Publication - Minutes

Convention of the Highlands and Islands minutes: May 2025

Published: 14 July 2025
Directorate: Business and Better Regulation Directorate
Date of meeting: 12 May 2025
Location: Strathpeffer Pavilion, Highland

Minutes from the meeting of the group on 12 May 2025.

Part of

Convention of the Highlands and Islands

Attendees and apologies

Kate Forbes, Deputy First Minister (Chair)
Richard Lochhead, Minister for Business and Employment
Cara Aitchison, Scottish Funding Council
Stuart Black, Highlands and Islands Enterprise
Malcolm Burr, Comhairle nan Eilean Siar
Raymond Bremner, The Highland Council
Derek Brown, The Highland Council
Sarah Compton-Bishop, NHS Highland
Adam Cochrane-Williams, Ofgem
Allison Carrington, Skills Development Scotland
Gary Campbell, Crofting Commission
Alistair Dodds, Highlands and Islands Enterprise
Fiona Davies, NHS Highland
Karen Greaves, Moray Council
Nick Halfhide, NatureScot
Stephen Hennigan, UK Government
Alan Hill, North Ayrshire Council
Craig Hatton, North Ayrshire Council
Vicky Hicks, BT
Martin Johnston, Highlands and Islands Enterprise
Kate Lackie, The Highland Council
Bill Lobban, The Highland Council
Jim Lynch, Argyll & Bute Council
Ealasaid MacDonald, Bord na Gaidhlig
Robbie McGhee, Scottish Government
Frank Mitchell, Skills Development Scotland
Emma Macdonald, Shetland Islands Council
Pippa Milne, Argyll & Bute Council
Eleanor Mackintosh, Cairngorms Park Authority
Euan McVicar, Crown Estate Scotland
Jake Macdonald, Scottish Government
Rod Mackenzie, Crofting Commission
Anne-Marie Martin, Scottish Government
Alastair MacColl, UHI
Hamish Macdonnell, Crown Estate Scotland
Daniel MacDougall, Scottish Government
Vicki Nairn, UHI
Sean Neil, Scottish Government
Ronan O’Hara, Crown Estate Scotland
Oliver Reid, Orkney Islands Council
John Risby, Scottish Forestry
Kathleen Robertson, Moray Council
Ranald Robertson, HITRANS
Maggie Sandison, Shetland Islands Council
Stephen Sheridan, UHI
David Speake, Energy UK
Paul F Steele, Comhairle nan Eilean Siar
Chris Taylor, VisitScotland
Martyn Taylor, Building Digital UK
Andrew Thin, Crofting Commission
Heather Woodbridge, Orkney Islands Council
Damien Yeates, Skills Development Scotland
Judith Young, Scottish Government

Items and actions

Agenda

10.30–10.40 Opening remarks
10.40–10.45 Review of previous actions
10.45–11.00 Formal approval of Terms of Reference
11.00–11.15 Convention to note written papers
11.15–13.15 DISCUSSION 1: RTO report
13.15–14.30 LUNCH
14.30–16.30 DISCUSSION 2: Digital
16.30-16.45 AoB, summary and close

Start of Transcript

Raymond Bremner

Madainn mhath dhuibh uile agus fàilte gu Srath Pheofhair anns a’ Ghàidhealtachd. Tha sinn uabhasach toilichte a bhith an seo agus tha mi toilichte gu bheil sibh uile ann an seo còmhla rinn an-diugh airson na coinneimh againn.

[Good morning everyone and welcome to Strathpeffer in the Highlands. We are very happy to be here and I am happy that you are all here with us today for our meeting.]

Good morning and welcome to you all. It's lovely to host you here in the Highlands, in the wonderful, beautiful Highlands of Scotland. I know many of you have already commented on the venue and the place that we are in Strathpeffer here and also on the fact that we ordered some wonderful, beautiful sunshine. It was forecast for rain last night. It didn't happen. As far as I know, we are going to have a lovely day for the rest of the day.

