Infrastructure Strategy 2027-2037: consultation

Chapter 4 - Infrastructure Governance Principles

Effective governance is essential to delivering the outcomes of Scotland’s Infrastructure Strategy. It ensures that infrastructure programmes and projects are aligned to national priorities, managed efficiently, and deliver maximum public value. Robust governance frameworks, encompassing business case development, benefit mapping, and delivery capability assessments are critical to ensuring that infrastructure investments contribute meaningfully to economic growth, resilient places, environmental sustainability, and social wellbeing.

Given the scale of competing demands on limited public funding, prioritisation must be guided by a clear understanding of intended benefits and outcomes. This approach supports strategic decision making and ensures that resources are directed to where they will have the greatest impact.

Successful delivery also depends on strong procurement practices, contract management, and project oversight. These disciplines help ensure that infrastructure is delivered on time, within budget, and that the anticipated benefits are fully realised.

Key Activities in the Infrastructure Lifecycle

The infrastructure lifecycle, from establishing the need, securing funding, and delivering the asset, to managing, maintaining and ultimately disposing of it, defines the principles of good governance.

Source of graphic: SFT Corporate Plan 2025-2030^[10]

Investment Hierarchy

• Determine Future Need – Consider appropriate infrastructure provision in light of changes in service design, availability of digital platforms and technological innovation, and resilience in light of population and climate change forecasts.
• Maximise use of existing assets – Maximise use and the safe operation of existing assets to meet future need.
• Repurpose and Co-locate – Reconfigure or repurpose existing assets, giving preference to co-location or shared facilities where appropriate.
• Replace or new build – Consider suitability and sustainability of new build assets to meet future need.

Key activities within the life cycle include:

• Strategic Alignment: Set clear objectives within the policy area and develop an asset strategy in line with service delivery objectives and service demand/needs.
• Collaboration: Investigate opportunities to develop and share the asset with other public sector providers.
• Business Case Development: Consider whole-life cost and develop business cases, ensuring programmes and projects are fully aligned, justified and achievable and provide value for money.
• Funding and Deliverability: Investigate funding options and assess deliverability (project management and construction sector capacity).
• Procurement and Oversight: Implement effective procurement processes and maintain delivery oversight. Including contract management and handover arrangements.
• Evaluation and Learning: Capture lessons learned through post project evaluation to inform future planning and improve outcomes.
• Lifecycle Planning: Put in place a plan for operating, maintaining and disposing of infrastructure assets at end of life.

Addressing the Age and Condition of Scotland’s Asset Base

Scotland’s public infrastructure estate includes many assets that were built decades ago and are now approaching or beyond their intended lifespan. This ageing asset base presents significant challenges for reliability, safety, and cost, with maintenance backlogs increasing pressure on limited budgets.

All asset owners need to have in place asset strategies that take account of the condition and remaining life of existing assets to be able to determine whether to maintain, repurpose, or replace them within the context of the wider strategy for their asset base.

Prioritising renewal and adaptation, alongside service reform, is essential to ensure that infrastructure remains fit for purpose and aligned with modern delivery models. Embedding this consideration within the investment hierarchy reinforces presumption in favour of making best use of what we have before committing to new build solutions.

Strengthening Governance Through Impact Assessments

Impact assessments support planning and decision making and provide assurance that projects align with national priorities, protect communities and the environment, and promote equality and wellbeing. By analysing how different groups. communities, and ecosystems may be affected, impact assessments help identify unintended consequences, improve policy design, and support transparency and public trust. They also promote sustainable, long-term outcomes by embedding social, economic, and environmental considerations into decision-making from the outset and should form an important part of business case and asset strategy development.

For island communities, governance arrangements will incorporate the duties set out in the Islands (Scotland) Act 2018, including proportionate use of Island Communities Impact Assessments to inform options appraisal, benefits management and mitigation strategies.

Procurement and Social Value – Leveraging Investment for Wider Benefits

Procurement is a powerful enabler of infrastructure outcomes. By embedding community benefits and social value requirements into contracts, we can ensure that infrastructure investment delivers more than physical assets, it can create jobs, apprenticeships, support local supply chains, and promote fair work practices. Strategic procurement can also drive innovation, sustainability, and inclusive growth by prioritizing outcomes such as carbon reduction, skills development, and community wealth building. Strengthening procurement as an enabler will help unlock wider economic and social benefits from every pound spent.

Asset Strategies and Investment Hierarchy

The decision on whether to maintain, enhance, decommission or replace any particular asset across the public sector should be based on an area-specific, long-term portfolio asset strategy. This strategy considers the long term service demand and service delivery options, driven by the key trends and drivers set out in the ‘infrastructure challenge’ section as well as area-specific drivers and policy goals.

All areas of the Scottish Government have asset management plans in place or are developing asset strategies to underpin strategic planning and budget prioritisation. Given the continuing pressure on public finances, asset strategies across the whole of the public sector, need to consider where a consolidation of the estate is possible and desirable. There are a number of public assets that cannot be fully maintained with the current funding available and asset strategies are required to help set out a comprehensive position and potential approach to manage the challenges we are facing.

Investment Hierarchy

In 2020, the Infrastructure Commission for Scotland^[11] recommended that we make the most of existing assets and introduce a presumption in favour of enhancing, re-purposing, or maintaining existing infrastructure over developing options for new infrastructure. The Infrastructure Investment Plan 2021-2022 to 2025-2026 set out an infrastructure hierarchy that captured this recommendation, and it remains relevant for public bodies developing and executing their asset strategies.

NEW SCOTTISH GOVERNMENT INVESTMENT HIERARCHY

The image illustrates Scotland’s infrastructure planning framework. It shows how national, regional, and local levels interact to set priorities and coordinate investment. At the top, the Scottish Government provides the National Planning Framework, guiding national priorities and delivery. Regional partnerships align sectoral strategies and place-based priorities, while local collaborations identify community needs and projects.

The diagram emphasizes democratic input, transparency, and alignment across all levels.     

While the investment hierarchy has helped inform decision making, we believe it’s role can be strengthened. We will embed it more firmly in governance processes, making it a required part of business cases, asset strategies and funding decisions. We also invite views on how to make the hierarchy more relevant and actionable for decision makers across the public sector.

Questions

3. Do any elements of the infrastructure lifecycle need to be strengthened to promote more effective infrastructure planning and delivery?

4. In what areas could changes to governance or planning processes across the public sector improve the impact of the investment hierarchy?