Official Report 518KB pdf
Agenda item 2 is an update on broadband infrastructure from the Cabinet Secretary for Infrastructure, Investment and Cities. I welcome Nicola Sturgeon, the cabinet secretary, and Colin Cook, the deputy director for digital strategy and programmes in the Scottish Government. Would you like to make an opening statement, cabinet secretary?
Thank you, convener, and I thank the committee for inviting me to provide an update on progress in providing Scotland with a world-class digital infrastructure.
In July 2013, shortly after my previous update to the committee on the topic, the Government signed the second of two contracts that comprise the digital Scotland superfast broadband programme, which was previously called the step change programme. That contract covers the rest of Scotland and sits alongside a contract for the Highlands and Islands that was signed last March by Highlands and Islands Enterprise.
Both projects are making very good progress. The first cabinet in the Highlands and Islands project went live early this year in Buckie in Moray, and by the end of the first quarter around 8,000 homes and businesses across Highland and Moray were able to access services. That is significantly more than BT’s contractual commitment for this stage. The first publicly funded cabinet in the rest of Scotland project area went live in April in the Aberdeenshire village of Kirkton of Skene. Members will be aware that a dedicated website—www.scotlandsuperfast.com—has been established to ensure that the public are able to access information about the programme’s roll-out and coverage. All of that represents a major step towards our digital ambitions, and we remain focused on achieving our target of 85 per cent of premises having access to fibre broadband by 2015-16 and 95 per cent by 2017-18.
We have established community broadband Scotland to support those communities that are least likely to get next-generation access through the superfast broadband programme. Community broadband Scotland aims to transform the way in which communities live, work and learn by empowering them to acquire the assets that they need to access faster broadband. It is making steady progress. To date, around 650 premises have been connected in Applecross, Locheil and Blairlogie. Encouragingly, the programme has engaged with a further 67 communities across Scotland, 32 of which have developed a broadband solution and are in the process of formally applying for capital grant assistance. We remain committed to supporting rural communities in developing and delivering those solutions through community broadband Scotland because we want to ensure that no communities are left behind.
One small but significant example is worth mentioning to demonstrate the significance of connectivity in our more remote communities. We have supported a project on the Isle of Coll in which, through a partnership between the Government, Development Coll and Vodafone, the island will get good-quality 2G, 3G and 4G mobile phone coverage for the first time. It will also test the concept of an alternative model of community ownership of a mobile mast in an area that has not previously been seen as commercially viable by mobile operators. Construction of the phone mast has already commenced and the project is expected to be operational this summer. That is just one example of the innovative approaches that are being taken in some harder-to-reach areas.
Since I last spoke to the committee, we have begun to make significant progress in securing the long-term benefits of the investment in infrastructure. The digital participation strategy, which was published on 24 April, sets out a framework for action in communities and workplaces up and down the country that will seek to use the power of the internet to break down inequalities and help people become more confident and creative users of digital technology. We have appointed a director of digital participation at the Scottish Council for Voluntary Organisations to lead some of that work, and one of his key tasks will be to promote the digital participation charter, which is intended to act as something of a matchmaker between organisations that recognise the need for digital inclusion and want to use their expertise to play their part, and community groups that need support to help people get online.
On the digital economy, Skills Development Scotland has published the skills investment plan for the information and communication technology and digital technologies sector, and the First Minister has announced investment of an additional £6.6 million to deliver many of the plan’s key recommendations. The plan sets out a series of specific actions that are designed to meet some of the challenges that we face through a partnership with Scottish businesses. There will be an industry-led skills academy, 750 work placements for further and higher education students by 2016 and support for employer engagement with our schools.
We have made and continue to make significant progress in moving towards the world-class vision for 2020 that we have set ourselves. We are doing that through a suite of interlinked workstreams. We are very much on the front foot in delivering the vision, but a lot of hard work is being done and remains to be done. I am confident that we are on track to meet the 2020 vision that we have set.
With those opening comments—I was going to say that they were brief, but they were not so brief—I am happy to take questions.
Thank you. Adam Ingram will start the questioning.
How far away are we from meeting our target of 85 per cent of premises having access by 2015?
We are on track to meet that. The information that I gave about the Highlands and Islands suggests that, at this stage of the game, the project is slightly ahead of schedule. As I have said, the first cabinet in the Highlands and Islands went live in February and BT has surpassed its first contractual commitment to deal with just under 5,000 premises in the first quarter. More than 10,000 premises now have access, with at least 5,000 more expected by the end of the month.
In the rest of Scotland, the first cabinet went live in April, and to date, more than 140 exchange locations have been announced within the first two phases. As the rest of Scotland project commenced later, we do not yet have the same level of connections information as we have for the Highlands and Islands. We are currently verifying some of the early survey information, and a report on the first quarter’s progress is expected at the end of the month. This was always intended to be a rolling programme, and we are on track with it. I mentioned the website that has been set up, which gives the public access to roll-out information. As we proceed with the project in the months ahead, the website will be updated regularly, and the information will become more detailed and granular.
With regard to your overview of progress, do you or your civil servants have a detailed schedule that lays out the milestones along the way to reaching the 85 per cent target? Just for my information, when in 2015 will the target be met?
I will let Colin Cook answer that.
