Meeting of the Parliament (Virtual)

Meeting date: Thursday, February 4, 2021

Official Report 1031KB pdf

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Infrastructure Investment Plan and Capital Spending Review 2021-22 to 2025-26

The next item of business is a statement by Michael Matheson on the infrastructure investment plan and capital spending review 2021-22 to 2025-26. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions.

14:14  

Today, I am publishing our infrastructure investment plan for the next five years, “A National Mission with Local Impact: Infrastructure Investment Plan for Scotland 2021-22 to 2025-26”, which sets out a long-term vision of infrastructure that supports an inclusive net zero carbon economy in Scotland. It has been prepared and published alongside the capital spending review, “Investing for Jobs: Capital Spending Review 2021-22 to 2025-26”, which has been led by the Cabinet Secretary for Finance.

It is the first time that a new infrastructure investment plan has coincided with a multiyear capital funding settlement, which will strengthen the strategic coherence and provide assurance that our capital investment programme is fully costed and affordable. Together, they deliver our national infrastructure mission commitment. That means that there will be more than £33 billion of Scottish Government investment over the course of the next parliamentary session, which will support more than 45,000 jobs and will be a fundamental element of our recovery from the economic harms that have been caused by the Covid-19 pandemic.

We are living through a time of huge uncertainty, and the economic outlook is very challenging. Such challenges require clear leadership and a vision for the future that provides stability and hope to businesses, communities and public services. The infrastructure investment plan, our new multiyear capital plans and the investments that they will support aim to provide that clarity. Through the plans, we want to boost market, business and supply chain confidence in sectors across the Scottish economy, and encourage the necessary private sector investment. The plans also give public bodies certainty and the opportunity to do medium-term planning.

Last September, I stood in the chamber to launch the first-ever consultation on our approach to infrastructure investment. We sought views on a number of key aspects, including our definition of infrastructure, the priority that we place on maintaining existing assets and how best to assess the full range of outcomes that infrastructure can deliver. I was delighted that we received almost 150 responses. I thank everyone who took the time to respond, and I welcome the positive feedback that we received during the consultation exercise.

Many respondents highlighted the complexities that we face, and I particularly welcome the overwhelming support for our proposal to have the widest definition of infrastructure in the United Kingdom—and in many other parts of the world—by including natural infrastructure.

With broad support across all the proposals on which we consulted, I am pleased to now deliver a final infrastructure investment plan that is focused on delivering good outcomes for Scotland. In particular, it focuses on the transition to a net zero emissions economy, driving inclusive economic growth and building resilient and sustainable places.

The plan is based on a new investment hierarchy approach, as recommended by the independent Infrastructure Commission for Scotland. The framework will enable us to realise the economic benefits of prioritising the maintenance of existing assets over the creation of new assets where it is appropriate to do so, while ensuring that we are reflective of local infrastructure needs. To complement that approach, the capital spending review will target a material uplift in capital maintenance investment and work towards doubling such annual investment over the next five years. That includes maintenance of the health estate, in which there will be £1 billion of investment.

This time last year, the Infrastructure Commission for Scotland made recommendations on the right future infrastructure priorities for an inclusive net zero carbon economy in Scotland. In the light of Covid-19 and the UK’s departure from the European Union, the commission’s approach is even more needed than before. We want to build a Scotland that harnesses opportunity and is resilient to future challenges by driving innovation, creating good and green jobs, and supporting wellbeing.

We must recognise the role that our infrastructure investment will have in ending Scotland’s contribution to climate change. When we updated the climate change plan in December, we highlighted the transformative action that was needed across all sectors of the economy and across society. Our investment in publicly funded infrastructure has a critical role to play in supporting the transition. The infrastructure investment plan confirms that £2 billion of additional low-carbon investment is to be made over the course of the next session of Parliament, including £120 million to support the transition to zero emission buses, which we expect to lever in up to £1 billion of private sector investment.

Those infrastructure investments are supported by our £100 million green jobs fund and our new green jobs workforce academy. The plan includes nearly £1.6 billion to transform how we heat our homes and buildings, as detailed in our forthcoming draft heat in buildings strategy, which we estimate will support up to 24,000 jobs in Scotland.

