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This is the last evidence session of our inquiry, which feels as if it has been going for quite a few weeks. We have three ministers with us today: Ross Finnie, the Minister for Environment and Rural Development; Malcolm Chisholm, the Minister for Communities; and Allan Wilson, the Deputy Minister for Enterprise and Lifelong Learning. I thought that it would be helpful to allow each of you to make a brief opening statement on the issues in your portfolios that relate to the inquiry; we will then have questions from members.
I will take the opportunity to introduce the officials accompanying us: Susan Reilly is from the enterprise networks division; David Wilson is the head of the fisheries and rural development group; and Jim Mackinnon is the Scottish Executive's chief planner. We also have an army of support, just in case things get difficult.
So there are no members of the public here today.
Convener, you might have been deluded into thinking that there were. We now have resources that we can call on, just in case you should call for a vote.
I, too, welcome this opportunity to appear before the committee to tell members about a number of areas that are relevant to my portfolio. I chair the Cabinet delivery group on closing the opportunity gap, of which Ross Finnie is a member, and I co-ordinate our strategy for tackling poverty and disadvantage. As members will know, I announced 10 new closing the opportunity gap targets last December.
My focus is on growing the economy, the contribution of Scotland's rural communities to securing economic growth and the consequential benefits that accrue to those communities. The fundamentals of strong economic growth are the same for our remote islands, the rural mainland and our cities. Throughout Scotland, we need to boost productivity, increase innovation and develop more added value in products and services. There are significant opportunities in some sectors; an example would be software development across the whole country. Other key sectors will have a particular focus. In rural areas, renewable energy, tourism, forestry and food and drink spring immediately to mind.
We have now heard from just about everybody. We have spoken to some of the key Government agencies; we have been to Brechin to talk to local people there; and we have had a lot of local authorities in to talk to us, as well as local enterprise groups and community groups. We have heard a range of views. I see that a couple of colleagues want to ask questions. Perhaps we can find out where these issues fit into Executive policy, as quite a few witnesses wanted to know that.
Ross Finnie said that statistics can hide the fact that some towns are doing well but others are doing badly. He also spoke of the value of building community capacity. What is the Executive doing to encourage capacity building? In my view, we need to take a bottom-up approach. Various suggestions have been made, ranging from bringing back town councils to appointing town managers. There seems to be a feeling that many towns do not have anyone who is focusing on them in particular. To get things going, a town has to have a dynamic and it has to have energy.
I will have a first crack at that. I would be interested to hear the outcomes of the Muir of Ord discussion, because there is a difficulty with establishing precisely what the great concern is in such cases. With remote villages, the focal point is clear—if it does not function, almost everything else does not function. However, throughout the Executive, we find that the difficulty with accessible towns is that people are not dependent on the town for some elements—by definition, people who live in accessible towns can access services elsewhere.
I am not sure whether you want me to answer that.
No, I do not. We consider the issue: we monitor how health and other policies operate throughout Scotland and we are anxious to see that they are delivered.
Do you agree that the fact that people in towns and villages can access services elsewhere, particularly retail services, is what takes the heart out of those places? That brings me on to the gap in support for retail businesses. Highlands and Islands Enterprise does not support retail start-ups or existing retail businesses in the same way as it supports manufacturers.
Again, I draw the distinction between remote rural areas and accessible rural areas—the issues are different. In accessible rural areas, the market has to play a role. The potential for services generally, and particularly retail services, to be provided within an accessible area creates conflict. However, that issue is different from the issue of retaining services in remote rural areas, about which we have concerns. In such areas, we need to bundle facilities together and provide facilities that are not used exclusively by one particular service. As you know, we are always battling to ensure that post offices and a range of other services are bundled together so that they are provided in remote areas.
We were told by the witnesses at our Brechin meeting and by Highlands and Islands Enterprise that retail businesses are important. Specialist shops can survive in smaller towns, but the trick is to persuade city dwellers to come out to those towns for specialist shopping. However, how do we get the specialist shops there in the first place? Who supports the start-up of such businesses?
