Official Report 382KB pdf
Deputy First Minister Responsibilities, Finance and Local Government, Parliamentary Business and Veterans
14:15
We move to portfolio question time, and the first portfolio is Deputy First Minister responsibilities, finance and local government, parliamentary business and veterans. I remind members that questions 1 and 3 have been grouped together and that I will take any supplementaries to those after both questions have been answered. If a member wishes to request to ask a supplementary question, they should press their request-to-speak button during the relevant question.
Non-domestic Rates System
To ask the Scottish Government when it will bring forward proposals to reform the non-domestic rates system. (S7O-00029)
The issue is on my immediate agenda. The Scottish Government is constantly evolving and reforming the non-domestic rates system, given the ever-changing circumstances that businesses find themselves facing. We specifically consider retail, hospitality and leisure sectors.
Very soon—before the summer—we will meet business leaders from across the sectors to start the process of a comprehensive review of non-domestic rates, which will build on our commitment to examine the impact and configuration of all our reliefs in advance of the next revaluation, on 1 April 2029.
I am not alone in calling for reform of non-domestic rates. New Scottish National Party MSP Jack Middleton has said that there are “flaws in the system” and that the issue is a “top priority”. Even the SNP manifesto promised to rebalance the system.
I have spoken with people from businesses in Moray, including funeral parlours and clothes shops, who have described real pain and uncertainty about their future. We need a clear timeline for change. I do not expect a full timeline right now, but will we get a ministerial statement that draws out what the minister has said, so that we and all businesses in Scotland can be absolutely clear on the timeline for change?
Next week, there will be a statement to provide a medium-term update on the budget. As I said, a meeting before the summer with business leaders from the six priority business areas is on my agenda, and the issue will be a priority as we go into the summer recess.
Non-domestic Rates System
To ask the Scottish Government how it is taking forward plans to rebalance the non-domestic rates system. (S7O-00031)
As I said, we want the non-domestic rates system to offer the best environment for businesses in relation to business growth, investment and competitiveness, to ensure that businesses have predictability, stability and a line of sight as to what is coming down the track. I also acknowledge the important role that non-domestic rates play in providing just over £3 billion in funding for our public services.
A comprehensive review of non-domestic rates will be starting, and we will engage with businesses so that they can shape how the system will operate in a fair, transparent and accountable way in the future.
The minister will be aware that there is a big issue with empty properties and that local businesses regularly raise concerns about the costs of and barriers to taking on such premises. The United Kingdom Government will be investing £20 million in Kirkcaldy town centre. Does the minister accept that we need a business rates system that actively supports new businesses to occupy vacant units and enhance our high streets? When can we expect progress on potentially widening the scope of the fresh start relief, as was agreed by the Parliament last week?
As the member knows, we have agreed to the fresh start campaign that we discussed last week—the amendment on that came from the Labour benches. We are looking at that as the only relief of its type that we have in Great Britain. We are very mindful of the tax avoidance risk associated with the relief, so, when we are considering the review in the round and moving forward with the reform of business rates, the fresh start relief and occupying empty properties will be part of that.
The question that Claire Baker just asked is very important. When I asked the First Minister what his support for DC Thomson’s fresh start campaign was worth in terms of action, his answer was very vague and non-committal. I am afraid that the minister’s answer there was pretty much the same.
I ask this directly: does the minister support the fresh start campaign? If so, what concrete action will she take to implement it?
The member will be aware that we had the debate on the matter only last week. We are committed to exploring and working on it. We are working with officials, and I will be happy to write to the member as we firm up our timeframe, as I will meet the business leaders before the summer. The campaign is hot off the press; it is something that we are working on. I will be happy to write to the member when we have a timeframe in mind.
I point members to my entry in the register of members’ interests as a sitting councillor in Falkirk.
Tax increment financing has been incredibly successful in Falkirk in unlocking the economic potential of the area, delivering 2,000 jobs and £36 million of infrastructure in the first half of a 25-year project. What assurances can the minister give that any changes to non-domestic rates will support and enhance TIF schemes, such as the successful example in Falkirk district, so as not to put such vital economic growth at risk?
Six TIF projects were set up as part of a pilot scheme. The impact on place and on the local economy will be assessed as the investments near completion, allowing ministers to come to a view on further use of the funding tool.
The review of non-domestic rates will be comprehensive and will include consideration of how the NDR system can best support and encourage growth and investment.
The recent removal of listed buildings relief for rates has caused a number of unintended consequences that have been very damaging. The cost of servicing the rates for empty listed buildings and of raising the capital to renovate them has proven prohibitive for many projects. Will the minister undertake to review that, together with the Convention of Scottish Local Authorities, and to introduce an appeals process, where that makes sense, to allow for reliefs to enable renovation?
That is something that I am happy to take away and have a look at, as I take the discussion forward before the summer. I would be quite happy to engage with Mr Sweeney on that before the summer recess.
It is welcome that the minister has given a clear commitment to consider carefully what improvements the Government could make as quickly as possible to ensure that all businesses can continue to invest, rather than have issues arising with business rates impeding their success. Will the minister expand on the steps that the Scottish Government will be taking, as part of the process, to engage with business stakeholders more widely, outwith hospitality, to ensure that their voices, too, inform any decisions made?