The first target that we set, which was to give access to 85 per cent of premises in Scotland, will be met at the end of 2015. We have a detailed milestone plan for both projects, which as the cabinet secretary has explained are in the Highlands and Islands and the rest of Scotland. Many of the premises will have their access enabled in 2015. With the Highlands and Islands contract, there will be a major investment over this summer in subsea cabling to the islands. That needs to be put in place; after all, the trunk of the tree, rather than the twigs and branches, needs to be in place for the fibre to work. That is one reason for the slow ramp-up. However, as the cabinet secretary said, we are on track and, in the Highlands and Islands, we are marginally ahead of schedule.
When I ask about progress in my constituency and when exchanges will be upgraded, I get very vague answers. For example, I am told by the BT people that many exchanges are under evaluation. When constituents from various parts of my constituency ask me about the matter, I am unable to give them hard and fast information. That lack of information can be a constraint on communities progressing alternatives or making a bid to community broadband Scotland. Can we do something to ensure that things are clarified?
We are trying to be as transparent as possible and ensure that the information that is provided for public access is as full as possible. We want to ensure that, by the time communities are given detailed information on roll-out and timescale, the work has been done to ensure that the information is reliable. We have to strike a balance between getting as much information out as quickly as possible and taking a bit of time to ensure that the work has been done to inform properly the roll-out schedule and that communities get information that they can rely on. As I have said, the public can access the website, and the information on it will become more detailed and granular the further we get into the project. Our commitment is to be as open and transparent as possible in that regard.
To put some of these issues in context, I point out that the projects in the Highlands and Islands and the rest of Scotland are contracted to provide next-generation broadband access to the parts of Scotland where, if it had been left to commercial deployment, that work would not be happening at all. In a sense, we are filling in the gaps where the market simply will not go.
If it were not for those contracts, which are being delivered with public funding, we would have a commercial roll-out that would reach only about two thirds of Scotland. I appreciate that communities want as much information as possible as quickly as possible, and we are determined to deliver that. However, it is important to understand the context and purpose of the project. This massive public sector investment is being made to ensure that communities that would not be catered for by the market are not left behind.
I appreciate that, cabinet secretary, but as a constituency MSP, I am concerned that some of my area might be in the 15 per cent that will not be covered. I need to know that in order to help local communities if they want to start making alternative plans.
Absolutely, but you need to know that when the information is reliable. There is no point in being told right now that a particular community will not be included when there is a prospect that it might be, or vice versa. There is a balance to be struck between having speedy information, which we as politicians would like, and having reliable information. It is important that we get that balance right.
I must stress that we are operating on the basis that we want no community to be left behind. That is why we are investing in community broadband Scotland, and why there is a range of other workstreams relating to the world-class digital ambition vision. We will no doubt come on to some of those issues later. As we go through the programme, we are looking ahead at the quality and capacity of the network and infrastructure that we are putting in place to ensure that it serves Scotland well for many years to come.
There are a number of variables, particularly with regard to surveying, that we will not know about until quite late in the process. Another factor is that more money is coming on stream, which, if we choose to invest it in this way, might allow the BT project to go to areas that were not originally on the schedule.
There are protocols in place for the work that is going on between the programme team that is leading on the BT contract and the team that is leading community broadband Scotland. Where the two programmes might butt up against each other, the protocols explore how far the BT contract is likely to go and define the areas on which community broadband Scotland can concentrate. It has taken some time for the protocols to be put in place, but they are now working.
I can follow up on that matter.
With regard to community broadband Scotland, the cabinet secretary said that 67 projects have been signed off.
No. I said that we are working with 67 communities, not that 67 projects have been signed off.
10:15
Okay. Again, I am being a bit parochial, but I am looking for some projects in the south-west of Scotland. Most of the projects that I have heard about are in the Highlands and Islands, but we have our own peripheral and remote areas in the south-west. The rural Ayrshire hinterland, for example, needs some investment. Where are we at with community broadband Scotland? How well is the rest of Scotland being covered by the project?
In case I inadvertently gave anyone the wrong impression in my opening statement—although I do not think that I did—I should for clarity advise the committee that community broadband Scotland is actively engaged with 67 communities throughout Scotland, all of which are at different stages in the project development process. Of those 67, 32 are at the formal application stage for capital grant assistance, and the others are at an earlier stage.
I do not have a list of the 67 communities in front of me, but I am happy to send Adam Ingram details of any projects in his area. Some of the impetus for the work comes from communities themselves getting in touch with community broadband Scotland to investigate whether there is potential in their area. I am happy to provide the contact details for community broadband Scotland to ensure that, if the communities that Adam Ingram represents want to get in touch, they know how to go about doing so.
Thank you very much, cabinet secretary.
I will move on and ask you to comment on the concerns that were raised by the Royal Society of Edinburgh, which essentially said that it is hard to see how current plans will enable us to reach the 85 to 95 per cent target, particularly with regard to delivering superfast speeds to 95 per cent of Scottish households and businesses by 2017. Can we get some assurances from you today that we are still on track to deliver on that target?
I have given those assurances in my update on the superfast broadband programme.
The research to which you refer is a piece of work that two professors at the University of Edinburgh have produced for the RSE. As one would expect, Government officials have looked very carefully at that research and its conclusions and assertions. We think that the modelling that it uses is based on some incorrect assumptions and that the analysis misrepresents some key aspect of our policy, targets and programme measurements.
