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National Planning Framework for Scotland: Monitoring Report 06

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SCOTLAND IN 2006

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A GROWING ECONOMY

43. The National Planning Framework reflects the Executive's commitment to raising the long-term sustainable growth rate of the Scottish economy. The average rate of growth of Scotland's Gross Domestic Product ( GDP) was 1.8% per annum over the period 1974 to 2004. 26 However, the rate of growth has varied significantly since 1974 and the current rate is lower than it was in the mid to late 1990s. Recent figures suggest a relatively stable growth rate of just under 2%. Most forecasters predict that the Scottish economy will perform less strongly than that of the UK over the next two years. The Fraser of Allander Institute predicts that Scotland's GDP will grow by 2.1% in 2006 and 2.3% in 2007. 27 This compares with forecasts of 2.3% in 2006 and 2.5% in 2007 for the UK.

44. The trend in value added to the economy ( GVA) is one of reasonably steady growth over the period 1999 to 2004, primarily driven by the service sector. 28 For 2004 the rate of growth was 1.9%. 29GDP and GVA figures indicate that the economy is growing, with more and higher value jobs being created. In 2005, company failures in Scotland were at a 7-year low.

FIGURE 2:GROWTH IN GDP - INTERNATIONAL COMPARISONS

FIGURE 2:GROWTH IN GDP - INTERNATIONAL COMPARISONS

Sources: Scottish Executive (2005) Scottish Economy fact sheet 3,
November 2005; Scottish Executive (2005), Key Scottish Environment Statistics 2005;
Europa (2005), Real GDP Growth Rate, 2005.

MAP 6

45. Scotland's recent economic performance has been stronger than the average performance across the 25 EU member states [see Figure 2]. However, the differences between the fastest and slowest growing economies are marked. Average earnings in Scotland remain well behind those of London and the South East of England.

46. Estimates of local economic output by Mackay Consultants indicate that the City of Aberdeen showed the highest growth in GDP over the period 2000 to 2004, with an annual average increase of 2.06%. Three rural areas, Dumfries and Galloway (+1.90%), the Scottish Borders (+1.88%) and Argyll and Bute (+1.66%) came next. The average growth rate for Glasgow (+1.50%) was significantly above the Scottish average of +1.34%. However, the growth rates for Edinburgh (+1.24%) and Dundee (+1.12%) were below the Scottish average. At the bottom of the rankings, Shetland's GDP fell by 0.4% over the period as a result of a decline in throughput at the Sullom Voe oil terminal and the closure of a number of salmon farms. West Lothian's economic output declined at an annual average of 0.32%. The area was badly affected by the contraction of the electronics industry, as were Renfrewshire (+0.32%), North Lanarkshire (+0.44%) and Inverclyde (+0.80%). 30

FIGURE 3: SCOTTISH AND UK EMPLOYMENT RATES 1999-2005

FIGURE 3: SCOTTISH AND UK EMPLOYMENT RATES 1999-2005

Source: Scottish Executive (2005), Scottish Economic Report, December 2005

47. The Scottish labour market outperformed that of the UK [see Figure 3] and most other European countries during 2005. Employment levels are still rising, while the rate of unemployment continues to fall. The national employment level is currently over 75% and the proportion of people in work is currently above the UK average. 28 The level of employment in Glasgow remains significantly below the national average. 31 The Fraser of Allander Institute predicts that Scotland's strong net jobs growth will continue, with increases of 29,400 in 2006, 30,100 in 2007 and 32,700 in 2008. 27 The outlook for unemployment is low and stable, with rates of 5.2% and 5.1% predicted for 2006 and 2007 respectively.

48. The number of employee jobs increased by more than 11% in the period 1995 to 2004. The biggest increases in mainland Scotland were in Midlothian (33%), West Lothian (31%) and Perth and Kinross (21%) [see Map 6]. Glasgow and Edinburgh experienced increases of 19% and 15% respectively. Recent growth has resulted in dramatic turnarounds in the island authority areas, with increases of 28% in Eilean Siar, 26% in Orkney and 20% in Shetland. Growth has not been as strong in the South and West. Decline in the numbers employed occurred in Renfrewshire (-10%), West Dunbartonshire (-5%), North Ayrshire (-4%) and Aberdeen (-2%).

49. Scotland's economic activity rate has improved from 77.0% in 1999 to 79.6% in 2005 and is now higher than the UK average. However, significantly lower activity rates persist in West Central Scotland. Recent research has highlighted concentrations of poor health and low health expectancy in parts of Glasgow, Inverclyde, Renfrewshire, Aberdeen and Dundee.

