Chamber and committees

The sum of £144 million that we have set aside in the budget is equivalent to a 5 per cent council tax increase nationally; it provides the money that would have been raised by a 5 per cent increase. If councils agree to that, more than two million council tax payers will benefit from a council tax freeze in 2024-25, which will provide much-needed financial relief, especially for vulnerable households.

As I understand it, the Fraser of Allander Institute figures included an allowance for the multipliers. There was a joint COSLA and Scottish Government consultation on changes to the system of council tax multipliers; there was very little support for the changes. The analysis of consultation responses has been released today. Of the 32 councils, only four said that they supported the changes. Because the changes were not supported, they have not been taken forward.

The sum of £144 million funds a 5 per cent increase in council tax across Scotland. I heard that in the previous evidence session it was suggested that some councils were talking about a 10 per cent increase in council tax. That might almost have been able to fly last year, with inflation running at the levels that existed then, but inflation is expected to be around 3 per cent, so it would be difficult for councils to talk about that sort of increase.

I think that the 5 per cent allocation is fair for councils across Scotland to fully fund the council tax freeze. I hope that all councils will take that up and that all council tax payers will therefore benefit from it.

I am not sure that the public fully understand the challenges of what Scotland is facing, based on what was agreed in the autumn statement. There were some headlines, but there were also devastating 10 per cent cuts to capital, for instance, and those things cannot simply be wished away. We have to deal with them, and we have to have a balanced budget in Scotland.

I think that COSLA and local authority leaders take a view in public. It is COSLA’s job to argue for local government, so of course it will argue for more money for councils. Having spoken privately to political leaders across the spectrum, however, I think that there is a recognition of just how difficult the statement was.

It is clear that political decisions have to be made. We are at stage 1 of the budget process, and there are suggestions for how the budget could be moved forward. I know that the DFM will have discussions on that with finance leaders in all parties.

I know that a lot of local authorities took the decision to move their services into ALEOs in order to get a more favourable VAT position. Maybe it would be better if we were able to have fiscal arrangements on VAT and non-domestic rates that did not distinguish between different set-ups, so that things could be done in whatever way was best instead of having to try to work around the system to make what is effectively public money circulate in a different way.

Ultimately, those decisions are for local authorities. I know that it is never easy, and I urge local authorities, and colleagues in the Parliament—particularly when they are looking at things such as leisure facilities—to do so through the eye of preventative spend, as we talked about earlier. In doing that, we need to ensure that we account for all the benefit of that spend. Sometimes it is more difficult to do that, and we look at things simply as a cost and do not actually manage to report the benefit to the local community or to the local authority or other service provider.

Nobody is suggesting that that is an easy fix. I know that some local authorities are considering bringing their ALEOs back in-house to ensure that they are more integrated with the rest of the council services.

As you have said, we have talked about that before. In general, there are three areas where there are particular pressures: environmental health; planning services; and building standards. As we have discussed previously, significant work is going on in all three areas to improve that aspect.

In environmental health, for example, a lot of work is going on. In addition to the work that we are doing directly with local authorities, Food Standards Scotland has awarded the Society of Chief Officers of Environmental Health in Scotland £0.25 million to provide funding to Scottish local authorities for sponsorship of trainee food safety auditors and the new qualification pathway to the higher certificate in food control.

In relation to planning—and we have discussed this in depth previously—we are continuing to engage closely with COSLA and Heads of Planning Scotland to understand the pressures on planning services. Action to strengthen the future pipeline of skilled planners entering and being retained in the planning sector in Scotland is a high priority for us, and it is a core part of the delivery of national planning framework 4. There are a number of actions, which we talked about just a couple of months ago. Those actions are on-going, but we recognise the challenges in that regard.

The third area—which, again, is outwith my direct portfolio—is building standards, and again, we are working closely with local authorities on that. Given that one of the challenges in the building standards sector is the profession’s profile and esteem, there has been a lot of focus on that aspect. One specific piece of work involves the ambassadors network, which is helping promote job roles and improve the profession’s attractiveness. As a result of the new modern apprenticeship pathway, which was introduced just last year, apprentices are now starting to come through.

