Good afternoon and welcome to this meeting of the Scottish Affairs Committee. This afternoon’s session is to discuss with the Secretary of State for Scotland the work of his Department. We normally take evidence from you about three or four times a year, Secretary of State. In addition to the regular questions relating to the work of the Department, this session will be used to put questions to you relating to the financing of the Scottish Government inquiry. We have some other suggested areas of focus, which will include the supplementary estimates, intergovernmental relations, and topical issues including Grangemouth. If you are happy, we will just proceed with questions. I will begin. Do you think the Barnett calculations, or the current calculations of the Barnett formula, ensure a fair funding regime for Scotland?

It is a great pleasure to be back at the Scottish Affairs Committee. I am sorry the democratic process has delayed us somewhat, but we are very delighted to be here. Of course, we are joined by Parliamentary Under-Secretary of State, Kirsty McNeill, and our director of the Scotland Office, Laurence Rockey. In terms of fairness, the Barnett formula has withstood the test of time in its allocations to Scotland. I suppose the fairness question arises from whether or not it is delivering for the people of Scotland. Indeed, most of the analysis would show that it delivers somewhere around £120 for every £100 spent on public services and people elsewhere in the United Kingdom. It is not just about the Barnett formula. Obviously, Scottish Government funding and Scotland’s funding is made up of a number of elements, of which that is one. There is obviously UK Government funding on reserved areas in the Scottish context, but also the block grant is made up of a number of things: Barnett block grant adjustments, DEL, and there is obviously the big self-financing part. The Barnett formula has transcended devolution. Even with the Scotland Acts of 1998 and 2016 with the additional devolution of powers, the Barnett formula has withstood that test of time and has—I think—cross-party support. Therefore, it delivers that fairness in terms of expenditure to Scotland.

It is lovely to have Ms McNeill and Mr Rockey back again, and we are very grateful for your patience this afternoon. As you know, there have been votes, and there are likely to be more before we finish the session, but we will crack on and see how much we can get through. It has been said that the Barnett formula is about pooling and sharing risks and resources across the UK, but we have also heard in evidence that it does not take any consideration of spending needs. Is there a case for adopting a needs-based element in the Barnett formula, do you think?

I would be very cautious about a number of things. One would be undermining the longevity of the Barnett formula, in terms of what it does in the Scottish context. We know the figures are quite clear that it is £120 in Scotland for £100 in the rest of the United Kingdom, so that is a clear issue. In order for a needs-based formula to be better than that, it would have to be more than 20%, and I am not quite sure a needs-based formula would get to that point. However, that is for others to calculate. In terms of delivering for the Scottish budget, the Barnett formula does that. It does it on the basis of needs and probably needs-plus. The enduring nature of the Barnett formula shows that it meets those needs. There was a calculation done in 2015 or 2016—it would need to be checked—when Stewart Hosie, the former SNP MP for Dundee East, was the finance spokesperson and raised this on the floor of the House. The House of Commons Library said that a needs-based formula at that point would mean a reduction of about £4 billion in funding for Scotland. We should stick with the one that gives the most funding for Scotland, because that is the way you deal with need.

In written evidence to us, the Scottish Government have called for full fiscal autonomy, on the basis that that would create a fairer system that would protect public services. How would you respond to that suggestion?

When I read that evidence, Madam Chair, I was quite shocked, actually. Of course, 40% of Scotland’s budget is actually self-financed through income tax and the other devolved parts: council tax and so on, income tax being the big one. I was shocked to read that that was the Scottish Government’s proposal, because I thought that had been dropped as a proposal on the basis that it would cost the Scottish Government, at current figures—in fact, on GERS figures—£8 billion pounds a year. I do not know if it is the current strategy of the Scottish Government to continue campaigning for full fiscal autonomy. I would be of the view that if you wanted to implement the funding of public services in the way we want them to be in the Scottish context, then you would stick with the funding formulas that are currently there. Of course, the fiscal framework is reviewed in legislation on a regular basis: the last one being in 2023, the next one in 2028, so it happens every five years or so. This is a joint agreement, it is not an imposition, and the Barnett formula and the other components of funding seem to work quite well on that basis. In terms of the wider issues about funding in the Scottish context, if any funding model like full fiscal autonomy removes £8 billion from your budget, then you would reject it immediately. I would certainly be rejecting that as a proposition on that basis.