Can I start by giving you a very warm welcome to you all? I'm delighted that this meeting of the Convention of the Highlands and Islands is taking place in Strathpeffer. Strathpeffer takes its name from the nearby River Peffery. From the mid-1800s, Strathpeffer began to attract visitors as a spa resort with its architecture being described as resembling somewhere in Bavaria. For those of you who have been there, you may probably be able to recognise the architectural style. In 1881, this pavilion here was open to provide a variety of types of entertainment and this continues into the present with a full calendar of events. One of the last times I was here was actually Dingwall Gaelic Choir's 50th anniversary. Kate, you might remember back then.

I'm delighted to have the Deputy First Minister and Cabinet Secretary for Economy and Gaelic chairing this meeting of the convention and also to have the Minister for Business here today when he turns up. I'm grateful to the Scottish Government for their continued commitment to the Convention of the Highlands and Islands. It was set up 20 years ago and I would argue it's still as relevant today as it was back then.

Today's agenda is focusing on the RTO. The regional transformation opportunities in digital are of huge importance to our communities. Indeed, I don't think I have seen a report at any previous meeting of the convention which highlights the sheer scale of potential investment opportunities for the Highlands and Islands that this RTO paper sets out. To fully realise these opportunities will require us all to adopt a collaborative approach. This is not a new idea. In Highland, we have a very good track record of working collaboratively with partners. For example, the development of the City Region Deal which this year will see Inverness Castle open as an iconic city centre visitor attraction. Or through establishing the Inverness and Cromarty Green Freeport. It's not the first time you'll have heard me talk about that at CoHI. The collaborative approach at CoHI, HIREP and between public and private sectors will help put us in the best place possible to fully realise and exploit these opportunities for the benefits of the communities right across our Highlands and Islands.

I believe there is real generational opportunity for the Highlands and Islands to become the powerhouse of the renewable energy economy in Scotland that is at the very heart of providing future energy security and energy resilience for the whole country. These strategic investment opportunities will have the potential to shape the economy of the Highlands and Islands as well as making a very tangible contribution to the economic growth of the country.

However, to fully realise these opportunities, there is a real need to ensure that we have the necessary enablers and supporting infrastructure in place so that we are able to fully exploit these huge economic opportunities for the benefits of the Highlands and Islands. It's not the first time that we have addressed that at CoHI as well and made representation in other forums. These enablers are highlighted in the report and include service provision, transport infrastructure, grid capacity and connection, ports, planning and digital. I look forward to this morning's discussion around how, working collaboratively, we can work at delivering these.

Housing across all tenures - now there's a thing. Sean Neill, they've put him right down at the bottom of the table today, because the last time that we were at CoHI, he was put next to me and I nipped his ear all day. Now look, he's specially arranged for this. He's landed up down at the bottom where I can't nip his ear or so he thinks. But housing across all tenures is absolutely crucial to strengthening and sustaining our population, addressing inequality and supporting the delivery of economic growth across our area. If we do not have homes for people, then our ability to fully realise and exploit these economic opportunities for our region will stall. This is why in Highland we declared a housing challenge to bring partners together to focus collective effort to accelerate housing provision. I'm pleased that the HIREP housing subgroup are also looking at opportunities to accelerate housing growth across the region.

Spotlight paper highlights some of the opportunities and challenges being faced over housing, such as investment, availability of land and capacity. The paper also highlights a number of areas which, if addressed, would enable the acceleration of the delivery of housing development across the Highlands and Islands. I look forward to discussing these this morning and coming away with a plan for action.

The other spotlight paper that we'll consider this morning is about skills. If our communities are truly to benefit from these RTOs, then we need to ensure that we have the opportunity to gain the skills needed for the future. We need to ensure we bridge skills gaps and retain and attract talent to the Highlands and Islands to create a future-ready workforce for these future opportunities. I again look forward to the discussion on how we can deliver a step change in approach so we can deliver for the future. It's nice to see Frank here as well, as usual. I'm looking forward to the contributions on that.

All of these enablers, when combined with the RTOs, can give us the opportunity to address a key issue of concern across the Highlands and Islands, which is depopulation. We've talked about that many times. We really do have a once-in-a-generational opportunity to reset the economy of the Highlands and Islands to ensure we have sustainable and growing communities.

