Chamber and committees

The Vision for Sustainable Aquaculture is in the final stages of development in advance of publication and the contents will be available for all to consider when it is published. The Vision is intended to describe the long term ambitions that the Scottish Government has for aquaculture, with enhanced emphasis on environmental protection and community benefit. The Vision will be compatible with the planning policies on aquaculture contained in Scotland’s National Marine Plan and National Planning Framework 4.

The Scottish Government annually update and publish information relating to Private Finance Initiative (PFI) and Non-Profit Distributing (NPD) contracts which is available from the following link www.gov.scot/npd/pfi .

In addition, the Scottish Futures Trust (SFT) have published several guidance notes relating to the operational management of these contracts which are available from their website at the following link www.scottishfuturestrust.org.uk/operational-ppp

The Scottish Government also has a transparent approach to the delivery of infrastructure projects that reports on the progress of major projects every six months to Parliament. Our major projects reporting shows how projects progress from proposal to detailed design and costing to procurement and subsequent delivery. Our major projects reporting is published and available from the following link www.gov.scot/infrastructure/projects

The NPD model replaced the PFI model in 2010 and although not used for new projects since 2018, NPD improved documentation as unlike PFI, most commercial information in NPD contracts was published two years after the asset was completed rather than the twenty-five years that older PFI contracts envisaged. NPD standard contracts were also more flexible than PFI allowing public bodies to make small changes or use agreed contracted rates to price changes. Further information on NPD contracts is available from the SFT’s website at the following link www.scottishfuturestrust.org.uk/contracts

The only private finance approach currently available is the Mutual Investment Model (MIM), which will be restricted to deployment by the Scottish Government, its agencies and Non-Departmental Public Bodies. This route was identified by SFT in response to the request to identify a profit sharing, privately financed infrastructure investment route that could be added to the range of public sector funding and financing routes. SFT published the Options Appraisal on the use of MIM which is available from their website at the following link www.scottishfuturestrust.org.uk/mim .

The deployment of MIM is currently being explored by the Scottish Government.

Local authorities determine their own programmes for capital investment and are required by legislation to comply with The Prudential Code for Capital Finance in Local Authorities, which was developed by the Chartered Institute of Public Finance and Accountancy (CIPFA). The Prudential Code requires local authorities to ensure that all capital investment decisions are prudent, affordable and sustainable.

The Scottish Government have no plans to propose the use of private finance for any new local authority led infrastructure projects. As a government however, we are committed to ensuring that existing private finance contractual obligations are delivered and that contracts are affordable. That is why we have asked the Scottish Futures Trust (SFT) to work with public bodies to realise contract management improvements including re-scoping services, sharing in insurance cost savings, and optimising the risk transfer in contracts. SFT have published several guidance notes in relation to operational contract management which are available from their website at the following link www.scottishfuturestrust.org.uk/operational-ppp

As the first mission orientated investment bank in the UK, the Scottish National Investment Bank was established to respond to the need for long term ‘patient’ capital investment in Scotland. This means support for innovation and the creation of new markets where private investors are not yet ready to act.

The Missions, which were agreed across Parliament, are designed to steer the activity of the Bank into areas facing considerable challenge. The missions for the Bank are:

• Achieving a Just Transition to net zero carbon emissions by 2045
• Extending equality of opportunity through improving places by 2040
• Harnessing innovation to enable our people to flourish by 2040

As the Bank operates independently, how they set out their investment strategy in order to achieve these missions is a matter for the Bank to decide.

To highlight an individual investment as an example, in January 2022 the Bank invested £35 million into the expansion of Aberdeen Harbour. This expansion allowed greater land and water access for offshore wind developers. The increased capacity will also play a vital role delivering the supply chain benefits of the ScotWind leasing round, supporting the Bank’s mission to achieve a just transition to net zero.

The Animal and Plant Health Agency (APHA) carries out year-round avian influenza surveillance of dead wild birds on behalf of the Scottish Government to inform the disease risk for domestic poultry and captive birds.

Reports of dead wild birds are triaged and not all birds will be collected. The triage process allows the Scottish Government to understand the levels of risk to poultry, other captive birds and public health and what relevant mitigation measures may be adopted commensurate to the level of risk. It was not designed to help understand how the disease impacted wild bird populations from a conservation perspective.

The Scottish Government have consulted with NatureScot and they are not aware of any resource constraints affecting HPAI (Highly Pathogenic Avian Influenza) testing of dead wild birds in Moray. Since 16 November 2021, a total of 46 wild birds of nine species have tested positive for HPAI in Moray. Nearly all of these birds have been collected under APHA’s contract with UK Farmcare. NatureScot staff have only swabbed two birds in Moray, a pink-footed goose which was in a relatively inaccessible location and a cormorant, which NatureScot prioritised for testing and the test came back negative.

Wild bird surveillance is under review as part of the development of a Scottish HPAI wild bird response plan by NatureScot.

The Scottish National Investment Bank’s investment portfolio is funded directly by the Scottish Government through the use of Financial Transactions. Financial Transactions (FTs) are loans from HMT with interest and repayable over an agreed period. They must go ‘beyond the public sector boundary’ and are used for by a variety of Scottish Government portfolios, such as Higher Education, Enterprise bodies, Transport, Energy, Housing and Digital, etc. Due to the structure of these transactions, the Bank currently cannot lend to any aspect of the public sector.

There are no immediate plans to alter from the existing model operated by the Bank towards either investing into the public sector or issuing bonds.

Although guided by the missions set for it by Scottish Ministers, the Scottish National Investment Bank is operationally independent and makes investment decisions based on its own investment process and strategy.

On the specific matter of North Star, it is for North Star as a private commercial company to make its own decisions in respect to where it sources it vessels. The Scottish Government recognises the opportunity that requirements for offshore wind service vessels presents for Scottish industry going forward and will seek to work together to support this.

The Scottish Government annually update and publish information relating to Private Finance Initiative (PFI) and Non-Profit Distributing (NPD) contracts and their associated unitary charge payments. This information is collated from the relevant procuring public sector bodies including local authorities and published on the Scottish Government website at the following link www.gov.scot/npd/pfi

Although guided by its missions, which are set by Scottish Ministers, and the legislation within the Scottish National Investment Bank Act 2020, the Bank operates independently. So, any potential future investment roles or opportunities would be a matter for the Bank to decide.

Work is ongoing to develop our infrastructure improvement programme. As part of that improvement work we have been engaging across government and, at this stage, with the Scottish Futures Trust to understand some of the issues that have affected previous capital investment projects and how we can best take action to improve delivery, as part of our work to develop options for a national infrastructure company.

The Medium-Term Financial Strategy (MTFS) (most recently published in 2021) ( The Scottish Government's Medium Term Financial Strategy - gov.scot (www.gov.scot) ) sets out the range of funding available to the Scottish Government to invest in infrastructure, including revenue finance models. As part of the National Infrastructure Mission commitment, the Scottish Futures Trust (SFT) were commissioned to examine new privately financed profit-sharing schemes. SFT assessed different funding models (such as evolved Private Finance Initiatives, financial transactions and MIM variations) against their ability to deliver additional investment, value for money, affordability, investor interest and financial risk. More information on the analysis performed by SFT can be found here: sftoptionsappraisalreportlowres.pdf (scottishfuturestrust.org.uk) .

The Scottish Futures Trust also supports the Scottish Government in considering the range of sources of finance and their relative merits for different types of infrastructure investment– a summary of which can be found in Appendix 5, here:

NPF4_Draft_3.QXP_Layout 1 (scottishfuturestrust.org.uk)