MAP 7

50. Services now account for 70% of total GVA and are established as the dominant sector of the economy. Financial services are one of the fastest-growing sub-sectors, with an average annual growth rate of 7.5% between 1999 and 2005. 28 Recent performance has been better than the UK average for the sub-sector. The long-term future of the financial services sector has been analysed by the Financial Services Strategy Group and a Strategy for the Financial Services Industry in Scotland has been published. 32

51. The rate of decline of Scotland's manufacturing sector has slowed since 2002.28 Food and drink exports have increased while the electronics sector has continued to decline. Employment in manufacturing has fallen by 24% since 1995. 33

52. The National Planning Framework reflects the Executive's commitment to creating a knowledge-driven economy capable of meeting the challenges of a highly competitive global environment. Scotland's skills profile resembles that of the South East of England and research commissioned by Scottish Enterprise indicates that our knowledge economy is growing. 15 In 2003, 35.6% of all employment in Scotland was in sectors requiring the highest skills. However, about a third of private-sector jobs were in parts of the economy less reliant on higher order skills, such as retailing, catering and tourism.

FIGURE 4: SPATIAL DISTRIBUTION OF THE KNOWLEDGE ECONOMY, 2002

FIGURE 4: SPATIAL DISTRIBUTION OF THE KNOWLEDGE ECONOMY, 2002

Source: Hepworth, M. & Pickavance, L. (2004), The Geography of the Scottish Knowledge Economy: a report prepared for Scottish Enterprise, June 2004.

53. Glasgow and Edinburgh city regions dominate Scotland's knowledge economy, accounting for 63% of knowledge-driven employment between them [see Figure 4]. An analysis of employment change between 1998 and 2002 indicates that most parts of Scotland are experiencing a shift towards knowledge-driven economic development [see Map 7]. Edinburgh and Glasgow outpaced Aberdeen and Dundee over the period. The Highlands and Islands experienced a substantial increase in employment in knowledge-driven sectors, starting from a low base. The picture south of the Central Belt is less positive, with the Borders, Dumfries and Galloway and Ayrshire all losing ground. The growth of employment in knowledge-driven business activity was markedly lower in rural Scotland (10.8%) than in rural England (42.1%) in the period 1994 to 2003. Accessible rural areas in England have proved attractive locations for knowledge-based activities because of their proximity to large metropolitan centres.

MAP 8

54. Concentrations of highly skilled people exist in Aberdeen, Stirling, Perth and Kinross and Edinburgh, as well as East Renfrewshire and East Dunbartonshire outside Glasgow. Urban areas have the highest concentrations of people with degrees and remote rural areas the lowest. 34 There are higher proportions of people with degrees in rural areas where centres of higher education, such as the Crichton Campus in Dumfries and the Heriot-Watt campus in Galashiels, have been established. On the other hand, skill levels on a par with remote rural areas exist within the fabric of our urban areas, particularly in and around Edinburgh and Glasgow. A low proportion of university graduates in the population does not automatically equate to disadvantage but may mean that communities are less well placed to take advantage of higher value employment opportunities. Education and training will be critical in maintaining the momentum of Scotland's knowledge economy and promoting social inclusion.

55. While Scotland has a strong skills base, performance in research and development is mixed. In 2003, higher education research and development as a proportion of GDP was 0.64% in Scotland, in comparison with 0.40% and 0.39% in the UK and Organisation for Economic Cooperation and Development ( OECD) countries respectively. Edinburgh, Glasgow, Aberdeen and Dundee have relatively large concentrations of university activity. However, recent research has shown that this knowledge generation activity is not matched by business research and development activity, and that Scotland shows low levels of connectivity between locally-owned firms and universities. Despite a recent increase in business research and development activity, Scotland still lags behind the UK and other countries. In 2003, Scottish business enterprise research and development was 0.58% of GDP, compared with 1.24% and 1.18% in the UK and the OECD respectively. 35UK business research and development activity is heavily concentrated in the southern and eastern areas of England 36; while Scottish business research and development activity is focused on West Lothian (37%), Edinburgh (21%) and North Lanarkshire (10%).

