the committee had accepted the previous financial memorandum, over 10 years the Scottish Government and the Scottish Parliament would have been between £249 million and £1,276 million worse off, and we would have had all the issues of transfer of staff and so on, which will now not be included in the bill.

However, the central issue that we are dealing with is that, given the dramatic changes that have been made to costings and the reassessment by the Scottish Government over the past year or so, how can we have faith in the figures that are being presented for that 10-year period?

Thank you for that. I note that in the financial memorandum, in every area of cost, from financial year 2023-24—the current year—until 2031-32, which is an eight-year period, it looks as though there will be a 41.5 per cent estimated increase in costs. That appears to be assessed by assuming a 2 per cent inflation rate plus a 3 per cent increase in real terms. Therefore, we are talking about a 25 per cent increase in real terms. Given the fact that the Scottish budget is not growing at 3 per cent a year in real terms and is—it seems to me—unlikely to do so, how can you be confident that those figures are sustainable and deliverable?

Yes, but I just do not know how that will be sustainable, given the current projections by the Scottish Fiscal Commission.

You talk about CPI, and the committee has discussed types of inflation. Whether we like it or not—I am not one who really likes it—using the GDP deflator is unrealistic, especially when we think, for example, of salary increases in the past year or the expense on capital.

However, the reality is that the Scottish Government has used the Treasury GDP deflator across its current budget. It just seems to be a wee bit out of kilter to use a measure that other areas of the Scottish Government do not seem to use. Why was it decided to use the GDP deflator here when CPI is being used elsewhere in the Scottish budget? The issue that you talk about with salaries and so on is understandable, but that is the case with other areas of the Scottish budget. We still have to use the GDP deflator.

Is that inflator artificially low? Is it artificially low across the entire Scottish budget?