Later this afternoon, we will discuss digital. I'm pleased that considerable progress over the past few years has been made to ensure communities have access to fast, reliable broadband and mobile services. In these days, we really need to think of digital access as an essential utility, like electricity and water. That's why I'm very keen to ensure that none of our communities across the Highlands and Islands are disadvantaged due to a lack of such access, and keen to hear the timeline to ensure that everyone in the Highlands and Islands can play their part in the digital economy.

I have concerns over the switch-off of the Public Switched Telephone Network as well as the Radio Teleswitch Service and the potential impact this may have, particularly the vulnerable in our communities, so I look forward to discussing how we can encourage those who are responsible for managing this transition to do so fully aware of the need of our communities.

I very much look forward to today's discussions at the Convention of Highlands and Islands. We consider all the important issues that are in our papers today and see how we can make a real difference for the future of our communities across the Highlands and Islands.

Mòran taing dhuibh uile agus sin thu fhèin a Cheit.

[Many thanks to you all and over to you Kate.]

Kate Forbes

Madainn mhath. Good morning.

It's good to see you all. I don't think that's on, is it? Oh, there we go. Good morning. Good to see you all. I'm absolutely delighted to welcome you, not least because it's about five minutes away from home. That never happens, as you know, when you're a Highland or an Island representative. So my commiserations to everybody else who did have to travel, but it was very nice not to have to go too far. Thank you so much to Highland Council for their warm welcome. I think this is the first Convention of the Highlands and Islands that I can recall where the morning beverages include a single malt scotch whisky. I assume that's to slip into your coffee to get through today. Welcome to Mr Lochhead too.

So this morning's agenda is hugely exciting. We have in the last couple of weeks really since the last Convention of the Highlands and Islands, I feel, made enormous progress on identifying the biggest opportunities for the Highlands and islands. At the last convention, we talked about bringing together all the investment opportunities across the Highlands and Islands. It's brilliant to see an action agreed, an action delivered. I look forward to us building on that progress, having identified the biggest regional transformation opportunities to then secure the funding and the progress on those opportunities. In-between conventions, I know that different bodies around the table have been very busy ensuring that we can put the right infrastructure in place to make the most of this. I know, for example, there has been a workforce and skills planning event in the Highlands. I know that some of our island colleagues have been making progress on transport and so on. So trying to get the different building blocks in place to then capitalise on those opportunities.

I was struck this morning when doing a radio interview on Good Morning Scotland about these opportunities. The comment was made that, well, we've been here before. We've talked about opportunities before. But nobody can argue, we've never seen anything of this magnitude before or this scale or this possibility before. It's really very exciting.

So we'll go through as the Leader of Highland Council set out. We'll go through a number of different reports. Obviously, I'm always keen that when going through these reports we're thinking about what the action is and we're thinking about who owns that action and how we measure the progress along that action. I think that's what we're seeing in today's agenda, having discussed things, making progress and we want to then keep moving that forward.

Before we get into the substance of the agenda, a few housekeeping details to pass on. You will remember that the convention is being livestreamed and recorded to transcribe, so that means that if you want to speak, please put your mic on. If you want to mutter under your breath, please switch it off, because that will be part of the transcription. If you are on X or on any form of social media, you can post from the convention hashtag which is #SpringCoHI2025, which may be more appropriate to say SummerCoHI2025. Lunch is going to be served in the same area as tea and coffee was provided this morning. There is no fire alarm planned for today, so if the alarm does go off, please leave quickly and move to the nearest fire assembly point. So thank you very much and I think we will get started with the first agenda item, bang on time.

Our first point of action was to invite you to note updates to the outcomes from previous conventions in paper 1. I won't go into detail, because you'll have the papers in front of you. So I'll just pause to see if anybody has any comments. As always, if you want to speak, just put your hand up and catch my attention. [Pause] No? In which case, we'll move swiftly on, but if anything does come to mind following the meeting, then please let the secretariat team know.

Okay, in which case, subject to the point around the two political representatives, can I check whether we have agreement, formal agreement, formal approval, of the terms of reference? [Pause] Yeah, great, in which case, thank you, we will note that down.

Okay, so I think you all heard the actions there. So I won't summarise anything further, but I can confirm that the terms of reference have been agreed.