We are taking action in those three areas, working in partnership with local government. We cannot simply take forward that work on our own—we have to work in partnership, as the committee would expect.

We effectively gave a heads-up with regard to high-level spending in the “Investing in Scotland's Future: Resource Spending Review” public document that was published in May 2022 and which looked at the Scottish budget up to 2026-27.

However, we are publishing a one-year budget for 2024-25 because, although we recognise the merits of multiyear budgets, the nature of the autumn statement and the Office for Budget Responsibility forecasts make future prospects more volatile. It could in fact be misleading, and more unhelpful, if we were to suggest that there was some certainty about the position going forward.

We will revisit the multiyear outlook in the next medium-term financial strategy, which is due to be published in May 2024. However, if we were to suggest that we could promise what was coming in the future, that might not be as transparent as it might at first appear.

As Councillor Hagmann said, that was an aspiration. If we had had the fiscal framework in place by September, it would have been able to feed into the budget, which would have been good. However, it is important that we get it right. A huge amount of collaborative work between the Scottish Government and COSLA is going into the fiscal framework, and that work will continue. As was said, we want to get it ready as soon as we can, but it absolutely needs to be right.

In the meantime, we have taken a number of actions in the budget that support some of the principles that we expect to be in the fiscal framework—for example, on ring fencing, £1 billion is being baselined, which is really important. It is important to recognise that there is no simple formula. There was a suggestion previously that we should just take a percentage of the Scottish budget. Well, this time, we have given local government a higher percentage of the Scottish budget, but it still does not meet the aspirations, because of what we are all trying to do across Scotland’s public services. The framework is important, but it is important that we get it right.

A huge amount of work is going on. The timetable is not in the Scottish Government’s gift, as we are working with COSLA—there are two partners.

Ian, is there anything that we can add?

In line with the Verity house principles, this year has seen a significant increase in meaningful pre-budget engagement with local government, which is equivalent to the process that was followed to ensure that cabinet secretaries’ portfolio priorities, and the three shared priorities, were factored into the budget considerations. We did that up front prior to the budget—in fact, a lot of work was done prior to the autumn statement; that statement was clearly a surprise, and a shock to Scottish public services.

The budget invests in the Verity house agreement by baselining almost £1 billion of funding across health, education, justice, net zero and social justice. It is crucial to make the point that that baselining, which provides greater flexibility, has been provided in advance of the agreement on an accountability and assurance framework, which will sit alongside the fiscal framework that we are also working on.

We will continue to work with local government to develop the necessary accountability and assurance arrangements, because that will allow us to provide more flexibility to ensure that the priorities of the Scottish Government and of the Parliament are achieved, alongside the priorities of local government and the three shared priorities in the Verity house agreement. To be clear, in this budget, which is the most difficult budget since devolution, we have prioritised local government with a higher share of our discretionary budget.

I will ask Ian Storrie to come in, but, in general terms, I suggest that that is exactly the kind of analysis that we need to get away from, as it looks at the inputs, which does not help. We are doing things differently. Across local authorities, there is some amazing innovation in the way in which things are happening, and sometimes a piece of work can help many of the outcomes. We need to look at outcomes. I hope that the fiscal framework, with an accountability and assurance framework alongside it, will get us to the point at which, across local government and wider public services, we can focus on what is making a difference for communities in Scotland. Looking at the way that we did stuff 10 years ago, when we do not do any of it in the same way, is not a real comparison.

We all have roles to play in that. We want to look at outcomes, but often we find ourselves instead going back to the inputs, whether they be the finance or numbers of X or Y. As a Parliament, as a Government and as a society, we need to find a way of shifting our analysis on to what will make the difference. A number of on-going pilots should help us in that respect. The Government cannot do that in isolation—neither can local government or the health service. We need to work in partnership right across the system.

As Ian Storrie said, the Government is putting significant funding into supporting some big-ticket items and work that, I hope, will be preventative in the future. One huge example of that is the Scottish child payment.