In laying the groundwork for an inclusive, greener transport network, details of the transport investment priorities for the next few years were published yesterday in phase 1 of the on-going second strategic transport projects review. The infrastructure investment plan supports those priorities by providing more than £550 million to support active travel, including £50 million on active freeways and more than £0.5 billion to progress the decarbonisation of our railways. In addition, the 26th conference of the parties—COP26—summit later this year will provide us with an opportunity to make sure that we inspire action across Scotland and globally in helping to support a green recovery to achieve net zero, as demonstrated by the approach that Scotland is taking with its world-leading role in developing low-carbon technologies.

Reducing emissions to net zero is key, but we are also preparing for the climate change that is already locked in. With more extreme weather events and rising sea levels expected, as a nation we must adapt to those changes. Ensuring that our homes, businesses, transport and health services and essential utilities are resilient to the risks that are caused by a changing climate, especially flooding, is crucial. The draft plan set out a package of measures to support climate adaptation and enhance our resilience, including £150 million of additional funding for flood risk management and £12 million for coastal change adaptation to help us to adapt to the threat of sea level rises and to protect our assets. Today, I can announce that we will make £60 million available to support climate change adaptation and resilience in our trunk road network.

This year has brought unprecedented change to our daily lives. As we consider our path to recovery, we must not simply go back to how things were done previously. We must ensure that our investment plans provide the best possible foundation for our economic recovery. We know that we must invest in digital connectivity and digital inclusion to help businesses, workers and service users accelerate the uptake of digital services. In recognition of that, today I can announce £110 million of new investment in a digital public services programme to support the transformation of key public services.

In summary, the plan now details more than £26 billion of projects and programmes. Since September, new investments have been included across the three themes of the plan, including £480 million for housing, £110 million for digital, almost £500 million for transport and the dedication of £400 million to tackling climate change through the low carbon fund, thereby completing our commitment to invest an additional £2 billion over the next five years.

Infrastructure investment touches all our lives and can provide huge opportunities for Scotland’s people. The publication of the infrastructure investment plan and the capital spending review sends out a clear message that the Government will do all that it can, working with partners, to secure our recovery from Covid-19, harness new opportunities and deliver a positive future for the whole of Scotland. It is on that basis that I commend the plan to Parliament.

I intend to allow 20 minutes for questions. I remind members that, if they want to ask a question, they should please type R in the chat function.

I thank the cabinet secretary for advance sight of his statement. We welcome the publication of the plan. Although it is good to see the broadening of what we mean by infrastructure and the doubling of investment in bridge and roads maintenance, we are still in the middle of a global pandemic and people across Scotland are worried about the impact that that is having on jobs and their communities. The capital spending does not feel adequate or ambitious enough to rebound and rebuild Scotland’s economy from the deepest recession on record. This Government is tired and out of transformative ideas.

The Government’s track record on delivering major infrastructure projects has been woeful, with unopened hospitals, overdue and overbudget ferries and a supposed state-of-the-art bridge that keeps being closed due to problems with ice. Increased infrastructure investment is vital—we welcome that—but its delivery is vital, too. The cabinet secretary needs to say how he will ensure that there will not be a repeat of previous fiascos with the pledges that are mentioned in the plan.

Yesterday saw the publication of the strategic transport projects review 2 update. The document mentions a roll-out of “active freeways”. I guess that those will be similar to London’s cycling superhighways. However, I see no clear plan for delivery. Where will they be? When will they be delivered? What will the cost be and who will fund it?

On the interesting sounding

“Glasgow ‘Metro’ and Edinburgh Mass Transit strategies”,

can the cabinet secretary tell us what people in the hinterlands of both cities will see that will be different from what is there now?

Finally, it would be remiss of me not to ask about improvements to the East Kilbride to Glasgow line. People want to know when the track will be dualled and electrified. What is the answer to that?

That was a long set of questions, Mr Simpson.

I will try to deal with some of the issues as quickly as possible.

Mr Simpson will recognise that the Scottish Government has a strong track record of investing in infrastructure across Scotland, from the Borders up to the Highlands and throughout the central belt. Whether that be investing in new hospitals, schools, roads or digital infrastructure, this Government’s record of investing in infrastructure is second to none, demonstrating a level of ambition that goes way beyond anything that we have ever seen from a Conservative Government at Westminster.

The member says that the plan is not ambitious enough. I suspect that that is a reflection of our priority being to ensure that infrastructure investment is prioritised on the basis of local needs and helping to achieve our net zero ambitions. Some of our planned investment has been compromised because Mr Simpson’s colleagues at Westminster have cut our capital budget by more than 5 per cent. Consequently, the level of investment that could be going into infrastructure has been cut.