Okay, I'll move us on to the written papers now. As Raymond said, there are quite a few written updates relating to actions arising from the convention in October. So we first have an update from the Regional Economic Partnership. Great to see publication of the hugely significant Regional Economic Strategy, setting clear aims and objectives. I think you'll all join me in welcoming the strategy and acknowledging the collaborative work and effort that's gone into it. As always, the value of bringing this to CoHI is to look at where we can drive collaboration across all the different actions. Paper 4 is an update from HITRANS on Health and Transport Action Plan for the region and it outlines the recommendations of their scoping review and their intentions to engage further with local authorities and health boards. We then have an update on the transformation of digital public services.

Finally, paper 6 is a report on childcare in rural and island communities, produced by Highlands and Islands Enterprise. That report builds on the important discussions that have already taken place amongst partners around this table and beyond. Childcare, needless to say, is absolutely vital to rural and island communities and economies, so thanks to HIE for their leadership on that. The Scottish Government and my ministerial colleagues I hope will consider the report's findings carefully and discuss that further with HIE and others in due course.

So can I open up to the room for comments on these papers? Yeah.

Kathleen Robertson

I'm sure somebody will go first the next time. Basically on the transport paper, just a couple of things really. Again it's probably linking into what Sarah Compton-Bishop was saying about a role of the community planning partnerships, because again with the transport stuff, all the partners are around the table. So I think there could be a role there for community planning, because it's just another level, because you're going to have - we've already got one in Grampian, then you're going to then have a Highland one. Certainly for us, servicing to the transport groups would be quite difficult, so just wondering if - are we creating something that we don't necessarily need, would be one comment.

On the childcare paper, I think it's disappointing that Moray isn't represented for a pilot, because we have the Strathspey valley where there's a real need for childcare. I'm just wondering if there'd be an opportunity for us to be involved in that, considering that we led some of the discussions in the subgroup.

I'll let others come in. I may come back with more.

Kate Forbes

Thanks. Does anybody from HITRANS want to talk about - yeah, Ranald.

Ranald Robertson

Yeah. [Inaudible]. I do, yeah. Yeah, on Kathleen's point about avoiding duplication around having a second HTAP, with Moray having that split, I think we could certainly get around that by sitting the NHS Grampian part of our area outside of that HTAP so that you don't have to be part of two so that the NHS Grampian HTAP would exclude Moray. We would focus on the other health board areas that don't already enjoy the opportunity to have a Health and Transport Action Plan that supports their area. Very happy to consider ways of broadening that and perhaps feeding back, I think, from that work.

Huge thanks to the REP for producing the informative report. It definitely sets out the scale and the significance of the opportunities. I have often said, quoting other people that have been in this business for longer than I have, that the Highlands and Islands has always made greatest progress through key economic interventions. It fills our schools, it secures the funding for our infrastructure, it delivers the houses and so on. We have got a story to tell, which is remarkable and, to my mind, outstrips anything that the rest of the UK or the rest of Scotland can talk about.

What I was exercised about at our last convention was that whilst Shetland could talk about phenomenal opportunities and Orkney could talk about phenomenal opportunities and Highland could talk about phenomenal opportunities, how much greater is the opportunity on a global scale if we talk about it collectively? That is not in any way to dismiss the local opportunities, but this really puts us on the map, talking about £100 billion worth of opportunities. Obviously, we're not starting from scratch either. There's already a great deal of excellent work underway, a lot of excitement. I had the privilege of joining Highland Council as they pitched to investors around some of the opportunities in housing. Without embarrassing them, a couple of the investors who had popped up from London said that they never had such a credible and commercial pitch from a local authority as they'd heard from Highland Council in that pitch. I'm sure that the same could be said for any of our Highlands and Islands local authorities.

So that kind of feedback is remarkable. It's where, I think, we want to be. Then obviously our enterprise agencies are playing a vital role in coordinating, working collaboratively, strengthening local supply chains. We've got colleagues in energy policy as well, actively engaging with developers.

My last point to make is that in looking at this pipeline we have to understand and recognise what the enablers are from skills, public services and so on. But we also have to understand very clearly what kind of legacy we want from any of this, because it could just be that we celebrate £100 billion worth of delivery, of investment opportunities having been delivered. What I want to see is this being the means of reversing decline [and depopulation], of the means of delivering more affordable housing, of better well-paid secured jobs, of childcare provision improving dramatically. So I think we have a privileged seat at this table to not only look at what role we play in enabling but what role we play in securing legacy for our people.