It might be helpful if I summarise the situation. The research makes three key assertions, and we contest each of them. First, it asserts that the programme will not deliver on its targets. As I have indicated in my previous answers, the programme’s current deployment and forward planning indicates that the final deployed infrastructure will exceed our targets. We are confident, and I offer the reassurance that you are looking for that we will achieve the levels of coverage that we are contracted to achieve. As I indicated, the early roll-out indicates an increase in the contracted number of premises.
The second assertion is that we have no plans for the final 20 per cent. First, we do not agree that there will be a final 20 per cent—the programme is going to deliver significantly beyond 80 per cent coverage—and, as I have outlined, we have established community broadband Scotland for the most hard-to-reach areas. As we discussed, it is intended to work with communities that will not be covered in our main programmes to find solutions that will be fit for their purposes.
Colin Cook mentioned some extra money, which is the £21 million that has recently been allocated to Scotland as part of the superfast extension programme. That money will be match funded by the Scottish Government. We are still taking decisions on how to target that investment, but we will seek to use it to extend the reach of our programmes even further.
The third assertion that the research makes concerns compliance with state aid requirements on speed or transparency. This is a bit technical so forgive me for it in advance, but the state aid ratified next-generation broadband speed for the programme is 24 megabits per second and above; the research states that it is 30 megabits per second or above. That fact alone—that discrepancy—will, in itself, increase the number of premises that will receive the required speed.
We are fairly confident in our projections and the assumptions that underpin our programme in a number of key areas. I am not saying that it did this deliberately, but we feel confident that the research has misrepresented some of the key aspects of what we are doing.
The Royal Society of Edinburgh’s report—of which we were actually one of the co-funders—has made a huge and invaluable contribution to digital participation, which was the report’s main thrust.
What Professor Fourman and Professor Buneman have done is to examine publicly available information—there is no secret about it—on the performance of copper as a vehicle for delivering broadband. They raised questions, which everybody knows about, about how the further away from the fibre one is, the more the speed degrades. We have known that from the beginning.
We have built into the contract an innovation fund that allows us to find new and better ways of improving the performance of copper and we are bringing on new technologies, such as—at the risk of getting technical again—one called fibre to the remote node, which will change the infrastructure that will be put into the ground and change some of the assumptions. Of course, that information is not yet publicly available because we are working through the best ways in which to deploy the technology.
Some of the assumptions that underpin the evidence will change. That is why we are confident that we will deliver on the targets that we have published.
Thank you very much for that comprehensive answer.
In programme 2 of “Scotland’s Digital Future—Infrastructure Action Plan”, it was stated that a
“full plan outlining the options for delivering”
the Scottish Government’s
“world-class ambition”
would be developed by December 2012. We understand that that has not been done, but that in its place the Scotland’s digital dialogue has been developed to help the Government
“communicate and refine”
its
“plans to achieve that vision”.
Will the cabinet secretary comment on the reasons for that decision? Will she explain how the Government plans use the data to inform its future plans and when it expects to outline them?
In early 2013, as the committee is probably aware, we published a report called “Digital Scotland 2020: Achieving World-Class digital infrastructure: a final report to the Scottish Government”. That research helped to inform the 2020 vision that we set out.
We did not publish a full plan at that time, as you rightly say. That was a deliberate decision. We decided at that point that it would be more productive and more beneficial to encourage more productive stakeholder engagement and that we would get greater long-term buy-in from that if we set about consulting and trying to achieve commitment early on in the process rather than presenting stakeholders with a final plan on a take-it-or-leave-it basis.
That is why we went down the digital dialogue route. It was deliberately established to get stakeholders’ input and views on the kind of world-class digital Scotland that they want to see by 2020, and it was designed to stimulate debate on the options for getting there, which is obviously important.
On how we are moving forward on that, we recently appointed the Scottish Futures Trust to lead the world-class infrastructure workstream. It is clear to us that we need to have a developed and detailed understanding of how far current projects will take us to delivering the infrastructure elements of the 2020 vision. We need to understand what the gaps are and then how we will set about addressing them.
Key to all that is an assessment of the financing and delivery structures that would allow the public sector to stimulate the market and do so in a way that is more sustainable than the gap-funding approach that we take now. That could involve joint ventures, public-private partnerships or financial instruments such as project bonds, which the European Commission often favours.
The intention is that the SFT and the Scottish Government will by next year have developed a route map, which will set out the infrastructure requirements to achieve the 2020 vision and the commercial options for delivering on those requirements. The work is under way and discussion is on-going with key partners, including those in the telecoms and financial sectors.
We decided that a better way to proceed was to take almost a bottom-up approach of having dialogue to inform the vision, from which detailed work will flow on the often challenging practicalities of delivering the vision. That will result in the route map next year that I have spoken about.
I look forward to that.
In his response to the committee’s report on the third national planning framework, the Minister for Local Government and Planning said that the impacts of the digital Scotland superfast broadband programme will be most significant in rural areas, although some semi-rural and suburban areas will also benefit. Further to Adam Ingram’s questions, how far along is the Government in identifying the semi-rural and suburban areas that will not benefit from commercial roll-out or the Government-sponsored improvement programme? When will communities be given final notice of whether they will be covered?
Your final question relates to answers that we gave to Adam Ingram about the work that requires to be done, such as complex surveying work, and about the variables that are at play. The information that is provided about the communities that the programme will and will not cover must be reliable. I repeat that the website provides as much detailed information as possible and is giving communities more and more granular information.