The local economic forums are charged with the development of local economies. The critical partnership in addressing the needs of small towns, whether in relation to the retail sector or any other sector, is between the local enterprise company and the local authority. I expect the local economic development department of any local authority that is worth its salt to have a strategy that addresses retail development in whatever small towns happen to fall within its ambit. The authority should work out with the local enterprise company a strategy by which they might address retail failure or economic failure in an area. That is where I put the focus.
A lot of this is down to economic development. From a planning point of view, I can say that a new Scottish planning policy on retail will come out soon. Realistically, there are some hard choices. For example, does one allow the expansion of retail in Inverness? If so, there will obviously be knock-on effects on smaller towns in the surrounding area. Some hard choices are involved—the SPP will outline some of those issues. In general terms, we should obviously be supportive of retail development in small towns.
As three pillars of sustainable development from the Cabinet are at the committee, I will ask a question about sustainability and the city regions. There are concerns in a number of small towns and large villages—accessible rural communities—throughout the central belt that their development under the city regions will not be sustainable.
I know about the controversies around the housing development that you mention. There are particular issues about what is in an area in relation to a city region plan and the timescale for the plan kicking in. In general terms, we think that it is important to look at the issue over a big area and consider it from the point of view of balanced communities.
Does Allan Wilson want to pick up on the point about business in smaller towns?
Green growth may sound like a contradiction in terms to Mark Ruskell, but the green jobs strategy was obviously an attempt to address the global shift towards more sustainable development, to see how it applies here in Scotland and to build sustainable communities by growing green jobs in those communities.
I was not talking only in terms of green jobs. Although I welcome the development of renewable energy, local food economies and so on, I was thinking about mainstream jobs and the need for people to be able to work where they live. I know that it is not realistic to expect that everyone will be able to do that, but there are concerns among communities that workspaces are being designed out of their areas and that, in effect, they are being forced to commute because they have no alternative but to work in the city. Clearly, that poses a number of problems.
Is not that one of the reasons why we must welcome the city region concept? It would be wrong to take a silo approach and to develop every aspect of planning within a city boundary using a city focus rather than taking account of the city region and what is sustainable. I am not suggesting for a minute that we have delivered on all of that, but one of the principal reasons why, as a matter of policy, we are keen to adopt the city region approach is that it forces us to get out of those silos, to ask the questions that Mr Ruskell is asking us and to put the answers to those questions into a framework that ensures that regard is had for how people live, who lives where and how space can be allocated. Our approach must not assume that everything should be provided in the city, because that would leave sustainability of towns out on a limb. The city region approach gives cohesion to the sustainable framework.
I do not want to get too involved in the details of what is happening in Tayport, but from the housing point of view, the point that Ross Finnie makes is relevant to what needs to be done in development of the Dundee city region. The city region approach is fundamental and, along with other matters, is extremely relevant when decisions are made about whether greenbelt land should be developed.
We have talked in the chamber about the fact that the issue that we are discussing relates to structure planning and local authorities. However, in terms of investment from the Scottish Executive, there will clearly have to be some form of prioritisation in relation to water services, for example. Do you have a way of prioritising what you see as the biggest hits in terms of sustainability and economic development, or is it being left up to local authorities to say what developments they want to prioritise?
That is called closing the opportunity gap, which relates to the cross-cutting agenda that I believe is fundamental to sustainable development. That is the case because, unless you create economic and employment opportunity and the local jobs to which Mr Ruskell referred, large sections of our society will be excluded from economic growth and the benefits that it brings. Procurement policies and economic development policies are designed to focus resources where they are most needed, which means that we can reduce the opportunity gap and deliver a more sustainable society. A lot of the work has an urban focus; for example, in terms of regeneration strategies, it is as important to get people back into work in the vicinity of urban regeneration projects as it is to bring in economic opportunity from outwith an area.
May I ask the minister to talk about water services, which is a specific example of—
It is a specific example, but I would like to broaden the matter out. I am not able to answer your question entirely, for reasons that will become clear.
