Meeting of the Parliament (Hybrid)

Meeting date: Thursday, September 24, 2020

Official Report 932KB pdf

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Draft Infrastructure Investment Plan 2021-22 to 2025-26

The next item of business is a statement by Michael Matheson on the draft infrastructure investment plan 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.

14:55  

Today, I am publishing a draft infrastructure investment plan that covers the five financial years from April 2021. The plan delivers our national infrastructure mission.

Infrastructure investment touches the lives of every person in Scotland, from the homes that we live in and the water, energy and telecommunications that we consume to how we travel to the places where we work, shop and learn. In addition, of course, it affects the schools, hospitals and other facilities from where our vital public services are delivered.

As we tackle the harms that have been caused by Covid-19, which are being compounded by the fast-approaching shock of the United Kingdom’s exit from the European Union, infrastructure has a vital role to play in helping businesses and communities to adapt and recover.

We are living in genuinely turbulent times, and it is essential that the Government shows leadership and provides as much stability and certainty as we can. The plan offers a robust pipeline of work that will help to stimulate a green recovery by offering good, green jobs, stimulating supply chains and building market confidence.

Through this year’s programme for government, we launched our national mission for jobs. Infrastructure investment and the plan that I am publishing today will be key to its success. In 2018, the First Minister announced the national infrastructure mission—a commitment to overcome historically lower levels of UK investment and to seek to reach internationally competitive levels. That mission means that there will be £33 billion of Scottish Government investment in the next five years, which it is estimated will support around 45,000 full-time equivalent jobs across those years.

Earlier this year, following broad public engagement, the Infrastructure Commission for Scotland made recommendations on the right future infrastructure priorities. It set out a 30-year vision of infrastructure supporting an inclusive, net zero carbon economy. Today’s plan responds to the Infrastructure Commission’s phase 1 recommendations and shows how we will implement them in consultation with industry, delivery partners and the people of Scotland. The infrastructure plan that I am publishing today sets out our long-term vision for Scottish infrastructure, which is supported by three core themes: enabling the transition to net zero and environmental sustainability; boosting inclusive economic growth; and building resilient and sustainable places.

The plan is closely connected to the recast climate change plan update, which is due to be published in December, and it recognises the vital role that Scotland’s natural environment can play in our infrastructure system. The plan shows how we will enhance our approach to choosing the right future investments and introduces a new infrastructure investment hierarchy, which places an emphasis on maintaining, enhancing and repurposing what we already have. Over time, that will make our public infrastructure investments more sustainable and will deliver better long-term outcomes for the people who use that infrastructure.

The infrastructure investment plan includes the details of around £24 billion of major projects and national programmes that we can confirm now, with more to be added in future years. The package of investments will give Scotland strong foundations for a wellbeing economy, ensuring that society thrives economically, socially and environmentally and that we deliver sustainable and inclusive growth for all.

We will strengthen digital connectivity to help to keep us connected and improve our learning and business opportunities. We will invest in energy efficiency and low-carbon heat solutions to reduce emissions, making our homes and buildings warmer. We will invest in climate resilience, protecting more homes and businesses from flood risk and adapting to changes at our coast that are caused by climate change.

We will deliver more affordable and social homes, continuing to ensure that we have the right homes in the right places. We will operate a safe, sustainable, integrated and resilient strategic transport system, providing investment in railways, ports and harbours, and our road network. We will enable community-led regeneration and town centre revitalisation as part of a new place-based investment programme. That will encourage collaborative working, linking and aligning funding initiatives to ensure that we have a coherent approach in order to effectively progress our 20-minute neighbourhood ambition, as set out in the programme for government.

The plan is by its nature a national infrastructure plan, but it is driven by the needs of our villages, towns and cities, delivering tangible benefits for local communities all over Scotland. In the Highlands and Islands, people told us that they wanted our investments to support tourism, improve connectivity and create jobs. That is why we will invest £30 million in delivering the national islands plan and enhance digital connectivity in rural areas through the reaching 100 per cent programme.

In the north-east, we are investing £220 million in the Baird and ANCHOR—Aberdeen and north centre for haematology, oncology and radiotherapy—project in Aberdeen to improve the efficiency of buildings as well as the experience of patients.