Afternoon. The assignment of VAT revenues was due to be implemented in 2021. Nearly five years later, this still has not come into force. Do you think it ever will?

Obviously, it was part of the Smith Agreement in the 2016 Scotland Act and therefore something to be implemented. Both Governments are working very closely together to try to implement this. It is hugely complicated. The priority has been given to getting other taxation elements, including the aggregates levy, over the line. The complicated nature comes from the fact that the policy to assign 50% of VAT is difficult to administer, on the basis that Scottish businesses, for example, do not allocate where the VAT is raised in terms of their own sales tax, and so on. It is a very, very difficult thing, but both Governments are working together to try to get it implemented as quickly as possible. We are nine years on, but it is proving to be quite complicated in nature, and the priority is being given to other devolved powers at this stage, with both Governments working together.

Why are the calculations of comparability percentages not published?

Well, the Green Book and all the Budget books would show you what is being devolved through the Barnett formula and so on in each Department. This is hugely complicated, but as I understand it, each Government Department either has a 0% score in terms of funding, or a 100% score. A 0% score would be a Department that is completely reserved, a 100% score would be a Department that is devolved. Every other Department has a score between that 0% and 100%, depending on the devolution nature of it. Of course, this is done by negotiation between both Governments, but the figures are there for people to see in terms of the quantum of resourcing. If you think about a Department like the Home Office, for example, not only is the Home Office partially devolved and partially reserved—so it will sit somewhere along that spectrum of 0% to 100%—but even stuff that is devolved that has a Barnett consequential attached to it might not be used for the same purposes in the Scottish context. It is a hugely complicated picture, but these things are kept under review all the time. There is a block grant transparency part of the spending review that you will see in June when the spending review is announced.

Can you give us an idea when the next block grant transparency document will be updated?

It will be updated and published soon after the spending review figures are known. The spending review will be in June, so fairly shortly after that.

It is a well-established framework, and there are intergovernmental avenues to this: there is the Finance Interministerial Standing Committee, affectionately known as the F:ISC, where things can be raised; there are the Joint Exchequer Committee structures; there are the fiscal framework renewals; there is the block grant transparency that is done through the budget processes and the spending review processes. This is a constantly moving issue. In answer to the first questions by your Chair, the Barnett formula has been able to sustain and survive and has cross-party support, I think. Therefore, while the Treasury of course is the ultimate arbiter on the basis that it holds the pen on the budgets, for that whole process there is a big negotiation across Government and elsewhere, and there is a clear cross-Government working on the negotiations around those issues. While the Treasury is the ultimate arbiter in that sense of your question, there is a whole host of infrastructure around that that allows the Scottish Government in particular to be a participating part of it.

I see all these things in terms of whether it would be for a purpose, and what would the purpose of putting the Barnett formula on a statutory footing be? It works incredibly well; there is a whole infrastructure around it and a whole infrastructure around intergovernmental relations. If there was a purpose for doing so, yes, but I cannot see what that purpose would be, and it works quite well.

The fiscal framework process was committed to as part of the Smith Commission. Obviously, there is a wider commitment to an ongoing dialogue about making sure that the wider system works. If you go back 10 years, there have been quite a lot of changes to the system overall, through the intergovernmental process that the Secretary of State has described. If you put it on a statutory footing, you are perhaps boxing yourself in with the choices that you have to make more than either side would wish to do. It might add more complexity without necessarily achieving that much.

