Chamber and committees

I do not know whether you caught any of the first bit of my response, but biodiversity cuts strongly across my portfolio and that of the Cabinet Secretary for Transport, Net Zero and Just Transition. If you are looking to discuss specific funding and where the budget lines might be, I would refer you to a key budget line that we have touched on already—natural resources. In the agriculture element of my portfolio, around £30 million has been made available for our agri-environment work, and a large part of that is the agri-environment climate scheme, which relates to climate mitigation, adaptation and lowering emissions, as well as enhancing biodiversity. That is just one example.

Specific funds in the marine directorate contribute to enhancing biodiversity. Trying to tackle the climate and nature crises that we face is a key element of our blue economy vision, and in that respect, I would highlight the £14 million for the marine fund Scotland to support fisheries, seafood and aquaculture projects that will deliver on that vision. Specific projects with a focus on biodiversity can be funded within that.

We also have funding for particular species. For example, there is the wild salmon strategy, for which we have introduced an implementation plan, and we have provided about £1.5 million of funding to work through and support that.

No doubt the Cabinet Secretary for Transport, Net Zero and Just Transition will say more about the nature restoration fund, but it has been critical to all that work, too. There are particular budget lines within my portfolio, but I would note that the funding for the wild salmon work has been enhanced by that fund, which involves planting further upstream. Farming and agriculture schemes have been funded through the nature restoration fund, too, but the net zero cabinet secretary might be able to set out more detail on that.

There is no doubt that the significant reduction in the forestry grant scheme in particular will have an impact, not least on our meeting our targets, as I set out at the Rural Affairs and Islands Committee last week and in my opening statement to this committee this morning. The funding that we have available for AECS runs on five-yearly contracts, and in that respect, between £16 million and £17 million of the funding is for previous contracts that have already been agreed. That said, AECS is probably one of our key schemes for delivering on our climate and nature ambitions, particularly in relation to agriculture, and the money that we have made available for the scheme will enable us to fund the vast majority of applications to the scheme during 2023.

However, there is no getting round the cuts to the capital budget, and given those cuts, I am not particularly happy as I sit in front of the committee today. At the start of the meeting, Ms McAllan set out the context of the overall budget and the situation that we are facing, and no doubt you heard the same from the Deputy First Minister last week, too. About two thirds of the funding in my portfolio is ring fenced. When we were members of the European Union, we had certainty of funding for a seven-year period. That funding was a mix of resource and capital, whereas the replacement funding that we get from the UK Government comes through only as resource, and it is therefore the capital element of the budget where we are facing significant constraints.

We are trying to manage that as best we can across the portfolio. We are focusing on and prioritising the key schemes that we know will make a difference, as well as ensuring that we maintain and build on momentum in relation to forestry and peatland. We are trying to do the best that we can within the budgets that we have available.

I completely understand the concerns that stakeholders have expressed. We were disappointed with the overall planting rate for last year, which fell far short of our expected targets. I held the woodland creation summit last December to try to get to grips with what the key issues were that had led to the situation, to consider how we could address them and to examine how we could scale up planting to get closer to meeting some of the targets.

Notwithstanding the issue with planting rates, and the budget pressures that we are currently facing, particularly in relation to woodland grants—as you have highlighted, that overall budget is down by 40 per cent—the summit was vital in helping us identify the challenges. It gave us a lot to build on and highlighted a lot of work that we could do. Undoubtedly, though, the situation means that we would be unable to meet our planting targets for the current year.

It is really important that, from now on, we ensure that we can still plant trees and get as many in the ground as possible. At the time of the summit, we had a record number of approvals in the pipeline—it was more than 13,000 hectares-worth at that point; I think that the figure is closer to 14,000 hectares now. We want to ensure that we are fully utilising the budget that is available during the current financial year. We need to do that for next year’s budget, too, and I know that there have been discussions with partners in the sector on how we can best utilise that and keep the momentum going as best as we possibly can.

Overall, within that context, we should not lose sight of the fact that we are still doing a huge amount of planting. In Scotland, we are planting 62 per cent of the total figure for the UK. Therefore, although there is no getting away from the impact of the budget, it is important that we do not forget the real progress that we have made when it comes to developing the industries and the sector and increasing the rates of planting.

I am sorry—I can hear you, but I was not able to come off mute.

You have raised a really important point. I would, largely, echo what Ms McAllan has said, but I want to touch on a couple of pilot projects that are under way at the moment, which are key to ensuring that we get that investment right. We have talked many times before about how the level of public investment that we can make will never be enough to address the challenges that we are facing. Therefore, private investment will be critical. It is necessary to ensure that that is done in a responsible way and that communities see the benefit. That is really important.

There are a couple of pilots under way with NatureScot at the moment. One of those is a £2 billion private investment project that is centrally focused on the principles for responsible private investment that Ms McAllan talked about, and which she was responsible for bringing forward and implementing in her previous ministerial role. Our ensuring that we get that investment right from the start—that there is engagement with communities and that they see the benefit of it—is very much part of that process. I would be happy to follow that up with the committee and to provide more information on how the pilot is going, but I believe that it is operating quite well, at the moment.

There is also £3 million available at the moment as part of the pilot fund for the facility for investment ready nature in Scotland. Nearly 30 projects are under way as part of that and, again, the principles that I mentioned are very much at the forefront in order to make sure that we get the private investment right.