Thank you for that trailer. I think that we will get into trouble if we say any more about that today.
Indeed.
I want to ask broadbrush questions about general policy. As we all know, the partnership agreement includes a commitment
The primary sector as a whole in Scotland accounts for a very small percentage of gross domestic product. Our national statistics show that agriculture, for example, accounts for no more than 1.3 per cent of Scottish GDP and that fisheries account for less than 1 per cent of GDP. However, in rural areas such as the north-east of Scotland and the south-west of Scotland, agriculture accounts for in excess of 25 per cent of GDP, and fisheries account for 20 to 25 per cent of GDP in Mr Morrison's island communities and for 35 per cent of GDP in Shetland.
I suppose that the strategy in "The Framework for Economic Development in Scotland" and the smart, successful Scotland strategy provide the overarching framework within which we would measure rural development and economic development more generally. As I have said, there are key focuses in those strategies that relate to rural development—I refer to clusters such as textiles, food and drink, renewable energy, tourism and forestry, which I mentioned earlier. Those are all key areas that identify the enterprise networks as offering growth opportunities for rural Scotland, in particular for some of its most remote parts. That can be measured using general indicators, including sustainable development, GDP growth per capita, employment, the number of jobs that are created and the reduction in the number of unemployed people in those areas.
Scottish planning policy 15 is consistent in respect of the partnership agreement commitment in this area. It stresses that
I return to the point about a bottom-up approach to achieving big changes in rural areas. There seems to be a link between responsiveness and responsibility, such that people at the most local level want to take responsibility for some decisions. There is also a clear need, because of the Executive's idea of city regions, to take a wider look at the planning requirements of particular areas. Surprisingly, the district and regional councils in the past gave such responsibilities, although the district councils were not, in my view, local enough.
I have some sympathy with that approach. It is now long since the day and hour when I came to this place, but I remember considering matters of business growth and economic development when I was a member of the Enterprise and Lifelong Learning Committee of six years ago or so. From that consideration came the local economic fora, which were designed to address some of those issues of place.
I share Allan Wilson's view. We are not sure that we are making the best use of the community planning framework. Given that we seek a bottom-up approach, I am hesitant to lecture people about what they should do and how their community planning partnerships should be made up—there is a dilemma.
In general, things should be done at the appropriate level. I am interested in having as much local decision making as possible, and in decentralisation of the community planning arrangements that generally operate at local authority level. One of the key areas for me is community regeneration. We are keen for that to happen and for there to be great emphasis on involving communities in decisions about community regeneration.
Can we learn any lessons from our near neighbours who are organised slightly differently? I know that Ireland has a very weak form of local government, but what about the situation in the Scandinavian countries? The paper that the Scottish Parliament information centre has provided tells us that Finland has 19 regions and 432 municipalities and that there are 19 counties and 434 municipalities in Norway. Those bodies share the power to make decisions about city regions, on the one hand, and about very local issues, that in many cases affect fewer than 5,000 people, on the other hand. Such a model could ensure rural proofing of the Executive's policies by giving people responsibilities at the appropriate level to implement policies, as well as to plan.
It certainly sounds as if that model is worth considering. I would not like to make a snap judgment on it, but it has its attractions.
I believe that there is a role for spatial planning in economic development. Iomairt aig an oir is an interesting initiative in that context, as it brings together community planning partners in the more remote parts of Scotland that face the same economic obstacles and allows them to plan collectively to address those obstacles, while stimulating flexibility and a bottom-up approach. I know that some of our Scandinavian neighbours are interested in that type of development, which we do very well.
My first question is directed at Allan Wilson, who holds the enterprise portfolio, as well as at Ross Finnie, who is responsible for rural development. It concerns the extra costs of operating a business in rural communities. One issue that often crops up is the higher cost of transport for businesses in rural areas that wish to get their goods to markets. Has the Government investigated the extent to which additional costs are attached to operating private businesses in rural communities and what measures could be taken to address that issue?
