Chamber and committees

That is a helpful opening question. Let me tackle it in two ways. First, we are mindful—as committee members will be, as members of the Scottish Parliament—that many people are still grappling with the immediate impact of Covid. I have just said that I am self-isolating; other families are self-isolating, too, and that will have financial implications. As we consider the long-term recovery, we cannot lose sight of the fact that many families are grappling with the here and now. Therefore, the first point is that we must try to support families as much as possible, and we must support the public, private and third sector organisations that are critical when it comes to dealing with the immediate impact of the virus—for example, in relation to insecure employment and children’s education.

The second part of my answer is about how we deal with the long-term economic recovery—I think that you alluded to that. During the pandemic, it has been said more times than I can count that we need to recover in a way that delivers for people. We cannot just recover the status quo; we must go further in tackling the inequalities that have been exacerbated by the pandemic and in ensuring that we deliver in the ways that we were grappling with prior to the pandemic.

Let me talk about the areas in which the committee has a direct interest. First, we have to ensure that there is warm, safe and secure housing for families up and down the country. That comes from our commitment in “Housing to 2040” and the significant spend on affordable homes.

Secondly, local government has been a key partner during the pandemic. We need to make sure that it is resourced with sufficient funding and sufficient levers of control and influence to enable it to respond.

The final part of the committee’s name is “Planning”. The fourth national planning framework, which will be a long-term plan that looks to 2045, presents an opportunity to ensure that we have the development and the infrastructure that are needed to support sustainable and inclusive growth.

I will stop there, rather than go on. As we look at the long term, we cannot lose sight of the immediate challenges, and this committee is one of the most essential committees of the Parliament when it comes to supporting and delivering for families and communities.

Yes and no. With the levelling up fund, local authorities are bidding for money with no clarity on whether they will receive it. One of the core principles of COSLA’s distribution methodology is fairness. In other words, when it comes to methodologies, whenever we announce packages of spend, COSLA’s constant and understandable response to me is that the money should be equally distributed across local government, as per the methodology.

The levelling up fund completely moves away from that. One local authority could, for reasons that are unknown to me right now, get substantial capital funding through the fund to invest locally, whereas other local authorities could be left behind. Where does the fairness that is inherent in COSLA’s distribution methodology come in? Does that mean that the Scottish Government should give more to local authorities that have not received money through the levelling up fund? Is that fair? Alternatively, should everybody get an equal amount and should it just be up to the UK Government to decide who is and is not a worthy beneficiary of the additional funding?

That approach completely undermines the concept of fair distribution of funding.

Thank you very much, convener, for inviting me to give evidence to the newly formed Local Government, Housing and Planning Committee. I warmly welcome each and every member of the committee. It is good to see the wealth of experience that members bring with them.

I apologise for not being with the committee in person, and am really sorry to miss what would have been my first in-person appearance since Covid struck. I was due to leave the Highlands last night to travel to Edinburgh but, unfortunately, within about half an hour of heading off to depart, I got notice from a close family member that they had tested positive, so I am now obliged to self-isolate. I am sorry for not being with the committee in person.

I welcome the opportunity to discuss the range of issues that fall within the committee’s remit. That range of issues is quite impressive, from local government, planning and community wealth building to recovery from Covid, for example. I look forward to hearing the committee’s views.

I acknowledge the pivotal role that the committee will play during these critical times, and I look forward to building a constructive relationship with it, as we continue our work to control the virus, protect the most vulnerable people, and ensure that we can recover as quickly and efficiently as possible.

As we look ahead over this parliamentary session, we need to combine efforts to deliver a bold and ambitious recovery and to ensure that we tackle the level of poverty in our society, engineer a shift to higher-value and fair-work employment, and deliver greater financial security for families.

I am sure that the committee shares my vision of creating an economy that delivers for families and citizens, and of a society that thrives across economic, social and environmental dimensions. The Government cannot—I certainly cannot—deliver that vision alone, so I hope that we will be able to work across the committee as we try to support the public, private and third sectors and deliver that vision of the best possible recovery.

I look forward to answering a range of diverse questions from members.

I meant that, for many families across Scotland, the status quo was pretty tough and grim. When it comes to recovery, we cannot be content just to go back to the way things were. We need to resolve some of the structural challenges in Scottish society and the Scottish economy. One example is that work needs to pay. We cannot expect families to make ends meet through insecure employment. The fact that so many children in working households are in poverty should be a huge incentive not to return to the way things were, but to do things differently.

Another example in the economic sphere is town centres, which you mentioned. Prior to the pandemic, we were already grappling with the way in which our town centres have changed, because people shop online and local town centres perhaps struggle to compete with some of the bigger urban centres. The pandemic has exacerbated those trends: more people have started shopping online, more people are digitised and our town centres are struggling more than they were, even with the big emphasis on shopping local. Those are two examples of how going back to the status quo is not an improvement, which should be an incentive to act.

Your question about local government’s role is important. During the pandemic, we saw that—homelessness is a good example of this—when there was an urgent need to act, because it was an emergency, we did not get sucked into process and bureaucracy but we focused on outcomes. Rather than get bogged down in the process of ending homelessness, we just decided, together, to end homelessness and to ensure that everybody had a home.

