Infrastructure in Scotland is funded by user charges, regulatory regimes, private sector, UK Government and local authorities as well as central Scottish Government funds.
Our infrastructure investment programme is focussed on delivering good outcomes for the people of Scotland and in particular, transitioning to net zero emissions, driving inclusive economic growth and building resilient and sustainable places.
This page includes information on:
- the Infrastructure Investment Plan
- the Infrastructure Commission for Scotland
- the Infrastructure Investment Board
- the Scottish Futures Trust
- Stornoway Deep Water Terminal Grant Funding and Growth Accelerator
- NPD and PPP/PFI projects
- Tax incremental financing
- contacting us
Infrastructure Investment Plan
Our Infrastructure Investment Plan for Scotland 2021-2022 to 2025-2026 was published on 4 February 2021. It sets out a long term vision of infrastructure in Scotland, which supports an inclusive, net zero carbon economy and includes details on over £26 billion of major projects and large programmes.
Read more about our latest progress in carrying out this plan:
- major capital projects update: September 2022
- project pipeline update: September 2022
- programme pipeline update: September 2022
- progress report for 2021 to 2022
Read more about our previous updates in carrying out this plan.
The Infrastructure Investment Plan for Scotland 2021-2022 to 2025-2026 and the Capital Spending Review were published together, providing a strong and coherent framework for directing, analysing, shaping, and prioritising future commitments.
We published our draft Infrastructure Investment Plan for Scotland 2021-2022 to 2025-2026 on 24 September 2020. We consulted on the draft plan in order to ensure the right final approach that benefits all of Scotland’s people. The draft plan set out proposals on a new approach to infrastructure investment, building on recommendations from the Infrastructure Commission for Scotland. EKOS Ltd were commissioned by the Scottish Government to undertake an independent analysis of consultation responses. The majority of respondents were supportive of the proposals. Read the analysis report.
We published the previous infrastructure investment plan in December 2015. Read more about our progress in carrying out this plan.
Businesses can find information about public sector infrastructure projects at the following links:
- information on the hub initiative and supply chains
- contract opportunities in Scotland
- steel pipeline 2021: market opportunities for public sector projects
Infrastructure Commission for Scotland
To support delivery of the National Infrastructure Mission and development of our Infrastructure Investment Plan, Scottish Ministers established an independent Infrastructure Commission for Scotland. Read further information on the Commission’s work and its membership.
The Cabinet Secretary for Transport, Infrastructure and Connectivity responded to the Commission’s initial call for evidence, highlighting the work we are doing to develop strategic plans and priorities for the future, alongside our trade priorities and place-making policies.
The Infrastructure Commission for Scotland started work in 2019 and has reported its findings in two phases:
Phase 1: recommendations on the vision, ambition and strategic priorities for infrastructure were published in A Blueprint for Scotland in January 2020.
Phase 2: involved providing further advice on the delivery of infrastructure. This advice was published in Delivery Findings Report July 2020.
The draft Infrastructure Investment Plan for Scotland 2021-2022 to 2025-2026 sets out our long term vision of infrastructure supporting an inclusive, net zero carbon economy in Scotland. That vision is supported by three core themes of enabling the transition to net zero and environmental sustainability, boosting inclusive economic growth and building resilient and sustainable places. The 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. We are reviewing the Commission’s Phase 2 findings and will respond more fully on those in due course.
Infrastructure Investment Board
We established the Infrastructure Investment Board (IIB) in November 2010 to take an executive role in infrastructure governance, working alongside individual portfolio investment boards. IIB's objectives, as set out in the Infrastructure Investment Plan, are:
- delivering sustainable economic growth through increasing competitiveness and tackling inequality
- managing the transition to a more resource-efficient, lower-carbon economy
- supporting delivery of efficient and high-quality public services
- supporting employment and opportunity across Scotland
Scottish Futures Trust
We established the Scottish Futures Trust (SFT) in 2008 to help ensure better value for taxpayers' money in the delivery of vital public infrastructure projects. It is a limited company owned by Scottish Ministers, whose activities are overseen by a board appointed by Scottish Ministers.