I hasten to say that I am not the Minister for Transport, but we obviously take a joined-up approach across Government to the impact of any factor on our overall priority of growing the economy. I understand that transport costs in Scotland are at or near the European Union average, taking into account all the factors that contribute to haulage costs, from road tax and fuel duty to the absence of road tolls. I believe our situation to be competitive, but that is something that we always keep under review and something that the Chancellor of the Exchequer keeps a close eye on in setting taxes and duties that are applicable to those industries. As you know, we also take initiatives here in Scotland to ensure that rural areas can compete with their urban counterparts. There are a number of such initiatives, such as the rural transport fund and the rural petrol stations initiative, which assist in the agenda of ensuring that rural Scotland is as competitive as it can be with urban Scotland and that there is a level playing field.
One of our most significant transport initiatives—I am not the Minister for Transport, either—has been the attempt to encourage commercial companies that use timber products to get their timber on to rail. We fund initiatives that have taken many hundreds of thousands of road miles on to our railways to allow timber companies—obviously I cannot speak for Stewart Milne Timber Systems, but that is the kind of company that I am talking about—as well as major food retail companies to get their food on to rail. We have invested considerably in that.
The next question is from Nora Radcliffe.
I think that Alasdair Morrison wanted to come in on what Richard Lochhead said, so you might want to let him in first.
If his question is brief, I shall let him ask it.
I want to ask Ross Finnie and Allan Wilson whether they monitor the progress and impact of certain policies. Has there been analysis of the impact of positive measures such as rural petrol station grants, the reduction in road tax for hauliers, the abolition of road tax for island–based lorries and the 50 per cent reduction in rates for rural shops and outlets? Do you follow up such measures and track their impact?
I should have mentioned that we provide, as part of our support for the rural economy, substantial support for shipping as much timber as possible, which is another subsidy.
A reasonably swift answer would be helpful—I am reminded that we will not meet next week, so the minister has a few weeks in which to reply.
How kind.
In rural areas, the voluntary sector sometimes picks up services that would not be viable in the commercial sector. Does the voluntary sector have a more important role in rural areas? How do the ministers factor the voluntary sector into their policy thinking? I am thinking of matters such as funding and support for the sector, service provision and how we check standards and ensure that there is accountability. The possibility that voluntary sector activity might threaten a marginal commercial enterprise is not always considered. Do you think about the voluntary sector in relation to rural policy?
I certainly do. I take a lot of interest in the voluntary sector in relation to policy, but I regard the sector as being important across the board and I have not regarded it as being more important in rural areas than it is in urban areas, although perhaps that is a failing. Ross Finnie might comment on rural areas, but as I said in the recent debate in Parliament on the voluntary sector, my general approach is to value the sector.
The work that my department has done, and continues to do, on rural service provision is entirely co-ordinated through the Scottish Council for Voluntary Organisations. We give a grant to SCVO to assist us in monitoring difficulties or improvements in the provision of services in rural areas—that takes us back to Alasdair Morrison's point. We very much acknowledge the crucial role of the voluntary sector, which is why we engage with the sector and communities as we try to ensure that there is a wider range of service provision in rural areas. The follow-up work is done by SCVO.
The establishment of the co-operative development agency for Scotland is an interesting development in the context that we are considering. As members know, co-operatives are major drivers of rural economies in continental Europe and rural co-ops play an important role in certain parts of the food chain in the United Kingdom. The agency's creation gives us an opportunity to expand the influence of mutual companies in a positive way, by creating better economic and employment opportunities in rural Scotland.
That is a useful point, which has come up in one or two evidence sessions in the past few weeks.
As you know, I agree with that. I would prefer the focus to be put on places—market towns, or whatever you want to call them—that have suffered historically as a result of the demise of mining, steel working or other traditional industries that moved away and where those jobs were not replaced by the expansion in service sector jobs, which has been a feature of other regenerations. As I understand it, community planning is designed to focus attention on bringing together the agencies and addressing those issues. I favour a greater focus on areas of greater need.