As I have said a couple of times, the first step will involve a comprehensive meeting with business leaders from across the portfolio on six priority areas—leisure, hospitality, tourism et cetera—to ensure that we gather views, that I listen and that we understand the asks and the offer; to ensure that Scotland is a place where business is welcomed; and to give predictability, stability and, ultimately, the ability to grow the economy.
That meeting will be happening just before the summer as we take forward the review, through the recess into August and beyond.
Local Authority Pay Negotiations
To ask the Scottish Government what discussions it has had with the Convention of Scottish Local Authorities regarding the pay negotiations for 2026-27. (S7O-00030)
I had an introductory meeting with COSLA on 28 May and I will meet it again, along with the Cabinet Secretary for Public Service Reform, next Thursday.
Although the Scottish Government has no formal role in local government pay negotiations, we worked closely with COSLA to confirm funding flexibilities and additional funding. That allowed COSLA to provide a fair and affordable two-year pay deal, which was worth 7.64 per cent across 2025-26 and 2026-27.
After years of cuts, councils are struggling to put an offer on the table that meets the cost of living pressures for their staff. Year after year, we have disputes and disruptions—there has been rubbish piling up on Edinburgh streets during the festival and school and nursery closures—and, annually, there is intervention from the Government to resolve them. What more constructive, regular discussions can happen between national and local Government to break the cycle of disputes and late interventions to solve them after the public has already faced disruption? How does the Government plan to formalise those discussions?
Mark Griffin will know that, in my former role, I spent a good amount of time with our teaching trade unions and local government, trying to negotiate an agreement in relation to reducing teachers’ class contact. Through joint negotiation, we were able to do that, but it took time. Unnecessary stress was caused for parents and carers because we thought that we might be in receipt of some industrial action—so we had to work at pace to get to that point.
As the Deputy First Minister, I do not want to get to that stage. I want us to have a much more strategic approach to negotiating in relation to pay. Work on that was led across the Government by my predecessor and I want to continue it. I had a helpful discussion with Roz Foyer, who joined the event about public service reform that the cabinet secretary and I attended on Monday; we talked more about how we can have that strategic overview. I would be more than happy to hear any suggestions that Mr Griffin has on that.
We must work in close partnership with local government and our trade unions. The member’s point in relation to the disruption of services is well made. I will take forward the suggestions that he has made to that end in our engagement with COSLA next Thursday.
Earnings Growth
To ask the Scottish Government what its response is to warnings issued by the Institute for Fiscal Studies on 27 May 2026 that, if earnings in Scotland grow in line with the rest of the United Kingdom, Scotland could face a deficit of over £6 billion by 2030. (S7O-00032)
Governments across these islands face significant pressures on public finances. Those challenges have intensified in recent months due to global instability.
Last summer, we published the medium-term financial strategy, which sets out the scale of the challenge and the action that is required. That was reinforced through the spending review and portfolio efficiency and reform plans, which were agreed in January, led by cabinet secretaries across the Scottish Government.
In addition, last week, I met the IFS to discuss its report and findings in more detail, including the learnings for the Scottish Government, to inform our next steps.
The interventions that the Deputy First Minister references were made when we thought that the budget deficit would be £5 billion. If the projections for earnings growth turn out to have been more optimistic than what actually transpires, it is likely that that deficit will increase by a further £1 billion. The Scottish Government has a budget of around £60 billion, and that would be a deficit of £6 billion—around 10 per cent of the entire Scottish budget.
The IFS has said that Scotland
“faces a fiscal reckoning—with spending cuts or tax rises on the way”.
Which one of those will it be?
I hope that Ms Young knows that I am taking a keen interest in those matters, given my responsibilities as Deputy First Minister. However, I have to work in partnership with the Cabinet Secretary for Public Service Reform. That is exactly why the event that we held on Monday was so important to that end. The Government has to work to meet and balance our budget every year—Ms Young will well understand that we do not have borrowing powers that exist in other parts of the United Kingdom. The discussion that I had with the IFS was important, as was the engagement that we have already had with the Scottish Fiscal Commission.
It goes back to the work that Ivan McKee is leading in relation to public service reform. I want to engage cross party on that, which is why I have been in contact with all parties to set up initial meetings in that space. I know that Michael Marra is keen to engage on those steps, and I would be more than happy to engage with Ms Young, too. We must work collaboratively to respond to the situation. That is the most appropriate and responsible action that a Government can take.
Last week, when I asked in the chamber how the black hole would be filled, the Cabinet Secretary for Public Service Reform replied that it would be public service reform that would fill the gap. At the same time, he said that public service reform was not about reducing the overall spend on public services. Those two statements cannot be true at the same time. Which is it? [Interruption.]
I can hear Mr McKee disagreeing with Murdo Fraser’s description of his contribution last week.
As I said to the member previously, we need to work on the issue on a cross-party basis. I am more than happy to hear any suggestions that Murdo Fraser might have. Of course, the budget-setting process in Scotland would be a lot better had we not had Liz Truss’s mini-budget, which made things far more challenging. Had we adhered to some of the tax cuts that Ms Truss was advocating for some time ago, we would have been poorer to the tune of £1.8 billion.
However, I repeat that I am more than happy to take any further learning that Mr Fraser can offer the Scottish Government on these matters.
The Deputy First Minister said that she met the Institute for Fiscal Studies last week to understand what learnings the Government might take. Will she tell us what those learnings are?