On the member’s questions about STPR2 and the publication of the phase 1 report yesterday, he might want to pay closer attention to the report. If he does that, he will see that active travel highways will be developed in partnership with local communities in order to connect our towns and cities.

In relation to the Glasgow metro proposal, the member might want to refer to the work of the connectivity commission, which was published just over a year ago by Glasgow City Council and which demonstrates that that proposal goes way beyond the boundaries of that council; it is about making improvements in transport connectivity across greater Glasgow and into other areas such as Lanarkshire.

On Mr Simpson’s point about the electrification and dualling of the East Kilbride rail line, he should play closer attention to the work that is being done in his region, as that work has already started. The electrification programme for the East Kilbride line and the process for advancing it started back in July last year, and the programme continues to roll forward.

I thank the cabinet secretary for advance sight of his statement. At a time when increasing investment in our infrastructure will be more important than ever if we are to recover from the pandemic, drag Scotland out of the deepest recession on record and deliver a just transition to a green economy, it is disappointing to see that, in the year ahead, cuts are planned to capital spending in crucial areas such as rail and local government, and that so few projects appear to be shovel ready, which would otherwise help us to kick-start the economy.

When it comes to delivering major infrastructure projects on time and in budget, we know that the Scottish Government’s track record has been woeful. Three quarters of the projects in the existing infrastructure plan, which was agreed in 2015, have suffered delays equivalent to 64 years. On nearly half of them costs rose, thereby costing the taxpayer an extra £1 billion.

What specific lessons has the cabinet secretary learned since the previous plan, and what measures has he put in place to ensure that, when it comes to rolling out the projects in the new plan, we will not have a repeat of the ferries fiasco, the sick kids hospital scandal and the superslow roll-out of superfast broadband?

This is an ambitious plan to ensure that we can deliver economic growth and support social development and community resilience, and at the same time meet our net zero ambitions.

The member will recognise that our capital investment programme in rail in Scotland is at record levels, which demonstrates our ambition to expand and decarbonise our rail network right across the country. Its proposals reach into every part of the country, including those that were highlighted just yesterday in the course of the publication of the report on phase 1 of STPR2, which will also see the decarbonisation of the Borders railway line in the years ahead.

When major infrastructure investment projects are taken forward, challenges can be encountered for a variety of reasons—whether they be due to challenges relating to the project itself, such as weather issues or problems caused by ground conditions, or other complications that can come about through contractors going into administration—all of which can have an impact on them. However, I assure the member that we always consider the lessons that can be learned from such projects.

I am sure that the member will recognise the very strong report on our delivery of the Queensferry crossing, which is to date the biggest infrastructure project that has been delivered in Scotland. It came in under budget and was highlighted as a good example of the delivery of such a project. He can be assured that we always look to learn from those projects and take any lessons from them into account in future projects.

I repeat my usual mantra: 12 members want to ask questions and we have just over 12 minutes in hand. If we could have shorter questions, please, we will be able to get everyone in; I make the same plea in relation to answers.

Will the cabinet secretary provide an update on the Scottish Government’s latest engagement with the United Kingdom Government on its union connectivity review, bearing in mind that transport infrastructure is a devolved matter? It rather looks as though the review represents another power grab by the Tory UK Government.

Stuart McMillan is correct that the union connectivity review was nothing more than a power grab on the part of the UK Government and a means by which it was seeking to undermine the devolved settlement in areas of devolved competence, such as transport, not just here in Scotland but in Wales and Northern Ireland. The UK Government received a response from all three ministers responsible for those areas of policy across the Welsh, Northern Irish and Scottish Governments opposing the approach that it was taking to the issue.

I am always open to working with the UK Government on cross-border issues and where there is a mutual interest and a mutual benefit for us to work together, and we have a track record in doing so. However, priorities for transport investment in Scotland will be made through the SPTR2 process, just as we have set out in the phase 1 report yesterday and in the phase 2 report, which we will publish later this year.

We will continue to make the very significant level of investment that we are putting in right across the country to ensure that we have the type of transport infrastructure that is necessary for the years ahead.

Last year, seven of the 10 bridges that collapsed in the UK were in Aberdeenshire, which is still unable to fund a £5 million maintenance programme, due to continued cuts to council budgets by the Scottish National Party Government.