REGENERATING COMMUNITIES

56. Over the last 3 years the Executive has targeted around £302 million at the regeneration of Scotland's most deprived communities through the Social Inclusion Partnership ( SIP) and Better Neighbourhood Services Fund ( BNSF) programmes. These have now been merged into the new Community Regeneration Fund ( CRF) which will invest a further £318 million in targeted regeneration over the next three years. The integration of Social Inclusion Partnerships within the strategic framework of Community Planning Partnerships reflects the development of a more integrated approach to identifying and overcoming deprivation. The Community Regeneration Fund is focused on the 15% most deprived areas which remain strongly concentrated in West Central Scotland [see Maps 8 and 10].

57. The Executive is supporting three pathfinder Urban Regeneration Companies ( URCs) in Clydebank, at Craigmillar in Edinburgh and at Raploch in Stirling. It sees the URC model as an effective means of harnessing the skills and resources of the public and private sectors in areas which offer opportunities for major change. The Regeneration Policy Statement confirms the status of the Clyde Corridor as a national priority and identifies the Clyde Gateway to the south-east of Glasgow and the area of the Clyde Waterfront from Glasgow city centre to the Erskine Bridge as the main foci of renewal work in the medium term. Three new URCs are being established to take forward the regeneration of the Clyde Gateway, Irvine Bay in North Ayrshire, and Riverside Inverclyde. 13

MAP 9

HOUSING SUPPLY

58. Scotland's housing market has cooled since the first National Planning Framework was published. House prices continue to rise but at lower rates. The average house price in Scotland was £128,000 in October 2005. House prices rose by 9% over the year to October in Scotland, compared with a rise of only 3% for the UK as a whole. The Bank of Scotland predicts that the Scottish housing market will again outperform the UK market in 2006. However, house prices in Scotland remain on average significantly lower than those in England. The average UK house price was £186,100 in October 2005.

59. House prices in Edinburgh are the highest in Scotland. 28, 37 This is long established and likely to continue for the foreseeable future. The largest price increases are occurring in towns close to the main cities. Edinburgh, the Lothians and parts of Central Scotland are the areas with the highest levels of need for affordable housing [see Map 9]. 38 While there is still a surplus of social housing in parts of West Central Scotland, recent research by Glasgow City Council indicates that the pool of family houses within the means of people on average wages is shrinking. 39

60. The National Planning Framework indicated that by 2006 resources would be made available to provide 18,000 new and improved homes for social rent and low-cost ownership. In 2004 this target was increased to 21,500 houses, of which over 16,500 will be socially rented and nearly 5,000 will be for ownership.

FIGURE 5: HOUSE COMPLETIONS 1995 - 2004

FIGURE 5: HOUSE COMPLETIONS 1995 - 2004

Source: Scottish Executive (2005), Housing Trends in Scotland: quarter ending 30 June 2005, Scottish Executive Statistical Bulletin Housing Series, HSG/2005/5, November 2005.

61. There has been an upward trend in the annual number of house completions over the period 2000 to 2004 40 [see Figure 5]. Data on housing association stock is the best available proxy for affordable housing completions. However, as private housebuilders are able to offer housing at below-market rates without involving a registered social landlord or housing association, this may not wholly reflect the split between market value and "affordable" housing. In addition, private sector market-value housing cannot be assumed to be "unaffordable", as much depends on the local housing market and local income levels. Housing Association completions currently account for less than 20% of the total number of house completions. There is a need to maintain a variety of choice in housing tenure against the background of an increasing total number of housing completions.

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62. The Executive's agenda of measures to address the supply of affordable housing is set out in detail in the housing policy statement published in 2005. 41 The reforms to development planning set out in the Planning Bill currently before Parliament will have a significant impact in ensuring a sufficient supply of land for housing. In the more immediate term, the Executive has established a working party to be chaired by the Minister for Communities, with the participation of local authorities and others, to look at the interaction between planning and housing policies at national and local level. The Executive has also announced research into the strengths and weaknesses of possible additional planning mechanisms to assist with the delivery of affordable housing.

A HIGH QUALITY ENVIRONMENT

NATURAL HERITAGE

63. The extent of Scotland's land area covered by European natural heritage designations has not risen significantly over the past two years 26. However, Scottish Natural Heritage ( SNH) has proposed seven additions and three extensions to Scotland's network of Special Protection Areas ( SPAs). These include new SPAs for hen harriers on the Renfrewshire Heights, in South East Sutherland and on the Orkney Mainland and a new SPA for bean geese on the Slamannan Plateau. In October 2005, the European Court of Justice ruled that the transposition of the EU Habitats Directive into UK legislation was deficient in not specifically requiring development plans to be subject to appropriate assessment of their implications for Natura sites. The Executive has consulted on changes to the Conservation (Natural Habitats, etc.) Regulations 1994 to comply with the ruling.