We will have a follow-up meeting on that over the summer recess. There are a number of learnings in relation to health and social care, the use of technology and our use of capital across Government. We had an introductory meeting of around 30 minutes. I would be more than happy to come back to the member with further detail in that regard, because I want to continue that dialogue with the IFS. It is hugely important that we listen to it and that we act accordingly, given the extent of the challenge that members across the chamber recognise exists in relation to our budget.
Pension Fund Assets (Affordable Housing Delivery)
I refer members to my entry in the members’ register of interests: I am an elected member on West Lothian Council.
That is a really interesting question. There are 11 local government pension schemes across Scotland, which are worth about £75 billion. For the past decade, they have consistently outperformed their United Kingdom peers. We should be doing more to explore how we can invest on a Scotland-to-Scotland basis and recycle that capital.
We will continue to work with West Lothian Council in pursuit of our manifesto commitment to deliver and progress funding models that safeguard the fiduciary duties and long-term investments of pension schemes and accelerate the delivery of social and affordable homes across Scotland. That will require an unprecedented level of commitment and investment. That work will not be done in isolation; it will involve the private and public sectors, and the Government and pension funds, working together. Collaboration is the name of the game. We need to think more creatively about how we can access pools of capital to build at scale the affordable housing that we need.
Given the acute demand for affordable housing in West Lothian, in particular, when can local authorities expect to see tangible developments resulting from that work?
As we set out in our manifesto for this parliamentary session, we will work in partnership and collaboration with others to progress funding models that safeguard pension schemes’ duties and provide secure, inflation-linked returns that accelerate the development of housing.
At the moment, it is challenging to provide a timeframe, but, through the affordable housing supply programme, we will invest up to £4.9 billion in affordable housing over the next four years, £4.1 billion of which will be public investment, including £75 million of investment in West Lothian.
In the interests of transparency, I declare that I am a member of Aberdeen City Council’s pensions committee.
When it comes to pension funds investing in local housing, how do we see the investment returns on such investments? How do those pension funds deal with their fiduciary duties and ensure that, first and foremost, they meet the needs of the pension holders?
As I mentioned, there needs to be a mix of private and public investment, with the Government and pension funds working together. Last night, I was at a dinner at which members of the Scottish National Investment Bank mentioned that the investment in six affordable houses in the Shetland Islands, which is my constituency, had provided the most stable return that the bank has in its portfolio.
It is a matter of ensuring that we bring the private and public sectors together and that we ensure stability of return for pension funds that are seeking such stability over multiple years at an interest rate that is good for their portfolio.
Hyperscale AI Data Centres (Planning Authority Guidance)
To ask the Scottish Government whether planning authorities have adequate guidance on how to assess proposed hyperscale artificial intelligence data centres. (S7O-00034)
Planning authorities have qualified planning officers who apply their professional analysis and judgment to inform decisions. I recognise the speed of the development of hyperscale AI data centres and their scale in a very new and evolving part of our society. They present risks, upsides and downsides that need to be considered.
The national planning hub has been working with planning authorities, infrastructure providers and industry stakeholders to share an understanding of those benefits and impacts. We will continue that work with diligence and thought over time. We will consider whether there is more formal guidance that would be beneficial to a planning authority locally. We will need to ensure that local authorities are appropriately supported in the assessment of the coming data centres.
This is a new and rapidly evolving situation. I hope that the minister recognises that, because there have been huge concerns raised about the proposed data centre at Auchtertool in Fife in relation to its size, its proximity to the village, the energy and water demand and the fact that Fife Council has not requested that an environmental impact assessment be conducted.
I hear what the minister says about time, but, given the lack of specific guidance and the inconsistencies that we are seeing across local planning authorities in Scotland, will she commit to urgently reviewing and updating planning guidance to ensure that the full impact of the AI data centres is considered? We are talking about a problem that exists now, not in the future. Planning authorities need to make proper decisions now.
AI data centres are a rapidly evolving sector. It would not be appropriate for the Scottish Government to comment on individual development proposals, because we want to ensure that we avoid any suggestion of favouritism.
The Scottish Government is clear that the voices of communities that are affected by such developments must be central in any considerations, and that planning authorities have a responsibility to consider the environmental impacts of all developments that require planning permission. We are also clear that any new AI infrastructure development should minimise reliance on fossil fuel solutions. Our AI strategy for Scotland is clear that data centre development should include steps to assess and mitigate potential risks presented by infrastructure, including in relation to environmental sustainability.
The Scottish Government’s AI strategy has a clear aim of promoting Scotland as a centre for green data centres, but it is less clear on what the terms mean in practice. It says that
“guidance on what factors are prevalent in a ‘green’ data centre”
is expected to be published in 2027. Would that include the necessity to have an environmental impact assessment? At the moment, my understanding is that there would be no such necessity.
Does the minister think that the timescale that we are working towards is still appropriate, given the number of projects that are already seeking planning permission in principle?
Claire Baker will appreciate that there are local planning decisions that I cannot comment on from a Government perspective. To be honest, the issue that she raises is a planning matter that is devolved to Fife Council, so I would put to her that it must be Fife Council that considers it.
I firmly believe that Scotland cannot be left behind in the new digital age. However, that should not come at a direct cost to the environment or local communities without those communities seeing substantial benefits.