I suppose to a certain extent it has objective third-party oversight, on the basis of Parliament, other political parties, and the public in that sense. But it is really important to emphasise that both Governments work very closely together on these issues, and there is a whole intergovernmental structure around them to be able to make sure they are scrutinised and effective. I merely repeat again that the Barnett formula and other funding mechanisms have survived the test of time, including the review of 2023 for the fiscal framework, which has been long-established and will happen every five years—with the next one being in 2028—to iron out some issues that may come along that are unforeseen. There is a whole structure around it. Would a third-party arbiter essentially make those discussions or processes easier? I cannot see how that would be the case.

It has been suggested to us, Secretary of State, that the Scottish Government’s borrowing powers could be expanded to allow them to borrow in cases other than forecast errors and the like. Would you agree with that suggestion?

This is something that was tested at length during the fiscal framework renegotiations back in 2023 and will no doubt continue to be tested. The allocation, in terms of the limits around borrowing, is £3.05 billion on the capital side and £1.8 billion on the resource borrowing side. That works quite well because it is used already to balance out the budgets that are required for those in-year processes. One of the key things here that is worth emphasising is that both the Institute for Fiscal Studies and the Fraser of Allander Institute have said that Scottish Government budgeting in itself has to improve, in order for this to be part of the process. It is not just a one-size-fits-all from a UK Government and Treasury perspective, it is also the Scottish Government’s budgeting processes. The IFS and the Fraser of Allander Institute have been incredibly critical—not just recently, but in the previous number of years—about how their own budgeting is working. But the mechanisms are there for that to be evened out over the course of the year, and again, they work relatively well.

Would you think that the Scottish Government’s borrowing limits could be linked to measures such as GDP growth, rather than to inflation, as they are at the moment?

The answer to that question depends on which is the higher, but I would have thought that linking it to inflation means that over the course of time it maintains its value, rather than being linked to something that might be lower than inflation and decreasing in value. I would have thought that that would have a real cash implication for public services in the Scottish context.

These, of course, are a challenge. What we are trying to do as a Government is to give a much greater certainty across the funding piece. The spending review that is happening now, which will be published in June, will give the following two years. Given that 2025-26 is already in place, with the following two years, that gives you a three-year funding settlement, plus there will be a rolling two-year funding settlement on the end. This will happen every two years, so you are going to get three years of certainty. That certainty is what people have been asking for, for some time. Yes, of course, there have been some in-year adjustments over the course of the last nine months, but do not forget the Budget provided £4.9 billion extra in spending—both capital and revenue—to the Scottish Government’s budget, and that should be able to be managed throughout that process. The borrowing powers are there to help with some of that and are used regularly for cash-flow purposes in and out. It is also really important that the UK Government set out a much longer-term spending horizon, so that it is not a year-on-year basis. The Fraser of Allander Institute is absolutely right that the Scottish Government’s budgeting should do the same. It is not just UK Government to Scottish Government budgets, but Scottish Government budgets to local councils and other third-party organisations that are done on an annual basis that get huge criticism. Both Governments should work together to give a much longer horizon to the people we fund further down the chain.

The whole Government’s approach is economic stability. I hope that the 30 October Budget—the fiscal event we had last year—gives that stability running through. The spending review process to conclude shortly is part of that certainty for the next two years, and that will be on a rolling two-year basis, so there will always be a three-year horizon of financial settlement to give that certainty. Fiscal events are the time when you add to those particular issues, and of course, the Office for Budget Responsibility and the Scottish Fiscal Commission are part of that strong process. There will be unexpected events that happen; that is what the Treasury Reserve is there for, and that is what the borrowing requirements of the Scottish Government are, for revenue to allow them to balance and even some of that out.

Secretary of State, how much notice are the Scottish Government giving regarding changes to spending that will affect the annual block grant?