64. The Executive has consulted on proposals for legislation to give Scottish Ministers powers to designate, de-designate or revise the boundaries of National Scenic Areas, and for promoting a non-statutory approach to their management. 42SNH has identified the Solway Firth; the Argyll Islands and Coast; the Ardnamurchan, Small Isles and South Skye Coast: the North Skye Coast; and Wester Ross; and North Uist, Sound of Harris, Harris and South Lewis as the five strongest candidates for designation as Scotland's first Coastal and Marine National Park. 43 The Executive will consult on SNH's recommendations during 2006. In June 2006, Scottish Natural Heritage designated 28,000 acres in the Flow Country of Caithness and Sutherland as a National Nature Reserve.

65. Research commissioned by SNH has estimated that almost 93,000 jobs and £2.2 billion are generated by Scotland's natural heritage. 44 This represents 3.9% of total employment and 3.1% of Scotland's GVA.

FORESTRY

66. The review of the Scottish Forestry Strategy being undertaken by the Executive and the Forestry Commission is examining the contribution which forestry can make to the realisation of social and regional objectives. 45 The Executive has contributed an additional £1 million to the Woods in and Around Towns ( WIAT) initiative to boost the development of woodlands of benefit to urban communities. In November 2005 the Glasgow and the Clyde Valley Structure Plan Joint Committee and the Forestry Commission launched a Woodland Framework which sets out a strategy for strengthening the city region's green network through woodland planting. A locational premium has been established under the Scottish Forestry Grant Scheme ( SFGS) to encourage planting on vacant and derelict land, with priority being given to key urban regeneration areas such as the Clyde Waterfront, the Clyde Gateway, Motherwell/Ravenscraig, Bishopton and Gartcosh/Gartloch.

SCOTTISH NATURAL HERITAGE HAS IDENTIFIED THE SOLWAY FIRTH; THE ARGYLL ISLANDS AND COAST; THE ARDNAMURCHAN, SMALL ISLES AND SOUTH SKYE COAST; THE NORTH SKYE COAST AND WESTER ROSS; AND NORTH UIST, SOUND OF HARRIS, HARRIS AND SOUTH LEWIS AS THE FIVE STRONGEST CANDIDATES FOR DESIGNATION AS SCOTLAND'S FIRST COASTAL AND MARINE NATIONAL PARK

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MAP 10

VACANT AND DERELICT LAND

67. The Scottish Vacant and Derelict Land Survey for 2005 indicates that the amount of vacant and derelict land has fallen from 13,571 ha. to 10,570 ha. over the past decade. 46 Vacant and derelict land is heavily concentrated in West Central Scotland. Some 46% of the Scottish total is in the eight local authorities making up Glasgow and the Clyde Valley. The highest amounts are in North Lanarkshire and Glasgow (each with 12% of the Scottish total). There are also significant amounts in Highland (including the former fabrication site at Ardersier), Ayrshire, West Lothian and Fife. Research undertaken to inform the work of the Ministerial Group on Regeneration has highlighted a close correspondence between concentrations of vacant and derelict land and deprivation in the Glasgow Conurbation [see Map 10].

68. The Executive allocated £20 million to the Vacant Land and Derelict Land Fund for the period 2004 to 2006. Glasgow, North Lanarkshire and Dundee were awarded sums of £10 million, £6 million and £4 million respectively to rehabilitate former industrial sites, landfill sites and derelict housing. It is estimated that the funding will result in the remediation of 300 ha. of vacant and derelict land. The Executive has committed an additional £24 million over the next two years to tackle the biggest concentrations of vacant and derelict land, including £14 million for Glasgow and South Lanarkshire, as a contribution to the Clyde Gateway initiative.

69. The Executive is providing £3 million to help British Waterways Scotland regenerate the Caledonian, Crinan, Forth and Clyde, Union and Monklands canals.

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A BETTER TRANSPORT SYSTEM

70. The 2004 White Paper on Transport stated that the Executive's objective was to promote "economic growth, social inclusion, health and protection of our environment through a safe, integrated, effective and efficient transport system". 47

71. Powers over Scotland's rail network were transferred to Scottish Ministers in October 2005. The Executive and the Strategic Rail Authority consulted on a Planning Assessment to inform the development of a Scottish rail strategy in the autumn of 2005. The Executive is promoting legislation which will introduce simplified procedures for the approval of rail and tram projects.