Many parts of Fife have been hit badly by deindustrialisation, with generations of people struggling with unemployment and underemployment. Does the Scottish Government agree that, if those data centres go ahead, the sufficient creation of permanent full-time jobs, with upskilling opportunities for local workers, should form part of the conditions for granting planning permission for them?
Economic growth, job creation and benefit within communities that host infrastructure projects such as data centres have to be at the front and centre of the issue. In my portfolio, I am starting to explore the use of planning as a tool. I had a meeting with planning officials yesterday. I am still to get my head around exactly what can be done, but I am sympathetic to using planning as more of a tool to stimulate the kind of growth and benefits that Julie MacDougall has talked about. Given our devolved powers, planning is a tool that we could use to our advantage. I will take that on board as I continue my thoughts and questions. I do not yet have an answer, but the issue is on my agenda and in my mind.
Similarly to Mark Ruskell’s data centre in Fife, a 150-hectare data centre that would cover an area larger than 200 football pitches is proposed for the wilderness of the Lammermuir Hills, in the Borders. In the absence of a Scottish Government strategy for locating energy-intensive industries, communities are being left to fight ad-hoc developments that might have potentially irreversible environmental impacts. Does the minister agree that such industrial projects belong in industrial areas and not our pristine wilderness?
Again, I will not comment on specific planning applications that are going through councils. However, there is a difference between industrialisation and industry. Especially in areas of the Highlands and Islands, it is clear that industry can co-exist alongside communities, nature and built heritage. It is about making sure that we equip local authorities with resources and appropriate funding from our side to be able to handle that.
It would be inappropriate for me to comment on individual cases, but I am sympathetic to Duncan Dunlop’s point about the difference between industrialisation and industry, because a balance needs to be struck, especially in rural and island communities.
Better Surfaces Fund
I direct members to my entry in the register of members’ interests. I am a Highland councillor.
The Scottish Government will work in partnership with the Convention of Scottish Local Authorities to design a fund that provides flexibility and empowers individual local authorities to improve their road conditions and connectivity, based on their local needs and priorities. I undertook an introductory meeting with COSLA on 28 May, and I will meet the organisation again, as previously intimated, on Thursday 18 June, along with the Cabinet Secretary for Public Service Reform.
The Highland Council’s identified roads repair backlog is £233 million, yet only £22.5 million is being allocated to capital road improvements this year. Across Skye, Lochaber and the wider Highlands, residents and businesses are experiencing road deterioration at an alarming rate. Before the Deputy First Minister heads off on her summer holiday, will she join me on a road trip to Skye to see the reality for herself and explain why the better surfaces fund will be anything more than a drop of tar in an ever-growing pothole?
I have been to Skye many times and am more than happy to come again and visit Andrew Baxter’s roads. However, I put on record that the local road network is the responsibility of the Highland Council, which has had an uplift in funding from the Scottish Government. In 2026-27, it will receive £665.1 million to fund local services, which equates to an extra £32.3 million—5.1 per cent—compared with the previous financial year.
It is important to put on the record that the allocation of capital is a matter for the authority. However, the Government’s budget of last year delivers in full a number of asks from island authorities, including the one in the member’s constituency, to provide extra capital funding and resource for interisland connectivity, in recognition of the importance of rural roads in particular.
Dumbarton Health Centre (Funding)
To ask the Scottish Government, in light of the 2026 Scottish National Party manifesto commitment of £10 billion in capital spending on health, including community health and care hubs, when it will allocate funding to build a new Dumbarton health centre. (S7O-00036)
Ten billion pounds-worth of capital investment in health infrastructure is planned for the coming decade. Work is already underway to develop a standardised approach to the planning, design and delivery of projects that were announced as part of the infrastructure delivery pipeline in January 2026. The first tranche of projects is currently being progressed.
Dumbarton health centre is recognised as a priority in NHS Greater Glasgow and Clyde’s primary care estate. Decisions on the allocation and timing of funding for subsequent projects, including Dumbarton, will be taken as part of future phases of the infrastructure and investment programme.
I do, however, expect to receive further advice on the next stages from my officials during the coming weeks, and I will be happy to provide Jackie Baillie with further updates when they are available.
The former Cabinet Secretary for Health and Social Care visited Dumbarton health centre with me earlier this year and agreed that the Greater Glasgow and Clyde health board would consider it as an equal priority to a health centre in Port Glasgow.
Can the cabinet secretary tell me when there will actually be shovels in the ground, because a response to an earlier question suggested that it could be as late as five years from now?
I cannot give Ms Baillie a specific date at the current time, as I am awaiting advice on that from my officials, but I am more than happy to correspond with her on the challenge that she has put to me today.
However, I hope that she recognises that significant investment is being put in place to support projects such as the one that she has outlined. I am more than happy to write to her with further detail when I receive it.
High Streets (Businesses)
To ask the Scottish Government how it is supporting businesses on Scotland’s high streets. (S7O-00037)
High streets are vital to our economy and town centres, especially in rural and island contexts. The Scottish budget reduces all three property rates and offers a package of reliefs that are forecast to save ratepayers more than £870 million in the 2026-27 budget.
The small business bonus scheme remains the most generous scheme of its kind in the United Kingdom, and we estimate that 96 per cent of retail, hospitality and leisure businesses could benefit from some form of relief in 2026-27.