Again, we are trying to give a much longer horizon to that, but in terms of the two events that have happened so far—the big Budget event in October and the emergency situation that we were met with in July—the Scottish Government were informed by the Chief Secretary to the Treasury in as timely a fashion as possible. To give you an example, the Cabinet clears the Budget and then, within about three quarters of an hour, the Chief Secretary to the Treasury or the Chancellor will speak to the Cabinet Secretary for Finance on the basis of that. I joined those calls at the Budget back in October, so we do it as quickly as can possibly be the case. Obviously, timescales are not ideal, everybody would admit that, but there is a lot of market-sensitive information in there that can only be given at a particular time. Of course, from a UK Government’s perspective we have to make sure that our decisions are cleared by Cabinet before they go into the public domain, because those decisions could ultimately change—that is what Cabinet government essentially can do. Therefore, the Scottish Government are informed as quickly as possible. I hope the spending review process with two-year rolling spending reviews will allow a three-year window and horizon to funding, which will give much more certainty.

When we were last in the Committee, we said that part of the point of the reset was not just resetting the relationship with the Scottish Government, but with Scottish society writ large. It is important we get information not only to the Scottish Government as soon as possible, but to wider Scottish stakeholders as soon as possible, and we did that really effectively on the day of the Budget. We spent most of the five hours subsequent to the Chancellor sitting down in conversation with relevant Scottish stakeholders, and we are committed to being as accessible and transparent on that going forward.

The UK Government’s cut to winter fuel payments resulted in a £160 million cut to Scotland’s block grant. Now, the Scottish Government state that they had no prior consultation from the UK Government on the winter fuel payment restrictions and that they were notified only on the day of the announcement. What notice were the Scottish Government given of this decision?

Again, the Scottish Government were informed as soon as they possibly could be informed. These are decisions that went through the proper structures—the proper democratic structures as well as governmental structures—and the Scottish Government were subsequently informed from that basis. It is dwarfed by the £4.9 billion extra in the Budget; that was £1.5 billion in-year for 2024-25 and an extra £3.5 billion for 2025-26. The Government are being as transparent as they possibly can in sharing information with the Scottish Government. Again, as Minister McNeill said, it is not necessarily about the process of sharing information. Both Governments are working very closely together on a whole host of issues, from legislation to growth to green and all those big issues. If Cabinet Secretaries and Secretaries of State are working closely together in partnership, which is what we are trying to do to reset the relationship, then these issues will not arise. The stuff that had to be done in an emergency in July had to be done because of the inheritance that we received from the previous Government. I do not think anybody on this Committee, certainly, would deny that that inheritance was bad with what we knew about and was certainly made much worse with what we did not know about. I understand that some would like to wish away that black hole, but Governments have to deal with it. We do not have that luxury, I’m afraid.

The Scottish Government had to set their budget without any clarity on the financial impact of the national insurance contributions changes. The UK Government have said that the Scottish Government will continue to receive funding through the Barnett formula in the usual way in ’25-’26. How can the Scottish Government effectively plan their spending without oversight on these decisions?

Well, look, a Scottish Government Minister appeared before a Committee of the Scottish Government and said they were looking forward to a UK Labour Government bailing them out. They had already set a budget that had a significant financial deficit of somewhere between £700 million and £1 billion; £500 million had been allocated from the Scotland licensing sale in order to plug the black holes in their budget. I do not need to rehearse what the IFS, the Fraser of Allander Institute and other bodies have said about the financial planning of the Scottish Government. We have done everything we possibly can. We promised that we would end austerity at the election, we wrote it into our manifesto, and we sent a cheque for £4.9 billion. Yes, there are going to be issues around the edges that alter budgets plus or minus. That is why the fiscal framework is in place to provide those stabilising mechanisms, in order for us to be able to look at the overall figures at the end of the year. You only really get that after a budget has been set, but also after the outturns have been done, in order to balance them out. It is a hugely complicated equation. If you think about the devolution of income tax and the devolution of some welfare benefits, these are big, big pots of money that balance things out as you come close to a year end. It is really, really important to see that the money is there. The quantums of money are eye-watering and the largest they have been in the devolution era. That should help the Scottish Government to budget, if we have a much longer horizon in terms of giving them that certainty.