I go back to Miles Briggs’s question about preventative spend. In thinking about our national performance framework, of which COSLA and we are joint signatories, we need to focus on outcomes rather than process to fix the issues. We need to take that approach to every problem—rather than get fixated on process, we need to have the outcomes in mind and deliver those. It is easier said than done, but there are no more excuses, because we focused on outcome rather than process during Covid.

Thank you very much.

No, but I will take those two issues in turn. I think that it is important that I talk about local government pay, and I will then go back to talking about flexibility and ring fencing. As you know—I have said this repeatedly to COSLA, I have said it in public and the First Minister has confirmed this to COSLA, too—our budget has been fully deployed and there is no additional funding available for additional spend.

I am hugely grateful for the heroic efforts of all key workers, including those in local government, but matters of pay are for local government itself. Those matters are negotiated by the trade unions and COSLA through the Scottish joint council. We are not a member of the SJC, we have never taken part in pay negotiations and I do not intend to do so now. The point about managing budgets is a question for COSLA and local government.

On flexibility and the local government funding settlement, as I said a few moments ago, in last year’s budget, I was explicit that we were maximising the amount of non-ring fenced funding for local government. At the moment, the vast majority of the £11.7 billion that local government gets is not ring fenced. That includes some capital—£617 million—but the vast majority is for day-to-day services, and is not ring fenced. There is a general uplift. The last thing that I did before Parliament went into recess was provide an extra £275 million of non-recurring funding for Covid-related matters, and that was not ring fenced. Essentially, the vast majority of the funding is not ring fenced, and it is for local government to make decisions about how to spend it.

The irony in your question is that, on one hand, there is a general request for us to intervene in local government pay and, on the other hand, there is a request for us to provide maximum flexibility and discretion for local government. I intend to provide that maximum amount of discretion for local government without getting involved in matters of pay and how local authorities spend their budget.

There is certainly a growing understanding—although it is not yet universal—of the role of community wealth building. We in Parliament and in the public sector sometimes start to use such terms without necessarily explaining to the wider public what they mean, but there is a growing sense of the concept’s importance. With regard to its importance in the Scottish Government, we have seconded Neil McInroy, who was previously chief executive of the Centre for Local Economic Strategies, to a part-time role as strategic adviser to the Scottish Government as we develop our community wealth building programme.

As members will know, there are currently five pilot areas in which we have worked with local authorities to produce individual community wealth building action plans that reflect both their economic challenges and where we think that there are opportunities. Three of those plans have been published, and two are still in draft. The five pilot areas are Clackmannanshire, the south of Scotland, the Western Isles, Tay cities and Fife and the Glasgow city region; Elena Whitham also mentioned the £3 million for the Ayrshire region.

There are a lot of good examples. The key with the pilots, and with what is happening across the Ayrshire region, is to take best practice and roll it out. We are working with COSLA, the Scottish Local Authorities Economic Development Group and the Improvement Service to use community wealth building as a vehicle to deliver more locally bespoke and unique inclusive economic solutions, rather than having me, as economy secretary, come in and say that one size fits all, which we know is blatantly not the case. It is good to see a bottom-up approach being taken.

As someone who was not formerly a serving councillor either, I have to say that it is good to have some company at this morning’s meeting.

I can think of quite a number of examples. However, before I go through them, I have to say that one of the points that I frequently make about preventative spend is about the importance of Government and the Parliament going hand in hand on this. We are going to get into this again over the next few months, but I would simply note that, every year, Parliament scrutinises—and quite rightly so—those budget lines that go down as well as those that go up. As you will know from your years as health spokesperson, Mr Briggs, the problem with preventative spend is that additional spend in one area—in other words, prevention—means an equal and opposite decline in other spending areas. When I have come before the committee, previous members have asked me why, for example, I am not spending more on environmental measures to reduce future health harms. Mr Briggs will know as well as I do that, if we were to reduce spend in acute health areas and move that money into, say, more parks—I do not mean to be facetious, but you will understand what I am saying—there would be a bit of an outcry. That is what we have to do with regard to preventative spend.

One example that I would highlight would be our spend on active travel and low-emissions zones, both of which have, as you will know, a direct impact on lung health. As a result, although that spend is part of the transport budget line and has to be accommodated there, the benefits are seen in the health budget. We need to start scrutinising overall budgets. Perhaps the committee could take up that matter, given its diverse range of subject areas, but we have to get into the spirit of looking at what is happening in one budget line versus what is happening in another.

Another area in which the committee might take an interest is community wealth building, which involves us investing in local economies and community economic development rather than in big national economic development, knowing that, when you invest in local communities and create jobs at a local level, that inevitably has a bigger impact on, for example, the amount of spend on welfare support. If we are spending on creating jobs, we are not spending on welfare support, because individuals will be earning sufficient sums of money to support themselves and their families.

Those are two examples, and there should be more. In order to get more, we need to take a more holistic approach to the way in which I set that budget and, more importantly, the way in which the budget is scrutinised.