As for your first question, I have read the response from the planning minister. He is right to say that the impact of the programmes will be more pronounced in rural areas, but I think—in fact, I know—that it would be a mistake for anybody to describe those programmes as specifically rural. The superfast broadband programme’s purpose is to improve coverage across all of Scotland, including rural, semi-rural, suburban and urban areas. The connectivity targets that we have set relate to all premises in Scotland, regardless of where they are.
This work should not be seen as a rural programme from which non-rural areas will not benefit. The investment even in perhaps the most urban part of Scotland—Glasgow, which is the city that I represent—will bring significant coverage improvements in comparison with what would exist in Glasgow if coverage was left solely to commercial deployment. As a result of the programmes, Glasgow will have 97.9 per cent coverage by 2017. If coverage was left to commercial roll-out only, the figure would be only 75.5 per cent.
The programme is benefiting all of Scotland but, for obvious reasons, some of the most significant impacts will be in rural areas, because that is where the starting point is lowest and where the challenges of commercial roll-out are most acute.
You pointed out that, through commercial roll-out and the Government-assisted programme, Glasgow will have 97.9 per cent coverage. What will coverage be in other regions? Will any programmes other than community broadband Scotland help the last 2.1 per cent in Glasgow—the figure varies across Scotland— to access superfast broadband?
10:30
I am happy to provide the committee with any information that I can. I can have a look after the meeting to see whether there are comparable figures for other parts of the country that we are able to give. Some of that information will be dependent on some of the work that is still under way. As I said, we are going to be as transparent as possible around all this work, so I am certainly happy to see whether we can provide comparable figures for other parts of Scotland.
Many of the exchanges that have already been announced in the programme are in semi-rural, suburban and urban areas—Aberdeen city, Dumfries, Glenrothes, Dingwall, Perth, Ayr, East Kilbride and Stirling are just some of them—which underlines the point that it is not just a rural-focused programme.
Your question about how we will cater for the percentage that will not be covered is a good one. Community broadband Scotland is the key part of the programme that is designed to do that. I am sure that the committee has the information, but I am happy to provide the information that I said I would provide to Adam Ingram—about how communities can engage with community broadband Scotland—to every member of the committee.
I mentioned the extra £21 million, which is a result of the extension programme. That will give us a bit more flexibility to look at some of the areas that, without that extra money, might not have been possible to reach within the programme. The world-class infrastructure programme that I have just spoken about, which the SFT is now leading, is able to look at where some of the gaps will be over the next number of years.
I am not going to sit here and go into all the technicalities of some of the challenges. We all know that Scotland is a country where one in five of our population lives in rural and remote communities. The Highlands and Islands project and the subsea cabling that is required for that is perhaps one of the most complex programmes of its type anywhere. It is challenging, technical work but the clear objective is that we do not want any community to be left behind, so we need to find innovative ways of providing broadband access, even if people happen to live in a very far-flung part of the country.
The project has always been seen as a partnership between national and local government. Many local authorities have invested additional money into the programme to ensure that their local priorities are met, so there is definitely available a breakdown of the likely coverage that will be achieved in each local authority area, which we are happy to provide.
Finally, in discussions that we have had with the Minister for Local Government and Planning, we have spoken about how broadband connectivity could be improved through the planning process, when new developments come on line. Has there been any assessment of the provision of broadband connectivity in new housing developments and whether those new housing developments are adding to the work that has to be done instead of being a solution through providing broadband connectivity as standard?
You are absolutely right to point to the important connections between the work that we are doing here and the planning system. You are certainly right to talk about the importance of making sure—as we have—that in new housing developments the infrastructure is built in from the word go, so that we do not have to go back later and put it in.
It has been identified through the Scottish Government’s building standards division that new housing developments are now being provided with broadband cabling and ducting at the outset of the developments as a matter of course. In some cases—with BT Openreach, for example—the broadband network is designed for the developers. The equipment is provided, the developers install it and they are then reimbursed after installation. That is all happening in new developments as a matter of course.
As you will be aware, how the planning system supports digital connectivity more widely has been one of the considerations in the review of the Scottish planning policy and national planning framework 3. The new versions of those documents are about to be published in the very near future—next week, I think. Beyond that, we are implementing additional permitted development rights to favour the deployment of telecoms infrastructure, which would cover both fixed line and mobile. As you will be aware, proposals on that are currently before Parliament. They are due to come into force at the end of June.
On all those key areas, the close relationship between what we are trying to achieve and making sure that the planning system is aligned to help us to achieve it is good work in progress.
Cabinet secretary, in your opening statement and in your evidence so far, you have made a lot of reference to the hard-to-reach areas. You have answered most of what I was going to ask you, but I wondered whether there are any particular technical blocks in the way and challenges that are still to be overcome to roll out the programme throughout Scotland.
I will let Colin Cook kick off on the technicalities, and then I will add something on the less technical stuff.
There are many technical challenges, but most of them relate to geography, distance and the requirement for fibre to be laid across vast tracts of ground, some of which are not overly amenable to being dug up.
Other technologies are available. We are exploring them and we hope to make announcements about the use of such technologies. Community broadband Scotland is exploring the use of other technologies in areas where fibre is not appropriate. However, our starting assumption is that we will take fibre as far as we possibly can because we think that it provides the best infrastructure on which to build future world-class connectivity.
Our demonstrating digital programme is also a good illustration of the work that we are doing. We have planned pilots around that, the purpose of which is to test new delivery services that could extend mobile services. In my opening remarks, I talked about the work on the Isle of Coll as the key example of that.