As I said, the engagement that I will have with business communities before summer is high on my agenda and I look forward to kicking it off. That engagement includes a high street focus.
My constituency is home to many small and medium-sized businesses that make a significant contribution to the local economy and provide a wide variety of specialist services and goods. However, local high streets such as ours have been blighted by the presence of vacant shops in recent years. How is the Scottish Government working with local authorities and other partners to support bringing vacant premises back into use and encouraging more footfall in our town centres?
Our package of non-domestic rates relief includes the small business bonus scheme, which remains the most generous of its kind in the UK. As was said earlier, fresh start is a relief to incentivise the reoccupation of non-domestic properties that have been empty long-term, including on many high streets across Scotland. The business growth accelerator relief offers relief on new builds and property improvements. Local authorities also have wide-ranging powers to create local rates relief schemes to reflect local needs. As elected members, we should encourage our local authorities to make full use of that.
I remind everyone that next week is the annual Scotland loves local week, so I urge everyone to get out to their local high street. Members should go out and meet and interact with shop owners and give some prominence, social media content and visibility to the many dedicated shops that we have on our high streets across Scotland.
Question 10 has been withdrawn.
Public Service Reform, Europe, External Affairs and Energy
The next portfolio is public service reform, Europe, external affairs and energy. If a member wishes to request a supplementary question, they should press their request-to-speak button during the relevant question. During the previous portfolio, I noticed that a number of members did not keep their request-to-speak button pressed down all the time during the question, and it was not clear whether they wanted to be chosen. If you want to speak, please make sure that you keep your request-to-speak button pressed down.
Low-carbon Heat Recovery Technologies (Rivers, Estuaries and Coastal Waters)
I refer members to my entry in the register of members’ interests, which shows that I am a councillor in Fife.
I thank Mr Barratt for his question and acknowledge the expertise that he brings to the chamber on the issue, which will enrich our discussions and debates. The Scottish Government aims to capitalise on the thermal energy that is found in a range of sources, so that it can be distributed to homes and businesses through heat networks at an affordable cost. We have developed detailed guidance with the United Kingdom Government to support all parties with that, and it will be published shortly.
Research suggests that there is a near limitless supply of heat available from our coastal waters. That is being explored by the FORTH20 sustainable heat project, which is a partnership between SeaWarm, the University of Edinburgh, the City of Edinburgh Council, East Lothian Council and Fife Council. It has been identified that the cost and complexities of consenting are adding almost a year to the project delivery timescales and up to 20 per cent to the cost of the innovative technology. Will the Scottish Government commit to reviewing the current fragmented consenting process for small-scale water source heat projects, where a single installation may require permissions from multiple authorities, despite supporting Scotland’s net zero and affordable heat objectives? Will the minister meet partners of the FORTH2O sustainable heat project to discuss the matter further?
I thank Mr Barratt for his question and for his engagement on the matter. The project is important as we transition to a net zero economy. It will become increasingly important that we use resources efficiently. That includes maximising the recovery of heat from various sources that currently goes unused.
If the member writes to me with the people he would like me to meet, I would be delighted to meet them, after which the Scottish Government can consider their findings.
Prison Estate (Staffing Pressures)
To ask the Scottish Government what action it is taking to address staffing pressures across the prison estate through its programme of public sector reform. (S7O-00040)
The prison estate is currently facing unprecedented pressures due to the record-high prison population, and our prison staff are working with dedication and resilience in challenging circumstances. The 2026-27 budget provides a £20.8 million resource funding uplift for the Scottish Prison Service, and the pay deal delivers an 8 per cent increase over two years. Recruitment is continuing at pace to deliver up to 500 new prison officers this year.
The public service reform strategy sets out a clear direction for modernising the workforce, with transformation at its core. It supports a shift in operating models, with a focus on efficiency, collaboration and protecting front-line workers, including in our prisons.
Given that staffing shortages can lead to reduced access to education, rehabilitation programmes and purposeful activity for those in custody, has the cabinet secretary considered the long-term effects of the issue, and will he outline what plans are in place to address those issues in the Prison Service and across the wider public sector?
I recognise that my colleague the Cabinet Secretary for Justice is working on those steps, but, as I have indicated, the Prison Service is significantly increasing staffing, with up to 500 new officers having joined this year and more than 800 new officers over the past two years, and that recruitment continues. We recognise the pressures from our record high prison population. That is why we are working with the Prison Service to take forward a number of actions in response to the issue, including expanding capacity, investing in community justice and reducing demand through alternatives to custody.
I thank the cabinet secretary for the detail that he has already given, but could he also outline what more can be done to use the public service reform agenda to encourage staff to move outside the central belt and into other regions and areas where they are needed, such as to the new HMP Inverness, which will require an increase in staff?
Public service reform gives us the tools to better match staff to where they are most needed, and the strategy includes commitments on strengthening leadership and on workforce reform to ensure that we have the right number of people in the right roles with the right incentives and empowerment to deliver change.
The forthcoming workforce management governance framework will include good-practice guidance on recruitment and redeployment. That means supporting staff to move into priority roles, including in areas such as the Highlands, where HMP Highland will replace HMP Inverness. That includes targeted local recruitment, outreach with partners and encouraging experienced staff to transfer, thereby ensuring both community benefit and a safe, resilient service.