You are absolutely right in relation to where we want to be with land reform and what, ultimately, we want to see, which we are setting out in the goals. I am keen that any sort of investment aligns with our ultimate goals and visions, and with what we are trying to achieve.

Thank you—

Of course it will. As I highlighted in my previous response, it is a very busy directorate and a lot of work is always being undertaken, so we have to prioritise where the focus of that work needs to be. I talked earlier about the blue economy vision, embedding the outcomes that we want to see from that and that being a focus for our work.

When I was at the Rural Affairs and Islands Committee last week, I spoke about the science and innovation strategy, which is guiding how we prioritise our work in that area and where the key areas of focus will be. Obviously, we cannot undertake all the scientific research that we would ideally like to, because we have limited resource. We have two research vessels. Our overall spend on science is more than £20 million, and about £10.5 million of that is in relation to fisheries. The cost of the two research vessels is included in that, which equates to around £6.5 million of funding.

The science and innovation strategy is important, because it talks about how we can best utilise the academic and scientific research expertise that we have in Scotland, map the on-going work, improve how we co-ordinate and collaborate with different partners in Scotland, as well as internationally, and see where we can maximise the benefit of our work. We launched our science and innovation strategy in Aberdeen a couple of weeks ago, which is key in focusing scientific research and how we move that forward.

Scotland has a vast sea area, so enforcement and compliance in relation to our marine protected area network is of critical importance. We have 18 area offices, two surveillance aircraft, three marine protection vessels and two rigid inflatable boats, all of which must be funded. The total cost of that is around £30 million. It is a huge area to cover. I talked about the operational efficiencies that the marine directorate has been looking at, which are about trying to best focus and utilise our resources. In relation to enforcement and compliance, that has meant a greater focus on using intelligence and doing risk-based analysis before deploying vessels and aircraft.

The marine directorate’s way of working is being considered across the piece, which is how those savings have been identified, and it is also looking to maximise its income streams.

I thank the committee for inviting me to give evidence today. My colleague the Cabinet Secretary for Transport, Net Zero and Just Transition has just mentioned the difficult financial backdrop that we face in relation to this budget. Against that backdrop, the decisions that we have taken are driven by our values, and they prioritise the three missions that we have.

In my portfolio, the impact of Brexit continues to harm Scotland’s rural and island businesses and communities, and it also creates new challenges every year for us to respond to. However, the budgets that have been allocated to my portfolio will continue to make a vital difference to our rural, coastal and island economies. As I did for the previous financial year, this year I have prioritised the vital direct cash injection of £600 million that my portfolio makes into the economy for rural, agriculture, marine and island communities.

We are now providing the most generous package of direct support for farmers and crofters anywhere in the United Kingdom, and we are committed to getting that money to people and businesses as early as we can every year to help them to meet the on-going inflationary and cost of living pressures.

As the committee will be aware, my portfolio has expanded to include responsibility for peatland, land reform and land use, and forestry and woodlands, and I have committed to maintaining our record world-leading investment in peatland. Investment in new woodland creation—planting—will continue to contribute to our climate change targets and net zero ambitions. As I said when I recently attended the Rural Affairs and Islands Committee, we have set very ambitious planting targets, and the level of funding that we can provide within the budget means that it will be extremely difficult to meet those. However, we will continue to build on the positive work that we have already done, and the planting levels that are achievable within this budget will continue to exceed those in other areas of the UK.

I have also committed to delivering agri-environment investment, including the agricultural transformation fund, which is part of an overall budget of £30 million. We also have the Scottish land fund, which will continue to support many community groups to acquire assets that will make a difference to them in tackling challenges in their communities.

By maintaining the £14 million budget for the marine fund Scotland, we are continuing to acknowledge the vital role that our seas play in supporting activity to improve and restore the marine environment, as well as supporting the wider economy in coastal communities through fishing and aquaculture.

I think that I speak for all my Cabinet colleagues when I say that this Government is committed to doing all that we can, with all that we have, to support our priorities in rural industries and sectors, through this portfolio and others.

Thank you for highlighting that. We have ambitious targets for peatland restoration. We have £26.9 million available for the coming financial year. That figure was published in the 2024-25 budget. That is a 1 per cent increase on the budget that was available last year, and it means that we should be able to plant at roughly the same level.

The approvals that are coming through for the financial year 2023-24 are for almost 10,000 hectares of planting, which I believe will ensure that we utilise the available budget.

That has been the focus. There have been some issues with peatland restoration because the industry is in its infancy. There is limited availability of contractors and restoration can take place only at a certain time of year, so trying to overcome those challenges and build up the skills pipeline has been a key focus.

We fund peatland restoration through the peatland action programme, which funds five bodies to take part in that work, but that is not the only funding that is available. There has been a big focus on skills to ensure that we enable the industry to grow to meet the challenges and to provide the scale of restoration that we will need.

Simon Fuller might want to come in to clarify the points that I have made, but I believe that, with the budget that we set out last year, the scale of restoration that we expect to see and the approvals that we have in the pipeline, the available budget for peatland restoration will be utilised. Simon might be able to provide further clarification.

I am sorry—I was not able to unmute myself. Biodiversity obviously cuts across my and the Cabinet Secretary for Transport, Net Zero and Just Transition’s portfolios quite strongly. We have outlined in previous responses the natural resources element of the budget and the specific areas that that funds.

There are probably a number of budget lines in my portfolio where we are taking action on biodiversity, not least in relation to agriculture.