Yes, there are some significant challenges—that just comes with the terrain in Scotland—but there is also some quite innovative thinking, testing and piloting to find the best ways of overcoming them.
I get the idea from the reaction to it that my question was a bit of an understatement about challenges for Scotland and the terrain.
Yes.
That leads on to another question on hard-to-reach areas.
In his oral evidence to the committee, Robert Madelin from the European Commission described the communication infrastructure as
“a utility, and ... a crucial public good”.—[Official Report, Infrastructure and Capital Investment Committee, 7 May 2014; c 2986.]
Does the cabinet secretary agree with that description? If so, how does it sit with the fact that some Scottish residents will have to purchase special satellite equipment to have access to broadband services? In relation to the previous question about how challenging some areas will be for us, perhaps it will be impossible to provide the service other than through satellite.
At the risk of sounding as if I am trying to butter up the committee—which is never a bad idea—I met Robert Madelin just after he had been to give evidence to the committee and he was incredibly complimentary about how well informed members were about some of the technical issues. I pass on that praise in the hope that you will be nice to me for the rest of this evidence-taking session.
I broadly concur with Robert Madelin’s description of digital communication infrastructure as a utility. I discussed some of that with him. From our own experience of how we live our lives these days, we all know that it is perhaps a slight exaggeration, but not a huge one, to say that the ability to get online and connect to the internet is as crucial as the supply of gas and electricity to our houses. Yes, we need to regard that infrastructure as a utility, and that agreement—that broad concurrence with his description—is reflected in some of our vision and the documents that underpin what we are trying to do.
The investment that we are making in the superfast broadband programme, the commercial roll-out and some of the work that has been done on mobile connectivity are all part of trying to achieve the progress and improvement that would allow us to live up to that objective of the provision of those services being just as important as the provision of other utilities.
Fibre is very much the key delivery technology, although it is not the only delivery technology. There will continue to be others, including satellite, mobile and wireless technologies, which will all have their parts to play, but fibre is absolutely key to the programmes that we are involved in.
Overall, I agree with Robert Madelin. The work that he is doing in a European Commission context is potentially very helpful in ensuring that we are best equipped to deliver what we are trying to deliver in Scotland.
Given that the funding streams are there—I would regard them as a general population subsidy—vast numbers of the population will benefit from the investment that is leading to the infrastructure being put in place. Somewhere down the line, might the Government need to think about areas in Scotland—indeed, this applies to the European Commission in relation to areas throughout Europe—where it will be impossible to deliver that infrastructure other than through one-house solutions, the costs of which might be prohibitive? Might some consideration be given to individual subsidy at some point, albeit not at this time? Is that on the radar? Perhaps radar is old fashioned compared with the technology that we are talking about, although I do not think so.
I will let Colin Cook add something here if he wants to. We have to be prepared to think outside the box, to use that horrible cliché. It will become increasingly unacceptable in our society for people not to have decent access to digital services. That is a fact of life. We will have to continue to think about how we reach everybody, regardless of how far flung they are.
On the European element of your question, we obviously have to be compliant with state aid rules and regulations. Although it is more complicated than this, in broad terms, the delivery of the superfast broadband programme is very much geared towards those areas where the market will not go. We cannot use the subsidy to deliver that programme in areas that would otherwise be catered for by commercial deployment.
There is a continuing debate in the European Union about the use of structural funds in the next programme and the extent to which they can be used for digital infrastructure. We are very much of the view that using them in that way should be possible, but that is still the subject of discussion.
We have to be as innovative and creative as we can be to deliver what we seek to deliver, which is for everybody to have access to the technology that those of us who live in urban areas increasingly take for granted.
There is a very pronounced hockey-stick effect when it comes to the cost per premises as one gets beyond the low 90s in relation to the percentage of coverage. We monitor that under the roll-out programmes that we are currently delivering, and we consider the cost per premises. Different types of technology are more appropriate at certain levels.
On the subject of individual subsidy, a programme that provides businesses with a subsidy to get online for the first time is already operating, or is at least available, in Edinburgh, Aberdeen and Perth. Such things are within the group of options that are available to us.
I am very much a townie, but I have spent quite a lot of my life, from my youth until I was quite old, climbing all over Scotland. I am conscious of the benefit of the technology to community schools, post offices and such places. It is new, and we need to measure its value to the community and its effect on young families staying on in rural areas. We should consider the real value of its provision to the economy overall.
I could not agree more. I used to be the Cabinet Secretary for Health and Wellbeing, as you know, and we would often discuss the sustainability of local communities being very disproportionately impacted by decisions around local general practice services, pharmacy services or whatever.
The same is true for digital infrastructure. Increasingly, whether we like it or not, it is a fact of life that people will expect to have access to digital infrastructure so that they can access services digitally and live their lives the way that the rest of us do. Therefore, the issue is closely linked to the future sustainability and health of some of our more rural communities. We absolutely have to measure the cost of the investment versus the cost of not investing in those areas. Your point is an important one.
10:45
I think that Alex Johnstone has a question.
Yes—before we leave the issue of connectivity. I am never one to pass up the opportunity to raise a personal problem, although that is not really what I am doing.
I hope that I can help.
Superfast broadband arrived on my doorstep a year ago in a blaze of publicity—
Literally on your doorstep?