Farmers and Producers (UK and EU Markets)
To ask the Scottish Government what assessment it has made of whether farmers and producers in Scotland are better served and protected within the single market of the United Kingdom rather than when operating in the European Union market. (S7O-00041)
Previously, of course, it was not an either/or. When we were in the European Union, our farmers were able to benefit from free access to an EU market of 450 million consumers, with funding stability provided by the common agricultural policy and much more.
Brexit, which the member’s party campaigned for and wanted, was a costly mistake, and our agri-food industry has suffered as a result. The United Kingdom Internal Market Act 2020, far from helping to ensure a functioning domestic market, is a recipe for confusion and uncertainty. We strongly support a closer relationship with the EU, including on agri-food, to help businesses to access the EU market in order to expand consumer choice and sustain Scotland’s agri-food sector. The best way to do that is, of course, with independence.
Does the minister recognise the serious challenges that the Scottish pig farming industry is currently facing as a result of the glut of Spanish pork imports depressing prices? Can he confirm what work the Scottish Government has undertaken with the UK Government to address those challenges?
I will write to the member more broadly on the specific issues, but I would set out the hit that consumers and businesses, including in agriculture, have taken from leaving the EU. That includes a Treasury hit of £90 billion less in tax revenues—that is £250 million being wasted every single day—and UK food exports to the EU at well below pre-Brexit levels. Brexit has been a disaster. It is the 10th anniversary of the referendum in a couple of weeks’ time, and I hope that the member’s party will reflect on that.
Energy Security
To ask the Scottish Government what assessment it has made of Scotland’s energy security, including any consequent action it plans to take in the light of heightened global tensions, particularly in the middle east and Ukraine. (S7O-00042)
The ongoing conflict in the middle east and Russia’s war in Ukraine have brought Scotland’s energy security into sharp focus. Our assessment remains that, on the information that is currently available to us, Scotland’s position in relation to energy security remains robust. However, despite that, as a responsible Government, we continue to monitor the current situation and prepare for any disruption. We are also continuing to pursue engagement with the United Kingdom Government to assess risks and share intelligence, to ensure that Scotland’s energy security remains resilient and to inform our planning.
I would like to help the minister in that regard. It is reported today that, if the largest undeveloped oil and gas field in the UK, Rosebank, is given the go-ahead, it will generate £8.5 billion-worth of direct investment, £6.6 billion of which will be spent on UK businesses; it will support 2,000 jobs during its development alone; and it will help our energy security. The Scottish National Party has maintained a presumption against new oil and gas for years, and it was confirmed again by the Scottish Government on Politico this week. However, for the sake of energy security, for thousands of Scottish jobs, for the environment and for the economy, will the minister join me in demanding that Ed Miliband give Rosebank the green light?
The issue is, as the member knows, reserved to the Westminster Parliament. However, I am glad that we are able to discuss reserved issues in this place as well.
The question of energy security is one of the tests that we apply, as well as the climate, when considering the options. However, I have to say that it takes something of a brass neck for the Conservatives to come to the chamber and lecture anybody about the oil and gas industry, given the thousands of jobs that were lost on their watch.
The minister will, no doubt, agree that our energy security must be considered alongside our climate obligations. That is why I urge the Scottish Government to recognise the advice of the Climate Change Committee, which says that nuclear is essential to the UK’s decarbonised electricity mix. I also urge the minister to recognise that decommissioning in Scotland, including at Dounreay, in my constituency, depends on retaining those skills in the long term. Will he therefore agree to visit Dounreay, meet our nuclear workforce and address the concern that his Government’s opposition to new nuclear sends them a message that their future lies elsewhere?
First, I would be delighted to visit the member in his constituency, for which he is obviously a champion.
Scotland is an energy exporter with excellence in renewables and other industries. Nuclear has been proven to be a very expensive technology. That being said, I will commit, as I said at the start, to engaging with members and will speak to them, as we can always learn something from one another.
Grangemouth provided aviation fuel and could have been used to develop sustainable aviation fuel for the future. Does the cabinet secretary share my concern that, by letting it close and now pandering to Putin by allowing the importation of aviation fuel, the UK Labour Government has actively chosen to weaken energy security in the UK and has lost opportunities to strengthen our domestic capabilities for the future?
Alan Brown is absolutely right to raise this issue. Labour committed itself, during the 2024 election campaign, to saving the Grangemouth refinery. Alan Brown and I agree that Scotland has a huge role to play in not only Scotland’s energy security but pan-European energy security, which Labour, along with its colleagues in Reform, has been turning its back on. Eighteen months ago, the UK Government committed to providing £200 million-worth of targeted support to Grangemouth, which has not been forthcoming. We will continue to pursue that.
On the question of sanctions, Alan Brown is absolutely right that we should have the maximum sanctions on Russia. I was deeply concerned by the UK Government’s recent action in that regard.
Is it not absolutely extraordinary that some people respond to a fossil fuel crisis that is sending prices spiralling through the roof by demanding that we double down and make ourselves even more dependent on fossil fuels and even more exposed to the next energy crisis that fossil fuels cause?
I am a great believer in the energy mix. As we make a just transition and invest in it, that will involve a huge range of skills. However, we are, as Mr Harvie knows, a massive exporter of renewables, and we can also be a massive exporter of renewables to the whole of Europe. Scotland has an awful lot to offer when it comes not just to our own energy security but to that of our whole continent.