The minister recognised that there is a massive backlog in capital maintenance, all of which has accrued under 14 years of SNP management, but he fails to recognise that his responsibility to Scotland goes beyond trunk roads. Will he continue to put the blame on underfunded councils and watch our roads and bridges fall apart?

It is always a bit rich listening to a Conservative member of the Scottish Parliament talking about the Scottish Government underfunding local government when we have had over a decade of austerity imposed upon Scotland by repeated Conservative Governments at Westminster.

The member will also recognise that local roads are the responsibility of the local authority and it is for the local authority to take forward any maintenance or replacement programme that is necessary. He may also want to reflect on the fact that Scotland’s capital budget, which would help to support not just the Scottish Government but local authorities to invest in such capital projects, has been cut—by his counterparts at Westminster—by over 5 per cent. The direct consequence of that is that there is less capital funding available to both the Scottish Government and his colleagues in local government.

If the member is genuinely interested in making sure that local authorities have the capital funding that is necessary to invest in local infrastructure, he may want to start having a word with some of his colleagues at Westminster to tell them to stop cutting our capital budget.

Cabinet secretary, how will Dumfries and Galloway benefit from the Scottish Government’s infrastructure investment plan?

Dumfries and Galloway will benefit in a number of ways, including through the Borderlands inclusive growth deal, which will see the Scottish Government investing some £85 million. I hope to be able to sign off the finalised deal with the Borderlands councils very soon. Alongside that, as part of the £26 billion of investment that has already been agreed for major projects within the investment plan, both phase 1 and phase 2 of the £2 billion learning estate investment programme include works at Dumfries high school. I have no doubt that that will benefit pupils and the community as a whole.

The member can be assured that we will continue to look at other possible investment opportunities in Dumfries and Galloway. For example, we are considering a proposal that would involve the redevelopment of the Stranraer marina and we are also looking at possible investments such as a business park facility at Chapelcross. Those are all investments that I have no doubt will benefit the whole of the Dumfries and Galloway community.

The commission recommended the inclusion of natural infrastructure in the plan. Scottish Environment LINK calls for—[Inaudible.]

“Strong government support for ... Scotland’s Nature Network ... central to a green recovery ... creating a positive change to the economic and social activities of our communities.”

What reassurance can the cabinet secretary give today after really quite slow progress in those areas in the past?

Cabinet secretary, did you catch all that?

I might have lost part of the question because Claudia Beamish’s screen froze at one point.

However, the member will be aware that we included natural infrastructure in our definition of infrastructure as part of this infrastructure investment plan. That will ensure that we can direct capital investment into areas of natural infrastructure. We have set out a range of plans to consider investing in areas such as forestry and peatland restoration at record levels. Those are all key parts of our natural infrastructure that will play an important part in helping us to achieve our net zero target.

For safety reasons the construction of new roundabouts and a flyover at the junctions of the A737 and B777 and the A737 and B706 has been a priority for the communities of Beith, Gateside and the Garnoch Valley for years.

Consultation has taken place and exhibitions have been held, with Transport Scotland to confirm that made orders were laid on 9 December with no challenge to them since. Will construction of that long-awaited project begin on site during financial year 2021-22?

Following the successful resolution of objections that were received, the orders for the scheme became operative on 9 December 2020. That was a significant milestone in completing the statutory process in relation to the site that Mr Gibson referred to.

Based on the allocation that we have received in the course of the budget process for the forthcoming financial year, I confirm that progress will now be made in moving to the procurement phase for construction of that particular scheme. I expect to see good progress being made with that in the months ahead.

I thank the cabinet secretary for early sight of his statement and welcome the £12 million for coastal change adaptation to deal with the threat of sea level rises and the £60 million to support climate adaptation and resilience in the trunk road network.

The cabinet secretary will be aware that the majority of roads under threat from sea level rises are not trunk roads. I note his comments about local need. I wrote to the cabinet secretary about the South Ford causeway from Benbecula to South Uist where, in 2005, a family of five were swept into the sea and sadly drowned. There are also issues with the 75-year-old Churchill barrier in Orkney and at many other locations.

I note what the cabinet secretary said about local government finance, but this is a statement on infrastructure, so can he please indicate what specific moneys will be given to local authorities to counter what is acknowledged as a significant threat to their infrastructure because of rising sea levels?