Not quite—that is the problem. When I tried to get the service connected, I was told that I could not have it because I am too close to the exchange. Apparently, I am connected directly to the exchange rather than through a cabinet. A lot of businesses in my immediate area are affected, including a local newspaper, a solicitor and an architect—the type of businesses that could benefit from the service. What is the prospect for such small areas in the centre of areas that have already been supplied with superfast broadband?
After I have assured you that the fact that you were not able to get it was not deliberate—
I am sure that it was not.
It was not because you asked me a hard question the last time I was at the committee or anything like that.
I will see if Colin Cook can have a go at the technicalities. If we cannot completely answer the question from a technical perspective, I am happy to come back to you on it.
It is not just a technical issue—the more important point is where it fits in in the structure.
Okay—I understand.
I am afraid that I am not familiar with Mr Johnstone’s living arrangements, so I do not know precisely where he is referring to. There are some such issues. Mr Johnstone will have been connected as part of the commercial roll-out, so the superfast broadband project might address the particular issue for his area, but I do not know. With permission, we should just come back with information on the precise area.
If Alex Johnstone can give us the detail of the precise area that he is talking about—although not his personal address—we will come back with an explanation of the situation and what the likely solutions are in the overall context.
Is it likely to be a widespread problem? Will it happen in other places?
We would need to understand exactly what the problem is before I can answer that.
It is an issue in a number of areas in rural Scotland that are connected directly to exchanges. We will come back with details on the plans to look at the whole issue.
Let us just make sure he does not get it.
We will move on.
Last year, the Carnegie UK Trust published its report “Across the Divide: Tackling Digital Exclusion in Glasgow”, which found that 62 per cent of people cited that one reason for not having a broadband connection was that they preferred to deal with people face to face. It also found that more than 90 per cent of people in specific groups, including older people, social housing tenants and the unemployed, are least likely to be online. What alternatives will there be for people who cannot or do not want to be digital in their dealings with public services to ensure that they have the same level of service?
Nobody should be forced to go down the digital route to access public services. All public services have an obligation to ensure that they are accessible to people, however they want to access them. I am aware of the generalities of the research that Mary Fee talks about. However, the reality is that the reason why many people do not access public services digitally to the extent that is already possible is because they do not have access to the technology that enables them to do it or the digital ability or know-how. It is important that nobody is denied access to the services that they need because they do not have access to the technology.
I think that I mentioned in my opening remarks the digital charter, which sets out our commitment with the ICT industry to increase participation. We have been talking about infrastructure, which is obviously important because, if we do not have the infrastructure, the rest of the discussion is academic. However, we need to ensure not only that we are talking about the infrastructure but that we enable people to use the infrastructure. The work on digital participation through the digital charter, which I can make available to the committee, is very important.
Public services, whether the health service or any other service, must cater for people who do not want to use digital. They must ensure that their services are accessible regardless.
Do you agree with Mr Maude’s estimate that £1.4 million through G-cloud funding has been spent on small and medium-sized enterprises in Scotland?
I assume that you are talking about Francis Maude.
Yes.
We agree broadly with that estimate. I am not sure whether everyone is completely familiar with the G-cloud system. Colin Cook can describe it in more technical detail, but it allows SMEs to make themselves available for some of the digital contracting work.
Our information from the Crown Commercial Service is that reported spend to date via G-cloud in relation to Scottish SMEs is £1.4 million. I think that that is the information Francis Maude gave at a recent conference in Edinburgh.
It is worth noting that, in addition to G-cloud, Scottish SMEs have gained around 29 per cent of Scottish public sector ICT spend, and the figure goes up to 40 per cent when you look at the services market specifically. There is no room for complacency because we want to see our SMEs benefit from the digital revolution, but the figures suggest that things are going in the right direction.
Thank you. My final question, which is again about SMEs, links to my first question. Do you have any estimate of the number of SMEs in Scotland that will benefit from the Scottish Government’s funding of the move to digital public services? SMEs and voluntary organisations in particular often provide support for the groups that are most likely to be offline, so they have an almost pivotal role in helping people not only to access the service but to get online.
That is an important question. I am happy to see whether there is more detailed information that we can provide to the committee around the estimated number of companies that are likely to benefit. The number of ICT suppliers in Scotland classified as SMEs was estimated back in 2012-13 at around 2,000—the figure is not bang up to date, but I do not think that it will have changed substantially. That gives you some idea of the number of companies that could benefit.
I said that approximately 29 per cent of our public sector ICT spend is with SMEs. We need to remove products and networks from that spend because those services tend to be dominated by big global companies. As I said, the 29 per cent figure goes up to 40 per cent in relation to service spend. I feel very strongly that our procurement and our general work on digital is about providing what we have described as a utility-type service to households and to businesses as consumers across Scotland, but we must also do everything that we can to ensure that our indigenous businesses benefit to the maximum from the economic opportunity.
The cabinet secretary said in her opening statement that we have supported the appointment of a director for digital participation at the SCVO. To pick up on Mary Fee’s final comments, the logic for that is twofold. First, it is about that individual and their team helping third sector organisations to become more digitally aware and understand the potential of digital technology to transform how they support people. Secondly, it is about helping and supporting those organisations, which enjoy the trust of many of the people who are offline, to engage more directly with communities. That double-headed approach to help develop the organisations and then to work with them to talk to and support the people who trust them is absolutely vital.
Thank you for that information.
Good morning.
Inevitably, a lot of our discussion has focused on the investment in infrastructure so that the roll-out of superfast broadband can be developed and delivered. I want to ask about investment in digital skills for employees and in upskilling employees, which has an important contribution to make to the development of the digital economy.