Sarah started at the beginning when we were talking about terms of reference and talking about those who are not here and community planning partnerships and what communities want and think, and I'm very conscious that we represent them in trying to secure legacy. So I'm very keen to hear from everyone around the table on those two questions, what your role is enabling or what you want to see others do in terms of enabling and what your role is in terms of securing legacy or what you want to see others do in terms of securing legacy. So inputs and outputs.

I will now pass over to Martin Johnston - thank you - Director of Strategy and Regional Economy at HIE, to give us an overview of the report. Martin will present for about 20 minutes and then really delighted to move on to Frank to present on the overview of skills in the context of the RTO report. Then we'll open it up to - oh, no, then, sorry, I will then move on to a brief discussion before moving on to Derek Brown. Great. Thanks. Over to you, Martin.

Martin Johnston

Thank you, Deputy First Minister. Good morning, ladies and gentlemen. I'm going to be ably assisted in the slides with Laura.

So I'll start off with some good news. Firstly, I'm not going to take 20 minutes to present at you, so that gives more time for the more substantive agenda items that follow. I also recognise that given the collaborative and iterative nature of this, quite a few colleagues around the table will have heard me speak on this before and seen the slides. However, not everyone has, so [your forbearance]. So really, very quickly, very simply, three things I'm going to take us through. So what it is, what does it tell us, and what are we going to do with it? So the next slide, please, Laura. Thank you.

So as colleagues look at the screen, I tend to quote the parable of the three blind men, which is to say that across government, across HIE, across local authorities and across others, all of us could describe a piece of the picture that we were looking at, but we didn't have an aggregate view of, well, we knew it was big but what does big look like? So through the Regional Economic Partnership, we undertook to do a piece of research to identify, well, what are we looking at and what might we need to do? Building on work that was done at the Convention of the Highlands and Islands a few years ago, we identified key sectors to focus in and those that were felt to have the greatest transformation opportunities. So this is not an exercise in everything, nor indeed, given the nature of it, is an exercise in exactitude. It intends to give us a scale of order of magnitude. Next slide, please, and the next one, please.

So what does the research tell us? Well, the researchers did some desk research. The researchers, from information that collectively we'd passed to them, went and spoke to project owners and identified 251 projects around the region. If all of those come to pass, then that will mean the private sector is investing in the regions of £100 billion of capital over the next 15 years around the Highlands and Islands of Scotland. That will add something like 77 billion of gross value added to Scotland's economy, to the UK economy. During the development, the construction and implementation - that's what DCI stands for, the bottom left - that's something like 114,000...

Martin Johnston

So during the development, the construction and implementation phase, something like 114,000 job years. So job year is one person works full time for one year. That's a job year. Once we get into the sort of steady state, the operation and maintenance of these projects, something like 18,000 new full-time equivalent jobs being added to the economy of Scotland, to the economy of this region.

That map on the right, there aren't 250 dots on there. Not all of the projects are in the public domain. Plus it would get a very busy slide when we did that. But you can start to see the spread of the projects around the region. Next slide, please.

This slide basically is in two halves and they each tell us the same thing. So in decreasing order on the table on the left, you can see which sectors are providing the greatest investment around the region. That is reflected in the pie chart on the right. So we can see the vast bulk of the investment is coming from green energy, from renewable energy and enabling infrastructure. You can see, as it decreases, the other contributions being made. Next slide, please.

Starting now to turn towards place, the map on the right is the one we saw before and the red lines are a degree of arbitrariness in terms of where do we see clusters starting to emerge? Some of those are obvious, around the islands, and then others are, as I said, more subjective. But we can start to see the place-based impact of these projects. The bar charts on the left break down, by local authority and by - so our population [against] local authority, just to give us a feel for what this looks like in terms of local authority and scale of population. Next slide, please.

Just to guide your eye on this slide, across from left to right is the things I've been speaking about in terms of the job years, in terms of the GVA, in terms of the full-time equivalents. The top line is, if everything comes to pass, what does that look like? That's a reflection of the previous slides.

