Chamber and committees

Before I go on to maintenance, I want to give Mr Morrison the chance to say something. I am sure that he did not want to get out of bed early for nothing.

I have a specific question, Mr Morrison. I believe that you are in charge of health infrastructure investment. Will you give us some comfort that the remaining six of the promised 11 national treatment centres will go ahead? The briefing paper from Audit Scotland sheds some doubt on whether that is the case.

Based on what we have just heard, there is no estate replacement strategy. It is all on pause. You have accumulated an immense backlog and you have talked at great length about the 2024-25 budget. It is absolutely right to look at what we have in the purse at the moment, but backlogs, by their nature, are an accumulation of underinvestment over a substantial period—a decade or more in some cases. Is it the case that we simply did not fix the roof while the sun was shining, which has left us in the precarious position of having billions of pounds’ worth of backlogs from which we might never recover?

But it was there. That is the point. It might not be there now, but it was there for many years.

Good morning to our panel of guests, and thank you for your comments thus far. I want to follow on from the conversation that we have started. My first question is topical and comes off the back of yesterday’s UK budget statement. I have a specific question—this might be a matter of correcting my knowledge. Analysis, which I think is publicly and widely available, states that £295 million of Barnett consequentials were announced in the statement, but that that was revenue as opposed to capital, as you rightly said. Is there any flexibility in the system that would allow the Scottish Government to convert revenue funding to capital if it chose or desired to do that?

So that £300 million could, in theory, be converted to the capital budget, which I presume would go some way to filling the £1.3 billion shortfall that you have projected—I think that that is the figure that you gave.

Absolutely—that is a decision for ministers. What I am getting at is that the figures that you gave were forecasted real-terms cuts, whereas that is potential real cash as opposed to deflationary-valued money. In other words, the money could go some way towards dealing with any potential deficit, should it be spent in that way. Further, it is new money—it did not exist yesterday morning, for example—so I presume that you had not already forecasted it in your budgets.

Ms Stafford, where are you getting the 8.7 per cent figure from? What is it made up of? The briefing that we have from the Auditor General forecasts that it will be 7 per cent, and we have heard other individuals talk about 10 per cent. You have today mentioned 8.7 per cent, which is a new figure. What levels of future inflation are you basing that on, based on the latest revised inflationary rates?

In other words, it is a moving feast. If and when inflation reduces, that number reduces, and it has already reduced substantially in the past few days. Is there a possibility that the 8.7 per cent figure could become 5 or 4 or 3 per cent?

We do, and it is certainly moving in the right direction, which is positive. However, it perhaps raises a wider question. I presume that, when a lot of projects were budgeted for in the first place, we were in a different world, where inflation was extremely low and interest rates were almost non-existent, at towards 0 per cent. When the Scottish Government’s various directorates were forecasting the costs of large infrastructure projects, to what extent were they budgeting for a potential rise in interest rates? In other words, was the total cost of a project based on the interest rates that existed at the time? Might it have been more prudent to factor in any potential rise in interest rates, knowing that there was a possibility that they could increase? Where do we sit against that? How realistic were those forecasts?

What are the key take aways, so that a member of the public who is watching this meeting can have confidence in what is happening?