EXTERNAL LINKS

72. Glasgow, Edinburgh and Aberdeen airports handled almost 1.3 million passengers in January 2006, an increase of 5.8% on the pervious year, with international traffic increasing by 14.6%. The Route Development Fund is continuing to support the development of new direct international links from Scottish airports. In the period since the publication of the first National Planning Framework, new links have been established to North America, Scandinavia, Central and Eastern Europe and Mediterranean destinations. A new service between Inverness and Dublin establishes the first direct air link between the Highlands and the Republic of Ireland. Atlantic Airways has launched the first scheduled direct air link between Shetland and London. BAA has issued consultative drafts of 25-year masterplans for Edinburgh, Glasgow and Aberdeen airports.

73. The Glasgow and Edinburgh airport rail links are being promoted under private legislation. The UK Transport Secretary has announced that consideration is to be given to the development of a high-speed rail line north from London. The consultation on the National Transport Strategy recently sought views on whether a Continental-style high-speed rail link between Scotland and London might be needed as a long-term alternative to flying.

74. Work on upgrading the 5.8-mile section of dual carriageway between the A74(M) at Gretna and the M6 at Carlisle to motorway standard is expected to be completed in December 2008.

75. Cargo handled at Aberdeen Harbour reached a record 4.9 million tonnes in 2005, with the tonnage of shipping reaching an all-time high for the seventh year in succession at 21.7 million tonnes. In collaboration with Scottish Enterprise and North Ayrshire Council, Clydeport is promoting the development of the Clyde Container Terminal at Hunterston as a deep water container hub for Northern Europe.

76. Fife Council is promoting the Rosyth Waterfront as Scotland's Continental Ferry Port and European Gateway for sea-borne passengers and freight. Superfast Ferries has reduced its Rosyth to Zeebrugge ferry service to three crossings per week because of disappointing take-up of its freight service. Norwegian officials are examining the possibility of a new ferry service between Kristiansund and Rosyth.

77. Competition from low-cost flights has led to the Seacat ferry service between Troon and Belfast being discontinued. The Scottish Executive and the Northern Ireland administration are making a further attempt to attract tenders for the operation of a ferry service between Campbeltown and Ballycastle.

INTERNAL CONNECTIVITY

78. The 5-mile M74 extension between Fullarton and the M8 at the Kingston bridge has been approved by Scottish Ministers. Work is expected to be completed by the end of 2010.

79. Work on the second bridge over the Forth at Kincardine is programmed to start in 2006. The route of the Aberdeen Western Peripheral road was announced by the Minister for Transport in December 2005. The A82 Route Action Plan proposes £90 million of improvement works between Tarbert and Fort William over the next 10 years and the Minister of Transport has approved a £16 million package of improvements for Loch Lomondside and Crianlarich over the next five years. A study is being undertaken to determine how best to take forward improvements to the A9 between Perth and Blair Atholl.

80. In December 2005 the Executive published its proposals for upgrading the 10 km. section of the A8 between Baillieston and Newhouse to motorway standard. 48 Improvements at the Eurocentral and Chapelhall junctions will facilitate access to strategically important development locations at Newhouse and Ravenscraig. The preferred scheme also allows for future upgrading at Baillieston Interchange to improve traffic movements between the M8 and M73 and link with the M74 Extension. Work on upgrading the A80 between Stepps and Haggs to motorway standard is programmed to start in 2008. Both projects are expected to be completed in 2011.

81. The opening of the Larkhall - Milngavie rail line in December 2005 has reconnected Larkhall to the rail network, providing rail access to Glasgow for the first time since 1968. The project has also allowed the doubling of the frequency of the rail service between Glasgow City Centre and Milngavie and a new station has been opened at Kelvindale to serve new business development and housing near Glasgow Science Park.

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THE OPENING OF THE LARKHALL - MILNGAVIE RAIL LINE IN DECEMBER 2005 HAS RECONNECTED LARKHALL TO THE RAIL NETWORK, PROVIDING RAIL ACCESS TO GLASGOW FOR THE FIRST TIME SINCE 1968

82. Work began on double tracking the rail line to the east of Bathgate in the summer of 2006 as a step towards the reopening of the Airdrie - Bathgate line. The restoration of 21 km. of rail line between Stirling and Kincardine is expected to be completed in spring 2007. The reopened line will carry coal from the West of Scotland to Longannet Power Station and allow the reintroduction of passenger services between Stirling and Alloa. In June 2006 the Scottish Parliament approved a Private Bill providing statutory powers for the restoration of the Borders rail link between Newcraighall and Tweedbank.

