Chamber and committees

The main point that I want to come to is on five-year carbon budgeting. The committee has had written and oral evidence about the pros and cons of moving to five-year carbon budgets. One of the concerns around the five-year carbon budget process is the risk that we could go through a five-year period before we come to a point where we realise that we are not making sufficient progress and have failed to achieve what we intended to in that five-year period, because we have moved away from annual targets.

Some other jurisdictions have put in place a mechanism that allows on-going scrutiny and accountability around progress that has been made during the five-year period of the carbon budget. What are the Scottish Government’s plans to put in place, with the carbon budgets, a process that allows us to have a clear line of sight on the progress that has been made in individual policy areas? Once the carbon budget is in place, how do you intend to facilitate that on an on-going basis?

That is helpful. Given that carbon budgeting will require greater buy-in from individual portfolios and greater budget allocations in order to meet their sectoral responsibility, do you envisage a process in the annual reporting that will allow us to see the progress that has been made in individual portfolios against the target that they should be looking to achieve?

You could, though. That is the point. You may say that you will not do that, but you could. Potentially, developments could accumulate over five years if there is not a legal obligation to take clear corrective action to get things back on course in the way in which section 36 requires.

I am not arguing that point. I am making a point about the legal corrective action that you are obliged to undertake at the moment. Where good-faith actors are seeking to achieve those targets, they will obviously take that work forward. From the Parliament’s point of view, should someone—or a Government—not be a good-faith actor in pursuing those targets, there is no legal lever to require them to take the corrective action.

I am just posing a question. I understand, from the evidence that we received earlier, that in Germany, if it is clear, for two successive years, that a gap is opening up, there is a requirement for the Government to bring forward its equivalent of a section 36 report in order to show what corrective action it is taking. That does not need to happen every year; potentially, within a five-year carbon budget, that would happen a maximum of twice. Is there a need for a legal framework that forces corrective action when it is clear that not enough is being done? Is there a need for a provision in the legislation that would help to facilitate that and give Parliament reassurance?

Good morning, and thank you, convener. The only matter that I wish to draw to colleagues’ attention is that I hold an honorary fellowship from the Chartered Institution of Highways and Transportation.

Thank you, convener. It is just a brief supplementary to follow up on Douglas Lumsden’s question about section 36 reports. If a section 36 report can only be made after a five-year carbon budget has been implemented, what happens in the intervening years if, for example, the annual figures that we receive each year demonstrate that insufficient progress has been made? Where is the legal lever to require the Government to take corrective action to get progress towards those targets back on track if there is no section 36 report until the end of the five-year period?

Okay. If the principle is that it is a continuing duty, why would you wait until the end of the five-year carbon budget period to introduce corrective action, in the way in which you would with a section 36 report?

You could.

Okay. Through the spending review 2022, we tried to set out an indication of budget for a three-year period. The problem is that we get only an annual budget, so we do not know what next year’s budget will be. The challenge is the way in which the UK fiscal environment operates—it works annually. It is very difficult to give a commitment on what will happen during the next financial year when we do not even know what our budget will be for that year.

However, I agree with you that if we could get into a cycle in which we were able to provide a much clearer indication, during a three-year period, to allow organisations to plan more effectively, that would probably be a much more efficient way to manage services. It would give them certainty. However, the principal challenge that we have is that we have an annual budget, so we do not know what our budget will be the following year, which makes it almost impossible for us to make commitments into the following financial year. I agree with the premise that if we could do that, we should. However, fiscal change at UK level would be required to give us certainty during a three-year period.

Boards have been expected to make recurring savings for some time now, so it is not new to them and they are well practised in it. It is key to ensure that there is a focus on efficiencies in boards. We discuss that with boards regularly, at executive and non-executive level, to ensure that they are looking at expenditure to achieve efficiencies where they can. That is no different during this financial year, and in some cases it is more important than ever, given the very tight financial environment in which we are operating.

Given the level of expenditure that boards have—more than £14 billion of taxpayers’ money—it is important that we apply targets to them to ensure that they are driving efficiencies in the system where they can. That is not money that is lost to the system; it is money that is used in healthcare, but it allows us to ensure that we are getting as much efficiency out of the investment that we are making as possible. It is important that boards are given that challenge.