Many people have mentioned the LEADER project as a flexible source of resources that allows them to do creative and interesting things. Is that a long-term option for the kind of places that we are talking about?
Are you talking about structural funds?
It is the one big positive thing that different agencies have mentioned as something that lets them do creative things locally.
Historically, structural funds have had an important part to play in terms of our ability to tap into sources of regional aid that can then be used proactively at a local level to address some of those issues. How much longer such funding will be available is obviously an open-ended question. Regardless of whether the funding is domestic or from Europe, more flexibility in regional policy is needed to address those issues.
As of 2007, the LEADER project becomes the fourth axis of the rural development regulations. As I suspect some of the witnesses have said, LEADER has been used heavily in rural areas. It will transfer from the industry side to become the fourth axis of the new rural development regulations.
Building a better Buchan.
Indeed—all the Bs. That demonstrates that there is a framework within which such things can happen. I readily acknowledge that that does not happen uniformly across Scotland.
Does Malcolm Chisholm have any thoughts on that?
No.
The Executive aims to create a rural Scotland in which young people do not have to leave to get on. When we visited Fife, we heard evidence in Lochgelly that young people cannot access work because they cannot afford the bus fares to get them to the jobs because the jobs are too low paid. There is a vicious circle whereby people have to leave their home town if they want to get on; if they stay, they do not get on. Is that what is happening in the accessible towns? There are also issues around young people's access to leisure and further education. Again, transport difficulties may be involved.
That is about providing employment, training and educational opportunity for the young people concerned. I do not have the statistics to hand, but I remember seeing a figure for last year for the number of graduates in employment whom we have retained in Scotland following graduation; I think that that figure was around the best it has been. In addition, we have more than doubled our modern apprentice intake to record numbers—the figure is something like 34,000 across Scotland. Educational opportunity is increasingly being made available across the board.
Over the past 13 or 14 months, the enterprise network and Scottish Enterprise in particular—as distinct from Highlands and Islands Enterprise—has helpfully taken on a distinct rural development role. Indeed, it has appointed people in positions of authority to drive that forward. A much more co-ordinated effort is being made between the central economic thrust—under FEDS or a smart, successful Scotland—and fine tuning such policies to address the issues for the core of people who are not commuters in the accessible rural areas that Maureen Macmillan mentioned. We were missing those people off the edge and much of the focus of the work that the enterprise network is doing in our accessible rural areas now has them very much in mind.
That is true. In that regard, it would be remiss of me not to mention the establishment of Scottish Enterprise's rural group, which is concerned with co-ordinating activity that has a rural dimension across the enterprise network, ensuring development and rolling out and sharing best practice so that every area can benefit. It is about the vision thing and developing five to 10-year strategies for places for which the economic future might not be mapped out because the traditional dependence is no longer applicable. That requires community planning and local partnership, which is critical.
We are going round in a circle.
That is right. I do not believe and have never believed that we can dictate community planning from Edinburgh. As others have said, it is not possible to do that.
I suppose that I could throw in a comment about housing, as nobody is asking me questions about it. Housing is another crucial issue. I agree with Allan Wilson about employment and employability, but that is another reason why we need and have a range of initiatives on affordable housing, which will perhaps affect young people even more. I mentioned some of those initiatives, but I did not mention the enhanced funding—more than £50 million last year—for land purchases for affordable housing. That is another string to our policy bow. I know that Maureen Macmillan is particularly interested in and concerned about affordable housing, and I am conscious that we must keep doing more on it.
I have a question about rural proofing—that is, systematically checking policies across the Executive for their impact on rural development. I understand that, although there used to be a Cabinet sub-committee on rural development, it has been in abeyance for some time. How does Ross Finnie, as Minister for Environment and Rural Development, get an overview from colleagues, ensure that they are accountable and ensure that rural issues are considered systematically? How does he ensure that that consideration does not take a one-size-fits-all approach, but picks up the issues for remote rural areas as well as for accessible rural communities or small towns?