Across the central belt, our investment will target improvements in education, justice and healthcare facilities, including the Edinburgh cancer centre, prison facilities and the new national secure adolescent in-patient service in Irvine. With partners, we will support the National Manufacturing Institute Scotland, the redevelopment of the Royal Botanic Garden and Mission Clyde low-carbon heat networks.

In the south of Scotland, we are investing in tree nursery capacity, helping to increase carbon storage and biodiversity.

We will boost economic growth across each region of Scotland, contributing £525 million to city region and growth deals, be that in Glasgow, Edinburgh, the borderlands or Moray. Those deals will bring to those areas transformational opportunities for inclusive economic growth that are based on local need, creating jobs, improving transport links and digital capacity, enhancing learning environments and increasing housing supply.

I have taken the proactive decision to set out our plans now for consultation with the people of Scotland because our economy and our challenges and opportunities require it. However, our final budget envelope for capital investment in future years will depend on the outcomes of the forthcoming UK spending review. I urge the UK Government to prioritise capital stimulus in its spending plans.

My intention is to bring together the views that we receive through our consultation on the plan, including from local government and other delivery partners, with our confirmed budget settlement. That will enable us to finalise our infrastructure plan and our capital budget allocations.

In the interim, the Government is publishing today a capital spending review framework to complement the infrastructure plan. It sets out high-level planning assumptions that will inform capital allocations over the next five years, whether directly in infrastructure or other areas such as protecting and increasing jobs, or through our capitalisation of the Scottish National Investment Bank.

The capital spending review and the infrastructure investment plan, once finalised, will provide a strong and coherent framework for directing, analysing, shaping and prioritising future commitments. They demonstrate how we will deliver key outcomes and value for money, and how our funding and finance is matched to our decisions.

Although this is a five-year plan, it builds the foundations for a stronger Scotland for decades to come: a Scotland that will harness new opportunities and be resilient in the face of future challenges. The plan will steer the investments that will help our short-term response to Covid-19 and our longer-term recovery. It will drive innovation, ensure access to growing global markets, create good, sustainable jobs and support a just and fair transition to our net zero emissions and wellbeing economy.

I am consulting on the draft plan to ensure the right final approach that benefits the whole of Scotland, both now and in the future. On that basis, I commend the plan to the Parliament.

The cabinet secretary will now take questions on the issues raised in his statement. I intend to allow 20 minutes for questions, after which we will move on to the next item of business. It would be helpful if members who wish to ask a question would press their request-to-speak button, or “R” in the chat function.

I thank the cabinet secretary for the advance sight of his statement and the draft plan. Obviously, I have not had a great deal of time to pore over its details, but at first sight it looks pretty unambitious and lacking in detail.

I agree with the cabinet secretary that we need to invest in infrastructure and level up the economy. I am with him on that, so if he wants to consult on the plan, I am happy to take part in that process and have discussions with him.

However, I put it to the cabinet secretary that there are still things in the previous plan that are yet to be delivered, such as the reaching 100 per cent programme, over which I think that Fergus Ewing offered to resign. There is no detail in the plan on how we will deliver any new ferries over and above the two that have still not been delivered. There is very little detail on road projects—it looks like the cabinet secretary has gone along with the Infrastructure Commission for Scotland, which wants to put the brakes on any new road projects.

The cabinet secretary should probably apologise to communities across Scotland who are going to be left out by the plan. When will he come up with some detail on any of it?

It is pretty clear from Graham Simpson’s comments that he has a fundamental misunderstanding of what an infrastructure plan is there to take forward. Let me try to address some of the issues.

Graham Simpson states that the plan is “unambitious”. Actually, it has the most ambitious level of infrastructure investment in any part of the United Kingdom. I will explain why that is the case. Historically, the level of infrastructure investment in the UK has been below the average of that in other comparable nations. The national infrastructure mission that the plan will deliver will actually see a marked increase in infrastructure investment in Scotland, which will take it to a comparable international level. Based on the 2017 figures, that will result in almost £1.5 billion of additional investment going into the infrastructure plan. We are the only part of the UK that has given such a commitment. Historically, the UK Government has not met the required level of investment. I can assure Graham Simpson that it is not the case that the plan is not ambitious. It is completely the opposite: it is a very ambitious plan that will see greater levels of investment in infrastructure.