Mr Finnie, that was not a short question in anyone’s book. I will not get through everybody’s questions, so let us move along.

Capital spending commitments for local authorities are set out within the budget that was published only last week, and the Cabinet Secretary for Finance continues to engage with local authorities about their annual capital spending programmes. We will ensure that we continue to do everything that we can to support local authorities in meeting some of the capital challenges that they face in local infrastructure.

We must have urgency on tackling climate change. Infrastructure projects are bedevilled by delays, and now the levelling of major public transport projects means delays by two years. The low-carbon fund work on active freeways and segregated cycle routes—[Inaudible.]—by five years. How do those facts match up to the worth of the strategy?

Cabinet secretary, did you hear that?

The screen froze a bit, but I think that I got the gist of it.

I am sure that Willie Rennie will recognise that the record levels of investment that we are making in active travel—over £100 million per year, which is £0.5 billion during the course of the next five years—gives security of funding to take forward major active travel projects. In addition, the provision for active freeways is an additional measure to help support connectivity between towns and cities through active travel. We will now do planning work on that with our colleagues in local authorities and the active travel sector to consider how we can design that programme to maximum effect. The member should be in no doubt that the record level of investment that we are making in active travel is resulting in the delivery of much more active travel infrastructure right across the country at a rapid rate.

The cabinet secretary mentioned a 5 per cent cut in capital funding from Westminster, but the financial transaction money has been cut by a lot more than that. Will that also have an impact on capital spending?

John Mason raises an important point; not only has the capital budget been cut, but our financial transactions for capital spending have also been cut—by more than 66 per cent. That has come about as a direct result of the UK Government deciding to reduce the level of financial transactions that are available for social housing provision. We have taken as much action as we can to help to protect our social housing budget and minimise the impact that that has had, and my colleague Kate Forbes is making representations to the Treasury on the scale of the cut over the course of one financial year.

The member highlights an important issue about the way in which the UK Government is taking unilateral decisions that have a significant impact on our capital spending budget over the course of a year and is not providing certainty for the years ahead. We will do everything that we can to minimise the impacts of those cuts on the Scottish Government’s budget.

The STPR process identified the merits of a Dundee relief road as far back as 2008 and it has recently emerged that the city’s air pollution is back to pre-pandemic levels. Does the cabinet secretary have any specific plans to reduce commuter traffic, journey times and pollution in Dundee?

The member will be aware that Dundee City Council has ambitious plans to introduce a low-emission zone in the city over the course of the next couple of years with the specific objective of helping to reduce the volume of traffic and improve air quality in the city. We are providing financial support over the course of the coming financial year and in the years ahead to help to support the delivery of that programme. I have no doubt that the member will want to support Dundee City Council in taking forward that ambitious programme to help to ensure that the quality of air is improved in our major cities, including in Dundee.

What is the game-changer for reaching net zero in greater Glasgow, which needs to overcome the weakness of its connectivity problems, as travelling south to north requires terminating at the central mainline? Does the cabinet secretary agree that a commitment to crossrail is the kind of game-changer that will lead to a serious modal shift across greater Glasgow?

Pauline McNeill will be aware that the connectivity commission for Glasgow set out a range of measures that it believes should be taken forward to help to improve transport connectivity across the greater Glasgow area, including a metro system. The member will be aware that in publishing the STPR2 phase 1 report yesterday, we gave a commitment to developing that proposal. We are taking that forward with partners in Glasgow City Council and beyond to look at what that could be developed into in the years ahead, including routes from north to south and from east to west in the city and connecting to areas beyond the city boundaries.

That has the potential to be a game-changer for Glasgow and the greater Glasgow area, and we are determined to do everything that we can to help to support the city to realise that vision and have the ability to transform the way that transport connectivity is provided across the district.

If you are very brief, Mr Coffey, I can squeeze you in.

In light of the further expected disruption to Scotland’s exports to the European Union via the Channel routes that has been caused by the Tory Brexit shambles, does the Scottish Government support and encourage new ferry services to emerge that might connect ports in the west of Scotland directly to the European Union via Dublin port?

We are always supportive of looking at how we can develop direct connectivity from Scotland to other European destinations, including through ferry services. Any service would, however, have to operate on a commercial basis. We have had engagement with interested parties in the past. If any commercial operator is looking to establish a link between Scotland and other European destinations, we would always be willing to discuss and consider what support may be available to it to do that.