In your opening remarks, cabinet secretary, you mentioned a skills academy and spoke about the opportunities for placements in the further and higher education sectors. I would be interested to know more about those opportunities. In particular, how will you deliver the digital skills that are required and address the need to develop the different skill levels, from the most basic to the more specialised requirements, that will be necessary to deliver the digital economy?
That is a crucial question. You mentioned correctly that much of the discussion centres on infrastructure. That has been necessary because, for too long, the key constraints in Scotland have been the lack of infrastructure and the lack of access. We are fixing those things, although doing so will take time, and there are a multitude of challenges along the way.
We want to reach a position in which people can take the infrastructure for granted. That will not happen for everybody overnight, but that is where we want to get to. The focus should then move to some of the issues that Mary Fee raised, such as digital participation and whether our companies are poised and able to take advantage of the economic opportunities, as well as the digital skills that you mentioned.
We can look at digital skills in a number of different ways. There are skills that companies operating in the sector will need in order to be competitive and take advantage of opportunities, and there are digital skills for the population, which feeds into the issue of digital participation. I think that you were probably referring to the former rather than the latter.
In my opening remarks, I spoke about the “Skills Investment Plan For Scotland’s ICT & Digital Technologies sector”—which is quite a wordy title—that Skills Development Scotland published earlier this year. The plan is accompanied by £6.6 million of additional funding to help us implement some of its key recommendations.
The digital and ICT sector is very much at the top table among the industries that are powering Scotland’s success, so we have to get our strategy right. The sector employs 73,000 people and contributes £3 billion in gross value added, and the wages that it pays tend to be a lot higher than the Scottish average. I say all that to underline the importance of the question that you asked.
The skills investment plan is available for the committee to look at in detail, and I am happy to provide any further information on it that people require. Its key strands focus very much on the industry-led skills academy model, which will support transition training to meet the immediate skills needs of some of the companies in the sector. By 2016, 750 work placements for further and higher education students are planned. The work placement approach is aimed at helping in at least two areas. First, it should generate interest in those types of posts as a career option for young people in further or higher education and, secondly, it will ensure that the skills that companies need are in the pipeline.
Another part of the plan is about helping to improve employer engagement in schools and, moving downstream, to ensure that we engage young people’s interest while they are still at school in ICT and digital technology as a career option and educate them on what their options are.
Are you confident that the scale of the Government’s investment and the extent to which you are able to factor in resource from the private sector matches the scale of our ambition?
We have to keep these things under close review, and Skills Development Scotland is well placed to do that. The answer is yes—we are making a substantial investment, and there is a rigorous focus through the skills development plan on taking the action that will mean we will have the supply of skills that will be necessary if we are to fulfil the potential that exists.
The business case for the skills academy is just being finalised, and we will soon—assuming that the case is robust, as I believe it will be—be able to talk about how it will help the industry. The critical point is that it is being led by ScotlandIS and members of the IT industry.
The other point to bear in mind is that Scotland is not unique in facing the challenge of finding people with the digital skills that we need to support our industry. There is a deficit right across Europe, and we have to do things—
Let us move on to measurements and how we compare Scotland’s position with those of other countries.
We have to tackle the skills issue on two levels. We need to work with industry to close some of the immediate gaps, and we must work with the education system and others to look at the ways in which computing and ICT skills are taught in schools, as well as how teachers are kept up to speed on how the markets are developing. We are doing both of those things in the context of the skills plan.
11:00
Cabinet secretary, in the context of the digital economy strategy setting out the need to establish a robust measurement framework, what high-level indicators have been developed against which we can measure the progress that is being made in delivering our objectives in this area? Can you or Mr Cook tell us anything about how we measure Scotland’s progress in comparison with our competitor nations?
I will answer the first part of your question, and hand over to Colin Cook for the second part.
We are working with partners, particularly in the economic development agencies, and through that work we have developed—as you indicated—a draft set of high-level indicators against which we will measure progress in meeting our objectives for the digital economy. The indicators are designed to identify and measure over time the technology that Scottish businesses are using, how they are using it and what the benefits are. The indicators are grouped under four key themes: adoption, usage, benefits and skills.
Adoption is pretty obvious: it relates to the types of digital technology to which businesses are subscribing and gives us a clearer picture of that. The usage theme is intended to capture the ways in which businesses are using the various digital technologies, the intensity of their use and how that changes over time. The benefits indicators focus on the improvements in business performance that result from exploiting digital technology. Those improvements may relate to increased turnover, improved efficiency, the ability to reach new markets or increased innovation.
Under the skills theme, we will assess the digital skills that businesses are both demanding and using, which will help us to identify any skills gaps that are prevalent among the workforce. That relates to your earlier question about whether we are confident that what we are doing with regard to skills is sufficient. Some of those indicators will allow us to measure—not quite in real time, but fairly close to it—whether skills provision is sufficient or whether there are gaps that we need to address.
Questions have been developed for inclusion in the digital economy business survey, which will capture information in that area. The fieldwork for the survey is on-going and the first results are due to be published by the end of this year. That will give us the first suite of information against which we will be able to measure progress in the years to come.
Colin Cook may want to respond on international comparisons.
In each element of the digital strategy, we have tried to position and understand Scotland’s progress against those of other European countries. Part of that is implicit in our ambition to be world class—in fact, we state explicitly in our recent digital participation strategy that we need to aim for the participation rates in Iceland and Norway rather than those in countries closer to home, on which we have traditionally focused our ambitions.