83. Transport Scotland has commissioned a study of the case for electrifying the Glasgow - Edinburgh main line. The Strathclyde Partnership for Transport ( SPT) and the South-East Scotland Transport Partnership ( SESTRAN) have jointly commissioned a study of the potential for a high-speed rail link between Glasgow and Edinburgh which they believe could ultimately form part of an Anglo-Scottish high-speed rail network. Transport modelling has been undertaken to identify the improvements in strategic transport infrastructure required in the West Edinburgh Planning Framework area.

84. A report commissioned by Highlands and Islands Enterprise, HITRANS and the Highland Rail Network has identified improvements to the Highland main line which could reduce journey times between Inverness and Edinburgh/Glasgow to 2 hours and 45 minutes, making the rail journey more competitive with road travel. 49

85. The Executive intends to develop a long-term strategy to deliver improvements in lifeline air and ferry services.

SUSTAINABLE TRANSPORT AND LAND USE

86. Scots are travelling a great deal more than in the past. The estimated average distance travelled per person per year increased by 43% between 1985/86 and 2002/03. Throughout North-West Europe the most rapidly increasing transport modes are air and road transport, precisely those which are least sustainable. 6 In Scotland, road traffic has grown by 19% over the last 10 years. While journeys by rail have increased over the period 1999 to 2005, the car remains the dominant mode of travel and car use is steadily going up. The proportion of adults who travel to work or educational institutions as drivers has increased, while the proportion travelling as passengers has decreased [see Figure 6]. 34 The Transport Model for Scotland forecasts that road traffic will grow by between 22 and 23% between 2002 and 2011. The Executive is investing substantially in public transport to promote the availability of more sustainable alternatives to single-occupancy car use.

FIGURE 6: TRAVEL TO WORK/EDUCATION BY MODE

FIGURE 6: TRAVEL TO WORK/EDUCATION BY MODE

Source: Scottish Executive (2006) Scotland's People Annual Report 2005
Scottish Household Survey

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87. Deficiencies in the transport system continue to have a significant impact on the economy and the environment and are a barrier to accessing jobs, education and services. These factors apply in rural and urban areas, although the main consideration in rural areas is distance. 50

88. The Freight Facilities Grant scheme has funded more than 20 projects since 1997. Most recently it has supported short-haul rail facilities to link Grangemouth docks and storage facilities at Elderslie as well as enhancement of the rail loading gauge between Mossend and Elgin, allowing more freight to be moved by rail between the Central Belt and the North East. Such projects can remove significant amounts of lorry traffic from Scotland's roads.

89. The Executive is supporting the UK Government in seeking the inclusion of the aviation sector, which accounts for a modest but growing proportion of greenhouse gas emissions, in the EU Emissions Trading Scheme.

90. The consultation on the National Transport Strategy has sought views on what should be done to ensure that transport considerations are taken into account in making decisions on the location of health services and schools.

Energy

91. The pattern of electricity generation in Scotland in 2002 was 36% nuclear, 33% coal, 20% gas, 8% hydro and 3% other renewables. 4 The amount of electricity generated from nuclear fuels fell by 16% between 1990 and 2002, reflecting the loss of generating capacity over that period. Electricity generated from renewable sources rose by 13% over the 12 years to 2002. Around 20% of the electricity generated in Scotland is exported to the rest of the UK.

92. Oil and gas continue to make a significant contribution to the Scottish economy. Over 4% of the workforce is dependent on oil and gas production. The North Sea contains Western Europe's largest oil and gas reserves and is one of the world's key non- OPEC producing regions. To date, around
34 billion barrel of oil equivalents have been produced. Future potential could be up to 28 billion, though current investment plans target only 11.5 billion. Higher oil and gas prices have contributed to a doubling of levels of exploration in the North Sea over the last two years, and are likely to prolong the productive life of the UK Continental Shelf.

