Chamber and committees

You are absolutely right. The review will enable that to happen because it will provide the necessary resources to deal with the backlog, which should then enable the commission to look at some of the other issues that you have talked about, such as tackling derelict crofts, attracting more new entrants and implementing the crofting development plan.

We will continue to monitor the matter closely. I have regular engagement with the convener and the chief executive of the Crofting Commission to discuss on-going issues, look at the improvement plan and ensure that improvements are being made. The extra resource is so important because it will enable that work to take place.

I completely understand the points that you have raised. When I was in Shetland in the summer, I heard directly about the increased construction costs and various other issues that people face. The islands bond has never been seen as a blunt tool that will fix all those problems. I have been asked questions in the chamber about the islands bond, and it is just one strand of work that we are looking at to try and stem depopulation and support our populations in fragile communities. Many areas are involved in ensuring that we tackle the other issues that can lead to depopulation. The islands bond is one element that we feel can help to retain populations in fragile areas and repopulate depopulated areas.

As we have developed the bond, I have been keen to make sure that we undertake as much engagement as we possibly can so that, if we implement the measure, we do it right and in a way that will work. There have been a lot of misconceptions about what the bond will do and what it will look like, but that is why engagement is so important. Officials have undertaken extensive engagement so far, and that will continue. That has led us to propose the funding that we have in the budget this year. When you break it down, it looks like it may help only a specific number of households, but it is based on the engagement that we have had, and we are reflecting on the feedback that we have received. As you can imagine, there have been lots of different opinions on what it might look like and the different ways in which it might work.

It is really important that we listen, and that is exactly what we have tried to do. The funding will allow us to test some of the different approaches to the delivery of the island bond at a scale that will enable us to measure and understand the challenges and opportunities that are associated with the policy. The learning from that will allow us to develop a more effective and meaningful intervention for future years.

The commitment still remains with the funding for the islands bond, but the policy is being developed in that way purely based on the listening and learning that we have done along the way. That engagement will continue.

I will have to ask Caro Cowan for the specific information on that.

The extra investment that we have made for Marine Scotland has been vital because, since the UK left the EU, nearly 500 new obligations that relate to the marine environment, which were previously undertaken by the European Commission or by member states, have been transferred to the Scottish ministers; there are also 86 new powers. That means that we need to have more resource and to focus resource on managing all of that.

We also have ambitious targets when it comes to what we want to achieve in the marine environment. In the Bute house agreement with the Scottish Green Party, we have committed to establishing highly protected marine areas and to implementing management measures for our marine protected areas and our priority marine features. Given all the commitments that we have made on enhancing conservation and our marine environment, it is vital that we have the resource to put into supporting that work.

In an earlier response, I touched on the work that needs to be done on offshore renewables. Again, it is vital that we have in place the resource to enable us to support and deliver on all the commitments that we have set out and the transition that we need to make in some of those areas. That is what that £10 million will enable Marine Scotland to do.

Our initial commitment was to progress with three islands as part of the carbon-neutral islands project, but we have now extended that to six. We have developed internal and external working groups to consider the criteria that will inform the selection of islands that will be part of the project, and we are working across Government with existing policy and funding approaches to ensure that we are not duplicating work in other areas.

We have recently commissioned a mapping exercise, which will contribute to the knowledge of carbon accounting and emissions reductions on islands, ensuring that we avoid duplication when we begin the implementation phase of the project.

We aim to publish a report by summer this year, setting out the steps that we will take to support the six islands to move towards carbon neutrality. The £3 million that we have identified as part of the budget will support the implementation of that over the course of the coming financial year. As with the islands bonds, we want to engage and consult as we progress with the plans, because that will be critical as we proceed.

Again, we have made a commitment about the funding that we have and how that will be spent to give people in our agriculture sector some stability and security by letting them know that they can rely on those grants, which means that they know what their income will be over the next few years.

Obviously, a lot of the spend on agriculture funding across my portfolio previously came from the EU. There are still some legacy schemes that receive funding from the EU, but that will taper off, and all the funding that we get will come from the UK Government. However, as I have said in previous responses, we are not getting the full replacement funds that we were promised. On top of some of the issues that I identified, that means that we will face a £95 million shortfall in agriculture as well as the significant shortfall that we face year on year in relation to marine funding.

Equipment suppliers were just not able to supply equipment on time. People have been unable to get materials in construction, and we have seen the same issues in relation to agricultural equipment. It just has not been possible to get it. That is not a problem of governance or something that the farmers have not done; the equipment has just not been available for them to access. James Muldoon might have some further information on that point.

Those things are the subject of our discussions with the implementation board, which—as the committee will be aware—I co-chair with the NFU Scotland president, Martin Kennedy. Discussions are on-going as to exactly how the funding will be allocated and how we will progress the spend to implement what we have set out in part 1 of the national test programme, with regard to rolling out the carbon audits, the nutrient management plans and other elements that we will look to introduce over the years of the programme. Again, however, I note that that is all subject to the discussions that we are currently having.

I have already said that the money that we had identified for that has been ring fenced specifically for that purpose, and for looking at agricultural transformation. That is exactly what we are spending the money on.

I do not agree with your assertion that we are lagging behind the rest of the UK. Part of our process in developing future policy is the work that is being taken forward through the agricultural reform implementation and oversight board taking a co-development approach with the very people the policies will affect. That is why we have established the national test programme, which no doubt you will want to discuss later. It is important and vital that, in developing the future programmes for support, we are taking the approach of working with our stakeholders. That is also why we and the previous Cabinet Secretary for Rural Economy and Tourism committed to a period of stability and simplicity for the sector while we go through this period of transition. That has also been absolutely critical here.

You also asked about the further impact as we look at the resource spending review. The review and the medium-term financial strategy will build on last year’s five-year capital spending review. They will all come together to give a comprehensive picture of Scotland’s multiyear public spending plans. As the committee will be aware, the UK Government’s three-year spending review took place at the end of October last year, and it told us that, overall, the block grant is less than the current aggregate for 2021-22. That is why I said in my opening statement that this year’s budget has really been about those hard choices. The Cabinet Secretary for Finance and the Economy has also been really clear about that.

As I have already said, even though we face hard choices, the budget that we have produced for this portfolio supports our agriculture, fisheries, and rural populations right across Scotland to recover from the twin crises that we are facing, as well as helping them to start their journey towards future transformation.

At the moment, it is not possible for me to predict the outcome of the resource spending review process, because it is a Government-wide exercise and it is currently out for consultation. Again, I come back to what I stated about the Government’s priorities. The Cabinet Secretary for Finance and the Economy has outlined three key priority areas: to support progress towards meeting our child poverty targets, to address the climate change challenges that we face and to secure a stronger, fairer, greener economy. In order that we can do that, I have already committed to continuing with the pillar 1 direct payments and not lowering that basic payment scheme rate throughout the current parliamentary session. The pillar 2 payments include the reopening of the eighth round in 2022. We are further committed to developing future rounds up to and including 2024. I have already mentioned the national test programme.

We have worked hard towards the key priority areas that have been identified across the Government, and I feel that the budget that I have put forward and what I am proposing for the portfolio go a long way to achieving that.