Chamber and committees

I will deal with some of the inflationary pressures and Ben Macpherson can pick up on the wider public sector finance situation and funding for pay increases.

There is no doubt that the increasing inflationary pressures that are being experienced by local authorities will have an impact. It is difficult to quantify exactly to what extent those pressures will have an impact, but the cost base for carrying out capital works has increased because of both material and labour cost increases. That will clearly put pressures on local authority budgets, as it will for the Scottish Government and other parts of the public sector. There is no doubt in my mind that inflationary pressures will have an impact, but it is difficult at this stage to quantify that impact.

It is also worth keeping it in mind that some of the pay challenges that local government has faced have resulted in additional funding being provided to local government to try to help to meet and offset some of the additional costs associated with the pay awards. That was as part of our on-going engagement with COSLA to try to help to resolve the pay disputes that were taking place. Ben Macpherson may want to say a bit more about local government financing.

Some of the progress that we wanted to make during last year was not possible. We are looking to do that as part of a whole range of other requirements. For example, more issues arose from ScotWind than had been originally expected, which meant that additional resources had to be deployed from Marine Scotland to deal with that. It is clear that highly protected marine areas will be one of the key aspects of protecting our marine environment, which has an important part to play in tackling climate change and biodiversity loss. I hope that the work that could not be taken forward last year can be taken forward in the coming year.

I want to come back to your point about the marine plan and to offer you some reassurance. When we were progressing our sectoral marine plan for offshore wind energy—that piece of work, which took place over a two-year period, predates my current ministerial role—there was extensive engagement with fishing communities and stakeholders. I hope that, given our track record in taking forward that plan, fishing communities can be reassured that we will look to undertake a similar level of engagement with them in the process.

As I said, the work that we had hoped and planned to take forward last year will be done in the coming year as we progress our work on highly protected marine areas.

Through a combination of the bill proposals and our waste route map consultation, which closed just last month, we have set out some of the measures that we look to take forward to tackle the issue that Ms Lennon has raised. Those look at how we can transition much more effectively to a circular economy, how to increase reuse and recycling rates and how to modernise and improve the way in which waste and recycling services are provided.

Our approach will be a combination of the route map, which we will take forward with local authorities to help to drive forward improvements in waste management and recycling, and the circular economy bill, through which we will look at putting in place statutory provisions on targets and approaches that should be taken to help to reduce waste and increase recycling rates.

There is a requirement on local authorities, as part of the procurement process, to consider how they can ensure that they are taking an approach that is in line with our net zero ambitions and the requirements on them to meet net zero. Can we try to do more? I see companies becoming increasingly mindful in recognising their carbon footprint or contribution to tackling climate change. Some of that is feeding through into the procurement process, in which they are highlighting that they can do things much more efficiently and effectively. However, procurement has an important part to play in helping to encourage more of that, and local authorities, particularly in relation to their contracts, have an important role in helping to ensure that that happens.

I am not sure whether we make specific requirements on procurement as part of the circular economy bill as it is proposed at the moment, but I am more than happy to check that.

We are looking at whether it would go beyond that time. Part of that would be into any financial settlement for the next financial year, which starts in April next year, which is why it goes up to March 2023.

I am not entirely sure where that stands with regard to the emergency budget review. However, what comes into ScotWind might well be way in excess of what the Crown Estate had been expecting and it might well be that the level that you have indicated is not necessary.

You raise an important issue, which is the need to make sure that we do more to help to educate people and ensure that the information is available. As you are aware, a variety of schemes presently operate. Home Energy Scotland is the main point of contact for impartial advice and information as it stands now. There is a single point of contact to get the information and advice that individual households may be looking for.

Of course, we are also taking forward the development of our national public energy agency, which will have a clear role in helping to support decarbonisation and energy efficiency work, in making sure that there is a much more consistent approach across the country, and in bringing together a range of stakeholders engaged in this process.

Home Energy Scotland is the main point of contact for independent advice, but I expect that, as we take forward the development of our public energy agency, it will have a clear role in helping to support households and giving advice and information, as well as helping to co-ordinate the development of heat decarbonisation across local authorities, public sector organisations and the private housing sector.

There is no set formula to say, “This is how you should do it and you should have a net zero forum or you have to have a local citizens assembly”. They all have a role to play. It is for individual local authorities to deploy those options in a way that they think will best reflect their local community. The challenge is how you reach out to engage people who might not necessarily engage in the normal processes that local authorities have, through community councils, area forums and so on. I can think of it based only on my constituency. There is a challenge in trying to get people to engage in some of the wider consultation exercises that the local authority undertakes.

The key thing that I often hear from constituents is that they feel at times that some of the engagement is tokenistic, that they are going through a process and there is a preconceived view on what the outcome will be and it does not matter what the community has to say about it or what their feedback is on what will happen. I do not think that is necessarily always the case, but there are times when communities feel that that is the case. That can make folk feel quite disengaged and disempowered and as though it is not a worthwhile exercise.

The key thing for local authorities is that, whatever engagement structure they put in place, there is clear cause and effect and they can demonstrate that to communities. If they say, “This is the issue that we are trying to address. These are options that we are considering. We are looking for your views and your feedback on those,” then they should be able to demonstrate how that feedback and engagement has had an impact on the decision that has been arrived at. That engagement in communicating with local communities is important to make people feel as though they have had a valuable input to the process and that it has had an impact on the outcome. That is about demonstrating how the process affected the final decision that has been made. It is a challenge that lots of local authorities face in trying to engage people and wider stakeholders in the process.

There are a number of things that sit alongside the new deal and those are the statutory requirements that local authorities have. They have gone from having had to “have regard to” tackling climate change to setting out plans on how they intend to achieve net zero and tackle climate change and now also setting out targets for when they expect to decarbonise particular local government responsibilities. There is a regulatory framework that clearly requires local authorities to set out the actions that they are taking and the date when they expect to achieve net zero in different areas of their responsibility. That combination of partnership through the new deal and the regulatory framework gives me confidence that it will ensure that net zero is a central part of the thinking.

In fairness—you may have heard this in your evidence—it is very clear to me from my discussions with colleagues in local government that net zero is a high priority for them. The way in which they go about it is different in different local authorities, for good reason very often, but I am confident that the regulatory framework can help to drive it forward.

I can take it away because it is set much more on the planning side as well. In NPF4 you will see a much clearer focus on helping to support leading on net zero objectives and the guidance that will be issued to local authorities for that. You have to be careful that asset transfer in local authorities is not simply a local authority getting rid of a problem facility on to the local community. I am clear that the local experience should be that local authorities transferring assets do so in good order and do not leave communities with difficulties in upgrading them to improve insulating, heating and so on. We have to think about how that would all fit in to make sure that we are making these buildings sustainable going forward.

On your wider point, I am more than happy for us to take that away to see whether we can get more details for you from a planning point of view, if that would be helpful.