Graham Simpson also referred to things in the previous infrastructure plan that have not yet been delivered, such as the R100 programme. The R100 programme is in this infrastructure plan. The previous plan had the digital Scotland superfast broadband programme, which not only delivered but exceeded its target. He clearly has no knowledge of that.

In relation to specific programmes, the plan sets out a range of committed projects. As I said, there will be some £33 billion of investment over a five-year period, of which £24 billion is committed to and set out in the draft plan as it stands. Clearly, further projects and developments will be brought forward over the coming months and years.

I can assure Graham Simpson that this is an ambitious plan; it is much more ambitious than his colleagues at Westminster have been over many years.

Increased infrastructure investment is vital if we are to kick start our recovery and deliver a just transition to a green economy at a time when Scotland faces the deepest recession on record. However, the Scottish Government’s track record on delivering major infrastructure projects has too often been woeful.

Three quarters of the projects in the existing infrastructure plan, which was agreed in 2015, have suffered delays, and costs rose in nearly half of them. Of course, some projects change, but there have been far too many delays and busted budgets, and some projects have just not been up to standard, with tragic consequences.

How will the cabinet secretary ensure that the plan will not repeat the ferry fiasco or the sick kids hospital scandal, and how will he guarantee that the Scottish Government will not hand out new construction contracts to companies that are responsible for shoddy construction and are paying out compensation?

I will refer to a couple of the points that Colin Smyth raised. He is right to refer to projects that have delays or in relation to which costs escalate—sadly, those things are not uncommon for major infrastructure projects. Of course, not all projects come in over budget—a good example is the Queensferry crossing project, which came in under budget. Projects come in over budget for a variety of reasons. Clearly, some infrastructure projects are delayed at the moment as a result of the pandemic. Delays can also be due to unforeseen weather events, which impacted the delivery of the Aberdeen western peripheral route, for example, and major building projects can face geological issues.

I assure Colin Smyth that the investment hierarchy that is set out in the infrastructure investment plan is, as recommended by the Infrastructure Commission for Scotland, based on looking at how we can enhance our existing assets more effectively so that we can make better use of them.

One of the economic benefits that comes from that approach is that it allows small and medium-sized businesses to be engaged. Rather than having single big projects on their own, we have projects of a smaller capital value, which allows smaller local businesses and SMEs to be involved in these processes. That is one of the real values that will come from the infrastructure investment plan over the next five years.

Colin Smyth referred to ferries. He will be aware that that programme will be taken forward through our ferries plan. We will continue to ensure that we invest in ferries to support island communities across the country.

Yesterday, the UK Government announced that there would be no autumn budget. With the financial impact of Covid and the uncertainty of a no-deal Brexit at the end of the year, does the cabinet secretary anticipate that that will have an impact on the delivery of the plan?

In announcing yesterday that there would be no autumn budget, without any regard to the impact that that could have on Scotland, on this Parliament and on the Scottish Government’s budget, the UK Government’s approach is completely disrespectful and unacceptable. That demonstrates the ever-increasing utter disregard that the Conservative Government at Westminster has for devolved Parliaments in the UK. It ill befits Scottish Conservative members to sit on their hands and tolerate the contempt that, by their behaviour, their colleagues in Westminster demonstrate for this place and the people of Scotland.

I assure Maureen Watt that the capital spending framework that my colleague Kate Forbes set out today includes the assumptions on which we are taking forward the investment plan. The reasoned and managed assumptions that have been set out will allow us to deliver on our national infrastructure mission of increasing infrastructure investment in Scotland to much greater levels than those in other parts of the UK. That demonstrates our ambition for the country by ensuring that we get the right type of infrastructure. We are doing that because is in Scotland’s best interests, despite the actions of a UK Government that is systematically seeking to undermine this Parliament and the settled will of the Scottish people on such matters.

I am keen to get all the questioners in, so I ask for shorter questions and answers.

Although a headline of doubling road maintenance might be a good soundbite, closer inspection shows that that applies only to motorways, trunk roads and the Forth road bridge. Just half an hour ago, the Minister for Local Government, Housing and Planning could offer no support to local authorities such as Aberdeenshire Council and its critical network of bridges. Can the cabinet secretary do any better?