ELECTRICITY GENERATED FROM RENEWABLE SOURCES ROSE BY 13% OVER THE 12 YEARS to 2002

MAP 11

93. The UK Government's review of energy policy considered both supply and demand issues in determining the steps which need to be taken to address the challenge posed by climate change and secure clean and affordable energy for the long term. The report setting out the conclusions of the review contains proposals designed to reduce the demand for energy, to secure a mix of clean, low carbon energy sources, and to streamline the decision-making process for energy projects. 51 In its response to the UK review, the Scottish Executive stressed the need to focus on the following policy issues:

  • increasing the proportion of renewable and low-carbon energy within our overall energy mix;
  • developing and sustaining our energy industries, establishing Scotland as a leading location for the development of renewable energy technology;
  • promoting greater energy efficiency;
  • ensuring security and diversity of energy supplies;
  • ensuring the rising costs of energy do not exacerbate fuel poverty or unfairly constrain economic growth; and
  • striking the right balance in developing Scotland's energy resources and infrastructure whilst protecting the natural environment. 52

The Executive's response also highlighted carbon capture and storage as a potentially cost-effective method of reducing CO 2 emissions and suggested that there could be significant benefit in locating a demonstration facility for carbon capture ready high-efficiency coal technology in Scotland. A task force is to be established to speed up oil and gas development to the West of Shetland.

94. In February 2006, Scottish Power announced that it intends to install flue gas desulphurisation technology at the coal-fired power station at Longannet in Fife. This should extend the life of the station beyond 2015. Scottish Power's other coal-fired power station at Cockenzie is due to close by 2015. British Energy will shortly begin its consideration of the scope for extending the life of the Hunterston B nuclear power station in Ayrshire beyond its current closure date of 2011.

95.BP, in conjunction with a number of oil and energy partners, is currently developing proposals for the world's first industrial-scale project to generate "carbon-free" electricity from hydrogen. The project would involve adapting Peterhead power station to burn hydrogen generated from natural gas and re-injecting the CO 2 it generates into the depleted Miller field to enhance oil and gas recovery. When fully operational, the project is expected to capture and store around 1.3 million tonnes of CO 2 each year and provide electricity to the equivalent of a quarter of a million homes. A final investment decision by the partners will be taken later this year. In the event of a decision to go ahead, the plant could begin operation around 2009.

96. The number of wind turbines in Scotland increased by a third in 2005 [see Map 11]. The UK's largest windfarm began operating at Black Law in South Lanarkshire in January 2006. There are now 515 wind turbines in operation, with a further 197 under construction. In April 2006, the Executive approved proposals to build Europe's largest windfarm at Whitelee to the south of East Kilbride. Two demostration wind turbines are being installed in the Beatrice oilfield as the first step towards the establishment of a 200 turbine offshore windfarm in the Moray Firth.

97. Scotland is now generating 16% of its electricity from renewable sources and is on course to surpass the Executive's target of generating 18% of electricity from renewable sources by 2010. National Grid has projected Scotland's electricity generation mix in 2010 as 45% fossil fuel, 26% nuclear, 23% onshore wind and 6% hydro. The Executive's longer-term target of deriving 40% of electricity from renewable sources by 2020 is also likely to be achieved. 53 It has been estimated that this would require a renewables generating capacity of 6 Gigawatts ( GW). Currently, Scotland has the built and consented capacity to generate 3.7 GW of electricity from renewable sources (2.3 GW from wind farms: 1.3 GW from existing hydro schemes; and 0.1 GW from new hydro developments). The Executive is currently consulting on proposed changes to national planning policy on renewable energy developments designed to provide an improved context for assessing the full range of renewable energy projects. 54

98. The Executive is investing an additional £20 million in marine energy, biomass, hydrogen fuel cell and microrenewable projects over the next two years. Funding has been made available to support the development and installation of infrastructure to generate approximately 10% of electricity from waves and tidal sources. The Marine Energy Group considers that 1.3 GW of electricity could be derived from the Scottish marine environment by 2020. 55 The Forum for Renewable Energy Development in Scotland has estimated that some 0.44 GW of electricity could be generated from biomass. 56 The Forestry Commission has highlighted the potential biomass contribution of Scotland's forests in the review of the Scottish Forestry Strategy. The Executive is committed to the development of a Biomass Action Plan to promote the expansion of energy generation from wood and fuel crops.

99. Scottish and Southern Energy and Scottish Power have submitted proposals for upgrading the electricity transmission line between Beauly and Denny. The 220 km. route passes through the Cairngorms National Park and a number of other environmentally-sensitive areas and the scheme has attracted a considerable number of objections.

THE EXECUTIVE IS INVESTING AN ADDITIONAL £20 MILLION IN MARINE ENERGY, BIOMASS, HYDROGEN, FUEL CELL AND MICRORENEWABLE PROJECTS OVER THE NEXT TWO YEARS

WASTE MANAGEMENT

100. The National Waste Plan sets a target of recycling or composting 25% of municipal solid waste by 2006. The largest component of municipal solid waste is household waste and in 2001/02 less than 6.0% of household waste was recycled or composted. By 2004/05, this figure had increased to 17.3% [see Figure 7]. 57

FIGURE 7: PERCENTAGE OF HOUSEHOLD WASTE COMPOSTED OR RECYCLED

FIGURE 7: PERCENTAGE OF HOUSEHOLD WASTE COMPOSTED OR RECYCLED

Source: Scottish Environment Protection Agency (2005) Waste Data Digest 5.