The SFT aims to improve the efficiency and effectiveness of infrastructure investment in Scotland by working collaboratively with public bodies and industry.
Contact the SFT at firstname.lastname@example.org
Stornoway Deep Water Terminal Grant Funding and Growth Accelerator (March 2022)
The Scottish Government has provided, under section 126(1) of the Housing Grants, Construction and Regeneration Act 1996 grant funding of £1.835 million towards the construction of the Stornoway Deep Water Terminal. This is part of an overall investment package that will fund a programme of port infrastructure expansion which will transform the Stornoway port into a hub capable of supporting significant economic development for the Western Isles in a number of sectors.
- cruise traffic
- renewable energy (offshore wind and potentially hydrogen in future years)
- freight transport
Benefits also include skills training for a number of jobs to be created by the project as well as increased gross tonnage going through the port.
The capital investment is in addition to the Growth Accelerator mechanism that will be in place, covering a period of 25 years. The Growth Accelerator is a payment by results (also termed outcomes-based funding) model whereby the Scottish Government releases annual grant payments subject to performance against a series of pre-determined outcome targets. This model has been successfully utilised for other major infrastructure projects in Scotland. The outcome targets for the project include gross tonnage of activity at the new facility and training opportunities to enhance local skills in the sectors boosted by the port expansion.
NPD and PFI projects
We provide funding or part-funding for a number of Non-Profit Distributing (NPD) and Public Private Partnership/Private Finance Initiative (PPP/PFI) projects in Scotland.
The following links provide details of the actual/estimated annual unitary payment charges paid/to be paid by public sector procuring bodies in Scotland to private sector consortiums for services agreed over the length of the contracts.
- NPD/Hub programme – unitary payment charges
- NPD projects pre-November 2010 – unitary payment charges
- PPP/PFI projects – unitary payment charges
- expired PPP/PFI projects – unitary payment charges
Tax incremental financing
Tax Incremental Financing (TIF) is a means of funding public sector investment in infrastructure which is judged to be necessary for regeneration but which may be otherwise unaffordable to local authorities. The goal of TIF is to support and guide the limited public finance available towards assisting regeneration and helping to leverage additional private sector capital.
How TIF works
TIF uses future additional revenue gains from taxes to finance the borrowing required to fund public infrastructure improvements, which will in turn create those revenue gains. For example, when a public project such as a new road system is constructed within a specific area, it may increase the value of the land and encourage new property and business investment. The increased site value and investment generates increased tax revenues, called the 'tax increment', which will pay off the money borrowed to construct the road.
TIF in Scotland
We support a maximum of six pilot projects to test the applicability of TIF to Scottish circumstances, in which extra tax revenues would come from non-domestic rates only.
Any proposal for a TIF project must demonstrate that:
- the enabling infrastructure will unlock regeneration and sustainable economic growth
- it will generate additional (or incremental) public sector revenues (net of a displacement effect)
- it is capable of repaying, over an agreed timescale, the financing requirements of the enabling infrastructure from the incremental revenues
We have introduced secondary legislation, The Non-Domestic Rating Contributions (Scotland) Amendment Regulations 2010, under existing provisions in the Local Government Finance Act 1992 to enable TIF pilots projects to take place.
We have produced an executive note providing guidance on the amended regulations.
We have tasked the Scottish Futures Trust with developing appropriate criteria for potentially applying TIF in Scotland, and with working with local authorities in developing their proposals.
We are encouraging local authorities to propose their own TIF schemes, with the requirement that these are supported by a business case detailing the justification for using TIF. A project will only be able to progress to pilot status if its supporting business case sufficiently demonstrates that it will deliver value for money.
Further guidance is provided in our tax incremental financing factsheet.
Infrastructure and Investment Division
Directorate for Budget and Public Spending
Area 3D North