Just to say that, from a civil service point of view, the relationship between the Treasury teams in the UK Government and the Treasury teams in the Scottish Government is a day-by-day deep relationship, with the complexity that the Secretary of State describes. They are having an ongoing, dynamic conversation. From the Committee’s point of view, it is not as though there is a letter issued once a year and that is the end of the process. Obviously, on a day-to-day basis there is a really dynamic conversation, which is important in making the system work.

Secretary of State, just to build on the two previous points that have been made, obviously there was a significant announcement from your Government last week in respect of welfare and the planned £5 billion reduction in expenditure. Are you in a position to advise the Committee as to whether the Scottish Government have been made aware of the financial impact upon them of that decision, and indeed, what the financial cost of that decision actually is?

Well, obviously, this will all be laid out in the spending review, but the financial impact of the decision last week on the Scottish Government budget that has been announced is zero. That has been communicated to the Scottish Government.

Your view is that there is not going to be any consequential impact from the £5 billion cut in welfare by the UK Government? There is going to be no financial impact on the Scottish Government at all, in terms of their spending portfolio?

The numbers will be laid out in the spending review—in fact, some numbers may be laid out in the spring statement in a little over 24 hours’ time—but the current communication to the Scottish Government is that there will be no reduction in their budget up to the end of this current spending round, which is 2025-26.

In ’26, going forward then, the UK Government have obviously taken a decision in respect of a £5 billion cut in welfare. You would presumably have been privy to that as a Cabinet sign-off. Are you in a position to tell us what the financial impact to the Scottish Government will be? I say that on the basis that—as you know—personal independence payments have been phased out in Scotland and replaced by adult disability payments. That is undoubtedly going to have a financial impact upon people who are in receipt of those, is it not?

It is really important to be clear, Madam Chair, that the £5 billion reduction that has been touted is a £5 billion reduction in the increase, not £5 billion from the current Budget. That is why the impact on the Scottish budget is zero, in terms of what is being produced. Going forward, those figures will be announced in the spending review and in the spring statement, as that information would always be. Those figures will come out as and when they are available.

Do you know how many people in Scotland are in receipt of adult disability payments?

You are probably going to be able to tell me, but it is probably somewhere in the region of 300,000.

It is 433,000 people.

It is higher than the rest of the UK.

Those people are ultimately unsure whether there is going to be funding in place to support them in their lives going forward. Your answer to me today is that we have to wait and see for a spending review. Surely as Scotland’s man in the Cabinet, you are sitting there and privy to this information. You can share that information with the Committee and with the Scottish Government. We are talking about a resetting of our relationship, Secretary of State. It does not sound like there is a lot of respect going on here.

You have answered your own question, if you don’t mind me saying, because adult disability payments are devolved. The funding of that is subsequently devolved. The decisions about adult disability payments in Scotland lie with the Scottish Government, not the UK Government. Therefore, the certainty you are demanding for those 433,000 people who are in receipt of ADP in Scotland has to be supplied to them by the Scottish Government, because it is a devolved benefit.

You are effectively washing your hands of the decision that the UK Government have taken? There is no consequential impact upon Scotland of the decision by the Westminster Government?

If I could gently say, if it was the other way around, I would fully expect your question to be, “Why are you riding roughshod over the devolution settlement?” This is a devolved payment. It was devolved under the 2016 Scotland Act, along with a whole host of other devolved welfare payments, and therefore the money is devolved. There is £4.9 billion extra between now and the end of 2025-26, and it is up to the Scottish Government to spend that money in any which way they wish to spend it. Therefore, if it is a devolved payment, it is their responsibility to remove that uncertainty, by the Scottish Government determining how they are going to deal with this particular issue.