101. By 2010, biodegradable municipal waste going to landfill will need to be reduced to 75% of 1995 levels (i.e. to no more than 1.26 million tonnes) in order to comply with the European Landfill Directive and the National Waste Strategy. An interim target of 1.5 million tonnes has been set for 2006. In 2003/04 1.79 million tonnes of biodegradable municipal waste was sent to landfill and the trend is downwards. 58 The Scottish Environment Protection Agency expects the target for 2006 to be achieved.

102. The National Planning Framework indicated that by 2006 two-thirds of existing landfill sites would fail to meet the standards of the European Union Landfill Directive and would have to close. In 2002 there were 251 licences for operational landfill sites, this had reduced to 232 in 2004. Unless there is significant cessation of activity on currently operating landfill sites over the next year it is unlikely that two-thirds of the existing landfill sites will have closed.

WATER AND DRAINAGE

103. Lack of capacity in water and drainage infrastructure is still a significant constraint on development in some areas. Scottish Water's first capacity plan was published in March 2006. 59 This allows planning authorities and developers readily to identify existing capacity at specific locations. Scottish Water is in the process of identifying its priorities for investment in water and drainage infrastructure in the period 2006 to 2014. Ministers have set Scottish Water the objective of providing sufficient strategic infrastructure to meet all estimated strategic development requirements over the period to 2014. £14 million per annum has been allocated to Communities Scotland to fund the connection of affordable housing to water and drainage networks. The Executive is preparing a Planning Advice Note ( PAN) on water and drainage to promote more effective engagement between planning authorities and Scottish Water on the provision of infrastructure to support new development.

MAP 12

104.SEPA is developing an on-line map of areas at risk from flooding which should be operational in 2006. This will help to inform decisions on the location of development and the provision of flood mitigation and attenuation measures where vulnerable sites have been selected for development.

105. The NPF indicated that by 2007 315 km. of poor or seriously-polluted watercourses should have been improved. Between 1999 and 2004 some 402 km. of poor quality and seriously polluted streams and rivers were improved. 60 The trend for Scottish rivers in the period 2001 to 2004 has been one of significant increases in the stretches classified as being of excellent or good quality [see Figure 8].

FIGURE 8: RIVER WATER QUALITY

FIGURE 8: RIVER WATER QUALITY

Source: Scottish Environment Protection Agency, 2004.

106. The European Water Framework Directive (2000/60/EC) requires the preparation of River Basin Management Plans which will set environmental targets for River Basin Districts and specify the measures which should be taken to achieve them. Scotland will be covered by two River Basin Management Plans. One plan will cover the Solway-Tweed River Basin District, the other will cover the rest of Scotland [see Map 12]. SEPA is undertaking research to determine the content of the plans which are due to be published in 2009. Characterisation and economic analyses for the two plan areas have already been completed. Consideration will be given to ensuring appropriate links between the planning and river basin management systems once the current research programme is complete.

MAP 13

COMMUNICATIONS TECHNOLOGY

107. The Executive has achieved its target of making broadband available to every community in the country by the end of 2005 [see Map 13]. The programme of upgrading 378 rural telephone exchanges to bring broadband internet services to some of Scotland's remotest communities was completed in eight months. 99.7% of households now have access to broadband, putting Scotland ahead of most EU countries in terms of broadband availability.

108. High bandwidth broadband services allow a wider range of communications applications such as high definition video conferencing, and this could have implications for the balance between office and home-based working and the need to travel. However, the provision of services with a peak bandwidth of at least 50Mbits/s will require the development of fibre optic cable networks, which is likely to be most viable in relatively high-density urban locations. Recent research on next generation broadband services suggests that this could result in the emergence of a persistent gap in terms of the level of service available in urban and rural areas. 61

HIGH BANDWIDTH BROADBAND SERVICES ALLOW A WIDER RANGE OF COMMUNICATIONS APPLICATIONS SUCH AS HIGH DEFINITION VIDEO CONFERENCING, AND THIS COULD HAVE IMPLICATIONS FOR THE BALANCE BETWEEN OFFICE AND HOME-BASED WORKING AND THE NEED TO TRAVEL

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