Alexander Burnett will recognise that the doubling of maintenance on our trunk road network is of critical importance to the country’s road connectivity. I am surprised that a member from the north-east is so dismissive of that, given the substantial transport infrastructure investment that the Scottish National Party Government has put into the north-east of Scotland over recent years to ensure that the transport system there is fit for purpose.

I assure Alexander Burnett that we will continue to provide our colleagues in local government with budgets that will allow them to make decisions on how they want to invest in their local road network. Despite the UK Government’s continued budget cuts over a number of years, we will do that to protect the local government settlement.

High speed 2 will deliver faster train travel between London and Manchester and Leeds. The cost could be as high as £110 billion, which will be paid for, in part, by Scottish taxpayers, but the project will provide a competitive advantage to London, the midlands and the north of England. Will the cabinet secretary advise what discussions have been held with the UK Government to ensure that Scotland receives its fair share of taxpayer-funded investment in transport and infrastructure?

Kenneth Gibson raises a good point about managing major infrastructure projects. The crossrail project in London is, from what we can see, completely out of control financially, as is the HS2 project. Financial certainty is far from being provided, and that has a potential impact on capital allocations across the rest of the UK.

A number of months ago, I had a discussion with the minister with responsibility for the HS2 project. I sought assurances from him on exactly what economic and spending benefits Scotland would receive from the HS2 programme. I am still waiting for a response to my request.

Too often, the UK Government has taken a London-centric approach to infrastructure investment, at a cost to other parts of the UK. That is why the Scottish Government is setting out in this draft infrastructure investment plan our ambitious plans to increase infrastructure spend in Scotland to ensure that we drive the environmental and economic benefits that can come from such a plan.

Capital investment is, of course, helpful in creating jobs, but of equal importance is ensuring that spending on projects benefits local supply chains and workers. What specific action will the cabinet secretary take to ensure that spending maximises the benefit to local supply chains and improves terms and conditions for workers?

In addition, the investment plan, which is for the next five years, makes no mention of the A83. That will be hugely disappointing to people in my constituency. I am sure that the cabinet secretary will want to take this opportunity to reassure us by indicating that capital resources will be set aside for the A83, and by saying in which financial year they will be set aside.

Let me deal with the last point first. I will make a similar point to the one that I made to Graham Simpson. The infrastructure investment plan does not mention every project that will be taken forward over the next five years. It contains information on £24 billion-worth of projects that have been through the process of getting to a final business case and can go into the infrastructure investment pipeline. Of course, projects will be added to that, including road projects such as, potentially, one for the A83. I am sure the member will welcome the quick action that I have taken in publishing the 11 options ahead of schedule—not in December, but in September—to allow local communities to take a view on the opportunities around the alternative route.

I will return to Jackie Baillie’s point on SMEs and local businesses. One of the real benefits of the infrastructure investment plans investment hierarchy, which I think I mentioned to Colin Smyth, is that there is a much greater focus on maintenance projects. For example, the £1.5 billion of additional maintenance on things such as trunk road contracts allows SMEs and local businesses to be much more engaged in the process than they are in larger capital-based projects for which they are unable to compete.

One of the assessments that has been undertaken in development of the plan involves consideration of the wider regional economic impact that it could have. Localised maintenance programmes enable us to achieve that impact much more easily. I assure Jackie Baillie that one of the central things that we have been thinking about as we take forward the plan is how to support SMEs and local businesses in capital projects. The approach that we have set out in the investment hierarchy can assist us in achieving that.

Events at the Rest and Be Thankful illustrate the impact of the climate breakdown that we are facing. The cabinet secretary will be aware that bridges feature in a number of options for a replacement route there. However, at the moment, they are road-only designs. Some excellent work is being done by the Cowal fixed-link working group on a road and rail option that would not only solve the problem but could have a significant impact on regeneration of the Cowal peninsula. Does the cabinet secretary agree that connectivity does not always mean a road-only solution? Will he ensure that the Cowal fixed-link working group’s road and rail proposal is given genuine consideration, and that scoping feasibility studies are undertaken?