Secretary of State, Scotland’s final block grant is not confirmed until the supplementary estimate in the spring. How confident are you that the Scottish Government are able to effectively spend this funding when final budgets are confirmed so near to the end of the financial year?

I suppose the issue becomes just the way in which processes work. That is why the fiscal framework allows for those balancing payments to be used in terms of both cash flow and, indeed, capital and revenue. The other thing we tend to forget about is we always talk about Barnett and block grants and so on, but actually two of the other largest components of Scottish Government funding are their own self-financing stuff and, on the other side of it, the money that the UK Government spend in Scotland that is not devolved. That is a huge amount of money as well, which essentially dwarfs the rest of the budgets probably combined. The GERS figures put that somewhere around £44 billion, and UK Government AME is around £600 billion, so you can see the context of how all that works together. There is a reserve that can be used as well, in terms of balancing out some payments. The total reserve this year—if I just have a look at these figures—for genuine, unforeseen, unexpected and unaffordable pressures will be significantly smaller than in recent years. In 2025-26 the total reserve will be £4.1 billion compared with £11 billion in 2023-24 and £10 billion in 2024-25. These are questions that the Treasury would be much better to answer in terms of the technicalities of it, but that is the quantum of it.

Thank you, Secretary of State, and I am glad that you mentioned the reserve because I was just coming on to that. There have been some suggestions—including from the Fraser of Allander Institute and one of its representatives, who gave evidence to this Committee recently—that the limit on the cap of the reserve should be abolished in order to give the Scottish Government more flexibility, particularly from one year to the next. Can you give me your view on that and whether you have discussed removing the cap on the Scotland reserve?

The Scottish Government agree to the reserve. The Scotland reserve is done in agreement with the Scottish Government. It is currently sitting, as you say, at £711 million. The annual drawdown on both capital and resource spending on that is unlimited, so you can spend all the way up to £711 million. That is done in agreement with the Scottish Government, to allow the Scottish Government to manage their expenditure within the agreed budgets that are there. There is quite a substantial amount of money. I do not know how much of that is actually drawn down at this moment in time, or how much is drawn down on an annual basis, but I am certainly happy to get the Chief Secretary to the Treasury to write to the Committee and give you the profile of how much of that is actually used on an annual basis, if that is helpful.

Thank you, but I would just like a bit more clarity on whether you have had those discussions about the removal of the cap.

I have not done so, but the Scotland reserve is agreed with the Scottish Government and the Treasury on an annual basis.

The fiscal framework review, as Secretary of State mentioned, is committed to review that once a Parliament. Obviously, the next one is not scheduled for a couple of years, but that is the forum in which those sorts of issues would be discussed. There is obviously discussion around stability. There is a constant discussion about changing the rules, and the whole system is in danger of becoming overly complicated, so that is why you have a regular moment in order to discuss the issues that both sides would like to discuss.

And that next moment is?

2027, I think.

I will just move on to my next question. In the supplementary estimate, £43.7 million was removed for city region deals. Can you tell me what the reasons were for this reduction in direct investment, please?

Obviously, we were really pleased to sign jointly with the Scottish Government the final growth deal on Argyll and Bute just two weeks ago. Each deal has a specific amount of funding over a 10-year period. Some profiles are over slightly longer, but obviously each regional partnership has to have the business case and have the project ready to deliver against that profile of expenditure. Due to lots of reasons that you will be familiar with—it might be contracting on a project—things might slow down; some things go quicker. There is obviously a dynamic process that all the funding across all the growth deals amounts to. This number that you refer to recognises the fact that the expenditure has been slightly behind profile, and therefore, the Scottish Government have requested only the money that they need against that figure. The growth deal model is unusual in the way that it is accounted for.

The money is still there; it is just re-profiled. It is good news that we are working very hard with partners to make sure that the growth deals that have had to be re-profiled are getting on stream as quickly as possible.