Electrical Infrastructure (Orkney)
To ask the Scottish Government how it is supporting the installation of electrical infrastructure in Orkney. (S7O-00043)
Since my appointment as minister, I have undertaken introductory meetings across the energy sector. I am clear that the energy transition represents one of our greatest economic opportunities, and I know that the member champions it as well. I will continue to hold those meetings over the coming weeks and over the summer.
The Scottish Government has supported Orkney’s ambitions for decarbonisation and electrification, including by providing £5 million to support the development of a harbour facility for the assembly of offshore wind turbines at Scapa Flow.
I welcome the advances that the minister has made in his early days in the role. Earlier this year, the electricity cable serving North Ronaldsay, in Orkney, developed a fault that cannot be fixed. Scottish and Southern Electricity Networks has confirmed that a new cable will be needed. Given the impact on my constituents, I hope that the minister will agree that the new cable should be consented as quickly as possible. Will he also agree to ensuring that the fibre within the cable is now used to provide long-overdue digital connectivity and resilience to the residents of North Ronaldsay?
I thank the member for the genuine work that he has done on this matter for years on behalf of his constituents. He will not expect me to comment on consents, nor would Mr McKee, who is sitting next to me. Given Orkney’s vast potential—and the potential across the northern isles, as my colleague from Shetland, Hannah Mary Goodlad, will say—I would be very willing to engage with the member to ensure that Orkney, like elsewhere, is fulfilling its clear potential in renewables.
Orkney and other communities across the Highlands and Islands will play a key role in Scotland’s renewable energy future. However, new projects in the region are being unfairly disadvantaged by Westminster’s transmission charging regime, which is costing Scottish renewable projects £1 billion. Does the minister agree that, if Labour ministers are serious about growing renewable energy in Scotland, they must scrap those unfair transmission charges immediately or get out of the way and give Scotland the power to control our own energy?
I absolutely agree with Laura Mitchell, who has already been a strong advocate in this Parliament for jobs and investment in her constituency. We have seen unfair penalisation through the current transmission network use of system—TNUOS—charges. According to the figures that we saw at the weekend, transmission charges could cost Scottish projects almost £1 billion up to 2030-31, whereas projects in England and Wales will be paid £435 million to connect. That policy, which Labour must review, is holding back our sector, and Laura Mitchell is quite right to be a champion for her communities on that.
Aviation Fuel Supply
To ask the Scottish Government, in light of recent reports of aviation fuel supply issues at Edinburgh and Glasgow airports, what discussions it has had with the United Kingdom Government regarding future fuel security and the fuel supply chain. (S7O-00044)
The recent fuel supply issue that Glasgow and Edinburgh airports experienced was caused by a logistical issue. Although that has been swiftly rectified, I recognise the inconvenience that the disruption caused to passengers. We continually seek to engage with the UK Government regarding fuel security, as well as remaining in contact with key industry stakeholders. However, to be blunt, we need the UK Government to recognise Scotland’s potential and, sometimes, to be a bit more forthcoming on information sharing.
This issue underlines how precarious Scotland’s position on jet fuel supplies has become. Before its closure, Grangemouth refined jet fuel for the whole of Scotland, which gave us a measure of energy security. The betrayal of the workforce at Grangemouth and the false promises that were once made to them by Anas Sarwar have helped to put paid to that. Does the minister agree with Unite the Union, which has accused the UK Labour Government of “industrial vandalism” in allowing the Grangemouth refinery to close, when Scotland could have been producing its own green aviation fuel?
Martyn Day has for many years been a strong advocate for the people and industries in Grangemouth. Grangemouth is a prime location, and it has a highly skilled workforce for the development and production of sustainable aviation fuels. Scotland is part of the solution when it comes to our energy security.
I said that the UK Government had been less than forthcoming. For example, the First Minister had to write to the Prime Minister to ask for more detail and greater security co-operation in the areas in which we still, I am afraid, have to rely on the UK Government. This democratically elected Parliament has voted for those powers to be devolved, which I hope can provide part of the solution.
Grant Schemes
To ask the Scottish Government whether it plans to adopt a tell-us-once approach to grant schemes, such as fair work first, across its departments to reduce the burden on individuals, organisations and businesses, as part of its planned public sector reform. (S7O-00045)
Our public service reform strategy commits us to reviewing and simplifying reporting requirements for grant recipients. That will include understanding how a tell-us-once approach to grants could be implemented. Work is also under way to simplify the grant landscape across Government and agencies in order to increase clarity and impact and to reduce administration costs for Government and, indeed, grant recipients.
On the fair work first scheme, the Scottish Government has commissioned an independent evaluation, which will include compliance and operational processes and is due to report this summer. We will consider the recommendations, including any further improvements that could be made to administrative processes.
I welcome the Scottish Government’s commitment to fair work and fully support its underlying principles. However, smaller organisations, third sector bodies and social enterprises do not have the dedicated compliance or bid-writing teams to cover the administrative burden of different funding streams. Will the cabinet secretary therefore meet me and the Mull and Iona Community Trust to discuss what immediate, low-cost improvements could be made to the process, in line with the Scottish Government’s stated aims of efficiency, fairness and accessibility of grant funding?