The officials in my department who have responsibility for rural development have the important but sometimes hapless task of receiving more paperwork than they would care to, because we are on the distribution list for almost every major policy that is being developed throughout the Executive. I do not want to be unfair to my colleagues, so I must say that that is because there is a higher level of awareness that the delivery mechanism for a policy might need to be developed differently to suit the different circumstances in rural areas. We are in meetings or correspondence on a raft of issues and our single focus of attention is, somewhat boringly but we are proud of it, to determine whether a policy relates to remote or accessible rural communities and whether it will fit that dimension. We continue to have an input on that throughout the Executive. In many ministries, that does not require much work, because ministers and, increasingly, officials are much more alive and alert to the issue. However, sometimes, a policy has developed in a way that is fit for its specific purpose but not for delivery in a rural area, and it is our job to ensure that, before the policy emerges, that point has been addressed.
The issue of proposals for rural school closures was discussed at the Public Petitions Committee today. Many MSPs were in attendance to discuss it and many people from the various campaigns against school closures throughout the country held a rally outside the Parliament. When we speak to the representatives of communities that face school closure proposals, the recurring theme is that it is in the interest of rural development that the schools stay open. Are such issues on the radar screen in your department and have you had any discussions with the Education Department on the current debate on rural schools and their role?
Yes. Peter Peacock, the Minister for Education and Young People, has a series of criteria that he invites local education authorities to fulfil before they should even think of making a proposal that might involve the closure of a rural school. When those papers are being circulated to the Executive, we are specifically included, so that if we have any additional information or knowledge or just because we deal with rural communities as a matter of course, those issues are put to us. We are invited to give assistance and guidance to Peter Peacock's department before such papers are given to the minister for his specific approval. There is a system for the development of criteria that should be applied before a school closes.
Is there any evidence that such intervention has had an impact?
In the most recent cases that I can recall, the criteria that were set were properly investigated and met. There was a case in which the Education Department was not satisfied that the local authority had examined the criteria properly. We are keen to ensure that the criteria are objective and that they are followed before any rural schools are approved for closure.
A couple of colleagues desperately want to come in. Alex Johnstone and Rob Gibson can keep their questions brief, because I understand that the petition is likely to come to the committee. You were at the Public Petitions Committee, Richard—is that what was decided?
I was not there for the full discussion.
Mark Ruskell was there and we understand that the petition might be coming our way. As a result, we do not need to have a full discussion now, but colleagues may make a couple of brief comments.
One of the things that became increasingly clear during the discussion this morning was that the Executive's criteria might be adequate for dealing with school closures, but there is an apparent failure to ensure that the criteria are properly applied. Is there any way in which the whole procedure could be studied to ensure that the criteria for school closures are properly applied and not merely used as a pretext for a sham consultation, which often appears to be what is going on in certain areas?
That question ended in a fairly pejorative tone, if I may say so.
Alex Johnstone has made his point quite effectively.
He is on the record.
Yes, he is. Rob Gibson may have a brief follow-up question.
If the minister does not know the answer to my question, perhaps we ought to find out. Are accessible rural areas worse hit by potential school closures than remote rural areas?
That is definitely not a question to which I expect an instant answer.
It is germane.
It is germane to the topic, but we need to rope together all the issues—
I made it clear when we made our opening remarks that there was a danger of generalising about such areas. Our general evidence would not suggest that, Mr Gibson, but we cannot say that without then saying that closing a particular school in a particular place might have a much more deleterious effect on one community than it would on another. However, our evidence in health and education does not suggest that that is generally true.
One of the issues that was brought to the committee in Brechin—by petitioners who I think were before the Public Petitions Committee today—was Arbirlot school. We have not pursued that issue in depth. Should the petition come before the committee, I will take up the minister's offer of further information from himself or from Peter Peacock. If the petition does not come to us, we will ask our clerks to liaise with your officials during the next few weeks if we need the information for our inquiry.
Meeting suspended.
On resuming—
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