Well, you have both covered two supplementaries that I had. One was what involvement the Scottish Government had in the decision, but you have just said that they were the ones who requested less.

Absolutely. Each growth deal is managed by a joint team from the Scotland Office and SG officials who work on a joint basis. It is a joint process.

I was going to also ask if the investment had been removed completely, but it is just deferred?

Yes.

Yes. That is great. Was the £43.7 million funding part of the £119 million allocated at the autumn Budget for city and growth deals?

Is it part of the £1.4 billion additional? I think it is. Laurence, is that correct?

Yes, I think that is correct.

Essentially, all 12 growth deals that now cover the whole part of Scotland are fully funded. Obviously, all 12 have moved at different paces; some are still struggling a little while others are actually coming to maturity. That funding over that period of time will be drawn down as and when is required.

I think the £119 million refers to the Falkirk and Grangemouth growth deal and the Argyll and Bute growth deal, which are the final two that have been recently concluded. The total funding of all the 12 growth deals is then managed jointly with the Scottish Government. The total amount of money is the total amount of money; it is just a question of how much money is spent in each particular year.

Is the growth funding the same as what used to be a levelling-up fund?

Yes and no. The city growth deals are the 12 individual deals that were put together in partnership between the UK Government, the Scottish Government, local government and third-party stakeholders, universities and the private sector. The levelling-up funding is slightly separate to that for different projects that are not part of the growth deals themselves.

Are there still funds available for people to apply to, and what would they call that?

It depends who you are—no, I am joking. “Mostly yes and slightly no” is the answer to your question, in that sense. I can use the example of the Ayrshire growth deal, which had to be reprofiled completely with new projects. Therefore, there is obviously still some space in those kinds of growth deals to have a look at whether or not there are other opportunities. They are re-profiling that. There is a bit of a re-profiling done in Falkirk and Grangemouth to take into account the issues that were happening at the Grangemouth Refinery, and £20 million of that has been looked at in terms of additional money to re-profile into the skills. It really depends on where you are. With the Isle of Bute one that we have just signed, the vast majority of that is for the Rothesay Pavilion on the Isle of Bute, and therefore, re-profiling that would be much more difficult. Yes, if you are asking whether there are projects that could still bend to these things, it is probably quite tight, but there are opportunities in terms of some re-profiling of the growth deals that are slightly less mature than the other ones.

I will be in touch.

Well, you will not need to be, because we are going to be in touch. What the nature of your questions has revealed to us is something that we had already clocked: because the growth deals are tripartite between the local authorities, the Scottish Government and the UK Government, the bit that is missing is actually oversight from Scottish parliamentarians. You will not have a formal role in the oversight of the deals, but it is really important that you are apprised of everything that is happening in your local deals. We already have that in train to make sure that on a cross-party basis, Scottish parliamentarians are able to get under the skin of what is working and not in the different deals.

Secretary of State, how have you represented the best interests of Scotland to the Chancellor ahead of the spending review?