I thank the member for the invitation. I am happy to meet her and representatives of the trust. It will be helpful to hear about their direct experiences to inform our improvements, which I am sure will very much chime with what I hear from community organisations in my constituency.
The Government recognises the importance of community organisations. Franky, we have a duty to make the administration processes for those organisations as straightforward as possible, subject to appropriate safeguards. That is a central part of the work in the PSR strategy.
On fair work first, I understand that my colleague Tom Arthur is responding to the member’s request to meet his officials to discuss the issue, and that meeting is being arranged.
Question 8 was not lodged.
Prestwick Airport (US Military Use)
To ask the Scottish Government what its position is on banning the use of Prestwick airport by the US military. (S7O-00047)
I am aware that Gillian Mackay has raised the issue previously. She will understand that the Scottish Government must comply with the terms of the Scotland Act 1998, which reserves national security, aviation and air transport, defence and foreign affairs to the United Kingdom Government.
The Scottish Government has no power to ban flights from Scottish airspace or airports. Non-UK military flights using UK airspace need permission from the Ministry of Defence.
Unfortunately, the Scottish Government is not provided with information on the purpose of military flights using Scottish airports, which is frustrating.
The US Government’s partner in this aggression is, of course, the Israeli Government, which has already been banned from using publicly owned Scottish infrastructure, including Prestwick airport. During the previous parliamentary session, the Parliament passed a motion calling for boycott, divestment and sanctions in relation to Israel. We later found out that the Government has not even started work on that proposal. When might we see that package of measures coming forward?
I thank the member for raising the issue, including with the First Minister, and for the attention that she has given it. I am a great believer in the international rules-based system, which is under threat and is being undermined. Although we do not have the full range of powers that we would like—that is frustrating—we must adhere to that.
I am perfectly willing to look at the matter in good faith, and I can write to the member. I wish that we had the full range of powers that we just do not have. That is a source of frustration to me as much as it will be a source of frustration to Gillian Mackay.
Public Procurement (Small Businesses, Social Enterprises and Local Supply Chains)
To ask the Scottish Government whether it will provide an update on its vision for public procurement, particularly in relation to supporting small businesses, social enterprises and local supply chains. (S7O-00048)
Sustainability is central to public procurement, which is driving jobs and growth and generating £14.7 billion in economic activity, of which £7.6 billion goes to small and medium-sized enterprises. Communities are benefiting: 78 per cent of suppliers winning public contracts were SMEs, of which 61 per cent were Scottish SMEs. The third sector is engaged and has secured £1.2 billion of spend. Local impact is being delivered, with £3.6 billion retained locally.
Scotland leads the way in that regard, because 47 per cent of procurement spend in Scotland goes to SMEs, which compares favourably with the position in the UK, where 20 per cent of spend goes to SMEs, according to a British Chambers of Commerce report. Reducing barriers remains a priority for the Government through the supplier development programme, with 25,000 contracts awarded to registered suppliers.
As the cabinet secretary highlighted, procurement offers great opportunities for small businesses and social enterprises, which, in turn, can boost local economies and wellbeing. South Lanarkshire Council, which is the host authority of the supplier development programme in my patch, works very hard to support that.
There is also a lot of potential to improve things, including in local supply-chain development. One example of that is the use of locally sourced venison, which is a healthy, low-carbon food source that could be better used in hospitals, schools and other public sector organisations. Will the cabinet secretary outline how subcontractors will be further encouraged to get involved in large public sector contracts, as well as in work to boost local supply chains, including those for food provision?
Absolutely. I am happy to confirm that legislation is in place that requires public bodies to consider opportunities to involve small and medium-sized enterprises, third sector organisations and supported businesses. For higher-value contracts, that includes splitting contracts into smaller opportunities to make them more accessible for smaller businesses. Public Contracts Scotland alerts suppliers to relevant contracts and allows main contractors to advertise subcontracting opportunities down through the supply chains. The flexibility that public bodies have to promote local sustainable produce is underpinned in the national good food nation plan.
Ms Stevenson gave the example of venison, and I am happy to confirm that we have provided funding to build capability in the venison sector to improve and establish new supply chains.
There is broad consensus in the chamber about the need to develop Scotland’s supply chains and to use public procurement to do so. However, especially in the Labour Party, we have felt that, in practice, there has been an overly cautious view, particularly in interpreting the Subsidy Control Act 2022. Will the cabinet secretary, in his new role, re-examine the Scottish Government’s interpretation of that? Will he look at how procurement processes and grant schemes can be redevised so that they do not fall foul of the 2022 act?
First, I point the member to the numbers that I have gone through. It is hugely important to recognise that Scotland is absolutely leading the way, with more than 47 per cent of our public sector procurement going to SMEs, compared with only 20 per cent across the rest of the United Kingdom. It is hugely important to recognise the progress that we have made. As I said, we are always keen to make more progress and to look for opportunities to further expand the amount of procurement opportunities for SMEs, third sector organisations, supported businesses and others in our communities.
We always need to look closely at subsidy control when we are taking decisions. This morning, I met procurement officials and talked about the work that they are undertaking with others across Government to understand where the restrictions apply and where we can take steps that do not fall foul of the regulations. We will continue to push the envelope as much as we can.
That concludes portfolio question time.
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