How are we doing at the moment?
If we deliver on the infrastructure plans that we have in place in the next few years, we will be ahead of many European countries, but we are not yet at the level of participation that we need to be at. As I said, we are behind countries such as Norway and Iceland, where around 96 per cent of people are online already. That is a huge challenge for us.
We will be able to make a much better judgment of our position in the Boston Consulting Group e-intensity index for businesses when we get the results of the fieldwork. My instincts are that we will need to support and help to drive forward some Scottish businesses in that regard, although our ICT sector contains some of the most successful companies in Europe. The picture is mixed.
Thank you.
My question is on the same area. We have talked about infrastructure and training, but there are still areas of digital exclusion that could be dealt with. Specifically, there are people out there who will need help to access digital services. For example, the drive to move benefits payments online obviously has enormous advantages, but the extent to which people engage at that level remains a concern. What can we do to get people right across the scale to engage more with the available access?
That question goes to the root of whether all this investment in infrastructure will be worth while. We need to get the maximum number of people using it, which is why I have referred a couple of times to the digital participation strategy, which was published in April and endorses a definition of basic digital literacy. That includes essential online skills such as sending and receiving emails, using a search engine to browse the internet, evaluating whether to trust a website and knowing how to deal with privacy settings. It also looks at a person’s ability to share their personal information by filling in online application forms and accessing Government services online. As you said, the trend is moving more towards that, so it is becoming important. That is the baseline that we are trying to achieve so that everyone can access basic online services, and the digital participation strategy sets out how we intend to take that forward.
However, basic digital literacy should not be seen as the end goal. If we want to become a world leader by 2020, we must strive to go beyond that. We are working closely with the Scottish Qualifications Authority and Skills Development Scotland to create a much clearer pathway for people who want to go beyond the basics to much more sophisticated training and perhaps achieve qualifications that are recognised by employers and needed to get into further and higher education. We see it very much as a journey from the basic to the more sophisticated, but the absolute bottom line is that we need to ensure that everybody has the basic level of digital literacy that allows them to do the basic things online that many of us increasingly take for granted in our everyday lives.
I hear what you say about the criteria for assessing a basic level of digital literacy, but how can the information be used effectively to identify those who do not have those skills and need to upgrade their skills?
I have talked about the digital participation strategy, and Colin Cook and I have mentioned that we have appointed someone to work in SCVO on that. The idea is to develop community digital hubs and to have people active in different community organisations. I have also talked about a matchmaking service between people who are able to offer skills and community groups that need help in getting the people with whom they engage to the basic level of literacy.
A huge programme of work is needed. As you say, we must identify the people who need the help before we can help them, which is why all that work, which must be community based, is going to be important.
With the introduction of digital public services, the aim is to approach the issue from both ends. First, the services must be designed to be as accessible as possible. They must be designed with a focus on making them easy and attractive to use, and that thinking underpins the Scottish Government’s digital public services.
Secondly, as the cabinet secretary mentioned, working with SCVO and other partners—industry is playing an important role—we are building a network of centres and volunteers across Scotland who will be in a position to support people. As people need support, whether in using digital public services or for other aspects of their health, education or whatever, a support infrastructure will be in place to help them.
We want to use the opportunity of the introduction of wider digital public services to build skill levels and not just increase the penetration of services per se.
It is always said that large parts of Glasgow experience digital exclusion. Are we beginning to see the fruits of SCVO’s labours?
Yes. I know the landscape in Glasgow well, and a lot of innovative work is being done there. We are working closely with Glasgow City Council and the Wheatley Housing Group, which includes the Glasgow Housing Association, to help digitally excluded groups to become digitally included.
Digital Glasgow has citizen participation as one of its key priorities. The aim is for the most disconnected groups in the city—disabled people, elderly people, unemployed people and people who live in social housing—to become more confident in their use of the internet. There are some very innovative projects, such as a low-cost broadband pilot in a multistorey block that provides access for 79 tenants. The projects are quite cutting edge, which is what we need—not just in Glasgow but, given the levels of participation in Glasgow, they are particularly important there. I am not, by any stretch of the imagination, saying that we are there yet, but a lot of good work in Glasgow is taking us in the right direction.
We mentioned the Royal Society of Edinburgh’s report. It identifies what it describes as the network, which comes down to the fact that if the people with whom someone socialises—their friends and neighbours—are not online, they do not see why they should be. We have tried to address that in the plan that the Scottish Government and SCVO have put together by making a fund available for community groups more generally to take their content online. It is not just for ICT-type issues. A community group—whatever it might be—may get more out of a hobby or interest by building a network online, putting its content online or encouraging other people to go online. A fund will be launched to support that kind of progress, and we have heard that people in Glasgow and elsewhere will bid into that.
I presume that there are figures on digital exclusion. Are we seeing them improve?
We are.
We track those figures. This will be a long-term issue. Glasgow City Council is putting a lot of effort into it, and we are working with the council. As the cabinet secretary said, some of the projects, such as the Glasgow Housing Association and the Wheatley Housing Group project, are attracting national and international attention. However, it will take time for findings to come out of those projects and for us to learn the lessons and distribute them more widely.
I thank the cabinet secretary and Mr Cook, and I suspend the meeting to allow the cabinet secretary’s officials to swap over.
11:12 Meeting suspended.Next
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