I must say to John Finnie that the 11 options that have been set out as alternative routes for the Rest and Be Thankful have already had some assessment work carried out on them. Therefore, I am afraid that I cannot give that commitment in relation to the Cowal fixed-link project. I am aware of the project, but it is not one of the 11 options that we are considering.

Mr Finnie makes the point that road is not the only solution when it comes to improving transport connectivity. I agree. A good example of that is the economic and social benefits that have come from the Borders railway. That is one of the reasons why I committed last year to investing £70 million in re-establishing the Levenmouth line in Fife, in order not only to improve connectivity but to deliver economic benefits.

John Finnie makes a good point. Roads are not always the solution; at times, other options can help to deliver better connectivity and better economic, social and environmental outcomes. We take those factors into account as part of the investment that we are making through the infrastructure investment plan.

What is in the plan for yards such as Arnish and Methil so that they can compete for offshore wind farm contracts? I am conscious of state aid rules, but if we are to ensure that the greening of our energy brings jobs back to Scotland, we must invest in that industrial infrastructure. What is in the plan in that regard?

Willie Rennie is going wider than the purpose of the plan, and is starting to discuss processes around procurement. He will be aware that there is a significant concern about renewable energy investment being constrained and limited as a result of the approach that the Office of Gas and Electricity Markets and the UK Government are taking to contracts for difference, and how the regulator is interpreting the regulations on how investments can be made. I have made representations to the UK Government on that.

The Department for Business, Energy and Industrial Strategy needs to take action to allow greater levels of investment in renewable energy both onshore and offshore if we are to achieve our climate change ambition of net zero emissions by 2045, and achieve the economic benefits that we can get from that here in Scotland. My colleague Paul Wheelhouse will meet Ofgem next week to address a number of specific regulatory changes that we need in order to support the industry in Scotland and across the UK.

The procurement issue goes wider than the infrastructure investment plan. However, I assure Willie Rennie that we are very alive to the wider issues that he raises around renewables and the impact of regulatory function on how developments can be taken forward; we are pressing the UK Government to take urgent action on them.

Infrastructure investment done well will help our communities to thrive economically, socially and environmentally. What measures are included in the infrastructure investment plan to tackle inequalities and economic exclusion in Ayrshire?

Ruth Maguire asks a good question. Alongside the draft plan, I am publishing an equity and fairer Scotland duty interim statement, which members can consider. Tackling inequality is a central part of the infrastructure investment plan, and of a number of the strategic projects that will be supported over the next five years. For example, we have already set out ambitious plans for continued investment in housing to ensure that an ever-increasing level of social housing is available, which the plan will help to support over the next five years.

Ruth Maguire will also be aware that, in the near future, we will have the 2040 housing plan, which will be introduced by my colleagues Aileen Campbell and Kevin Stewart. The housing plan will set out our ambition to make sure that everyone who requires access to decent housing in Scotland has it.

The wider economic benefits that come from creating greater employment in the Scottish economy and supporting people into employment help to tackle poverty and ensure that we provide good-quality green jobs during this particularly challenging time, as we move through the pandemic and recover from it.

In the Highlands, we are quite used to being left behind with regard to infrastructure delivery. On page 42 of the plan, there is mention of the Highland prison, which was promised to be built by 2016. The plan says that it “should be” completed by 2026. Why will it not be concluded by 2026?

Edward Mountain will be aware that we have made significant investment in our criminal justice estate over an extended period. When he talks about the lack of investment in the Highlands, it is interesting that he chooses not to mention the justice centre that is being created in Inverness. When I was the Cabinet Secretary for Justice, I had the privilege of breaking the ground for the new centre, which will be a state-of-the-art facility in the Highlands for use in the criminal justice system.

As we go forward with our capital investment programme, we will be able to consider what further programmes and other facilities can be introduced into it. It would aid us greatly in achieving that if the Scottish Government had a clear line of sight of the UK Government’s capital spending review, which I understand has been delayed yet again.

We will get on with doing the best job we can do, as set out in our ambitious infrastructure investment plan, and we will make sure that we continue to invest in Scotland’s infrastructure in a way that serves the people of Scotland well, now and in the future.

That concludes questions on the statement on the infrastructure investment plan. I apologise to members whom I was not able to call. Clearly, that proves the equation that longer questions and longer answers mean fewer questions and fewer answers.