Well, as a Scotland office—this might feed into some questions going into the more general inquiry session later—we have reformulated the whole of the Department into four key priorities: economic growth, green industries, Brand Scotland and poverty. Those are the four key strategies that we are pursuing as a Department, but many of those strategies are part of the key UK Government’s missions as well. We are feeding a whole host of things into the Treasury in terms of unlocking that economic growth. It is key. A lot of the projects that have been announced already by the Chancellor fundamentally affect Scotland: the whole issue around trying to get both Governments to work in concert with each other in terms of planning and consenting around the green agenda; there are also huge issues around the AI Growth Zones, for which applications have now closed. There have been many, many bids from Scotland. Our role as a Scotland office is essentially to champion Scotland, but also to be Scotland’s window to Whitehall and allow others to make those cases. In fact, we have had many letters from Members sitting around this Committee for things that should be going into the spending review. Our key thing for the spending review is twofold. First, we want to get as much as we can in the spending review that affects Scotland directly. Secondly, we want to make sure other Government Departments have stuff in there that is of great interest to Scotland as well, which is partly to do with the first issue. Then there is a big issue in terms of getting the Scotland Office into a place where we are able to influence those things directly already. There are a whole number of strands in the spending review going on in terms of Scotland’s voice, and it is heard loud and clear. I would like to make just a little footnote to that. Whitehall, like all Governments, works in a very siloed way. What the Chief Secretary to the Treasury is trying to do with the spending review is to find a horizontal way of working across Government. It is a mission-led Government, so the clean energy by 2030 is not just DESNZ’s responsibility, it is actually the responsibility of all Government, including growth and so on. What we are trying to do is to do exactly the same thing but have a Scotland overview to everything that is going on as well. That will be the first time that has ever been done, and it will allow us to investigate what other Departments have in their spending review relevant to Scotland and how we can influence that.

I would like to just add that the Chief Secretary to the Treasury was in Scotland last month, and the Chancellor herself and the Exchequer Secretary have been in Scotland this month. Part of our job in terms of being that window is making sure that Scottish stakeholders are getting face time with relevant Treasury Ministers. We have been successful in that in the last two months, and we will continue to prioritise that.

The net zero Secretary, in response to a question from me last week in relation to the Acorn project, said, “Look forward to the spending review,” and he did so with a smile on his face. I assume that the Secretary of State for Scotland is also champing at the bit to see the Acorn project pushed ahead and is arguing for that to be included in the spending review, in terms of that capital that it so desperately requires?

We are champing at every Scottish bit.

Secretary of State, you mentioned in your answer that one of the priorities of the spending review is tackling poverty. The UK Government Department for Culture, Media and Sport announced last week £100 million of funding to tackle improving sports facilities. Will that be targeted specifically at areas of greatest deprivation, and will Scotland get its fair share of that £100 million announcement?

Scotland gets £8.6 million-worth. It is being done in conjunction with the Scottish Football Association, so we get more bang for our buck together. It has a really ambitious programme over the next period of years in order to upgrade multi-pitches and things. Minister McNeill won the keepy-uppy challenge and launched it with the Secretary of State at DCMS in Bonnyrigg last Friday.

Indeed, at Bonnyrigg Rose Community Football Club. The answer to the second bit of your question is yes, it will be targeted at those who are least able to access grassroots sport, so a focus on income but also on girls’ access to sport.

Just generally, Madam Chair, if you do not mind, the reason that the Budget last October had such a significant impact on Scotland was because Scottish MPs from across parties—but particularly within Government—were championing Scotland’s cause, which is why the £4.9 billion figure was so high.

You will get a few more knocks at your door then, I would imagine, Secretary of State.

That funding stream is not yet open, but it will be very shortly.

Who oversees that in Scotland?

It is DCMS in partnership with the SFA. There are already contact details available for the right person at the SFA, if people want to indicate early energy around bids locally. The funding stream itself will be open very shortly, but not yet.

I could not possibly tell Madam Chair how to run the Committee, but the SFA has a wonderful presentation of the 104 pitches and facilities that it has done already, right across Scotland, from the very tip of Shetland right down to the borders. This £8.6 million, along with the plans that it has through the SFA, will be a real game-changer for some of those other facilities that have not been done yet. It is a presentation well worth seeing. It is really impressive.

We will take that, Secretary of State, thank you. I have a question about the Internal Market Act 2020 review that is going on. Are the Government thinking of revising the Internal Market Act as a result? [Interruption.] Sorry, the bells are ringing because we have a vote.

I had the most tremendous answer for you as well, but the bells beat me.

Well, we could come back to it. I do not know if we are going to have one or two Divisions at this point in time—I do not know if that is something that you are able to tell us.

I heard it was six.

We will have to adjourn for the moment and hopefully come back.