Now we know not everything is going to go to plan. Not all of these projects are at the final investment decision. They're at different stages. We've seen - just in this last week, saw two announcements of bumps on the road. One of them is not in our area, but it's illustrative. That was the Hornsea 4 development of England, a very large offshore wind farm which has been paused by its developers. One closer to home is Drax's development of Cruachan 2 where again they've paused. That reflects what we know, that these are large capital investments. They are often being delivered by multinational companies. They face global investment decisions. Those global investment decisions are impacted by exchange rates, the supply and cost of capital as well as things in terms of this region that they need to look at, such as workforce, skills, enabling infrastructure.

So the report looks at different scenarios. The scenarios are illustrative to help those of us in a policy position to think through what we need to think through.

I'm not going to go through them by detail, but it is worthwhile looking at scenario 1 which is the top one in the red box at the bottom. So in talking to the developers, I'm minded that most of the investment was coming from green energy. Two key things, two very related key things came forward from those, (1) was about the electricity grid and (2) was around the policy and regulation to do with the electricity grid. Now since the report was done, we've seen the announcement from Scottish and Southern Electricity Transmission that their board has taken the decision to invest up to 22 billion capital in developing the grid, so that physical infrastructure is underway. Industry, Scottish Government are lobbying hard with the UK Government around the policy and regulation of the wholesale electricity market, so there's a lot of work being done there to minimise the risk to the decision makers around about that. So that's worthwhile, highlighting just that scenario 1.

So where we think we're at is that second scenario that's on the slide that the consultants have very snappily titled, Status-adjusted. So that's just kind of taking a look at what we're facing here. To help bring that to life, that says that we think that there's something like 70 billion of capital is the realistic figure, we think, not to dismiss the 100 billion. That is the size of the opportunity based on what the project owners want to see them deliver.

Over a 15-year period between 1965 and 1980 - so the same period, different time but same period as this research - the oil and gas sector when they were investing in the UK Continental Shelf, so between '65 and '80, that figure was around about 78 billion in current figures. So we think that we're in the ballpark of what was happening over that period. Many will remember, or be aware of, that that was very much a boom time for Scotland's economy and the UK economy. Circumstances are different, it doesn't directly equate, but that is the sort of socioeconomic opportunity that we're looking at. Next slide, please.

So looking at that sort of status-adjusted, then there's two maps. The one on the left says, well, what at a ward level will be the employment implications during the development, the construction, implementation phase? The map on the right, similar point, but once it's settled down becomes steady state. The slide on the screen appears very blue. It's more nuanced in the report. But also to say that is at the ward level, so there will be clusters of population growth, of workforce growth around the region. Later on in the presentation, we've got a deeper dive on workforce and skills from Skills Development Scotland. Next slide, please.

So I guess one of the big opportunities here is a repopulation of the Highlands and Islands based on new, good-quality, sustainable jobs being created. Two sides of the same coin on that one. One, how will we develop the workforce and how will we give them the skills? Secondly, where will they live? So the report also looked at available data and had discussions with local authorities and Scottish Government in terms of, well, what is the anticipated supply of housing over the next 10 to 15 years? We mapped that against where we think the jobs are going to be created, where people are going to live. So this is an estimate. Again it's not an accurate detail, but it gives us a scale of order of magnitude of additional housing that this region is going to need from the private sector all the way through to social housing there. You can see there the sort of scale of housing that we're looking at based on those predictions. Again we've got a deeper dive on housing after this. Next slide, please.

So second to last slide from me. So none of this is guaranteed. A lot of work across local authorities, Scottish Government, HIE, SDS and others. This is about working with the private sector, the project owners and the supply chain to understand what are their needs and wants and how do we make that happen? Across the Regional Economic Partnership, across CoHI, across the Scottish Government and I think some aspects of this with the UK Government, then there's work to be done looking at the barriers and enablers. Over the same period, the Regional Economic Partnership developed its strategy that was approved for the final time by the board last month. That sets out the key priorities for the region. It's no surprise that it picks up things like childcare, skills and workforce, housing, transport. We know that these are the things that we have to get right. These are the things that we have a hand in in terms of developing. If we get it right, they're enablers. If we don't get them right, they're barriers to the development.

What we're trying to do is work with the project owners, the companies, the businesses looking to invest, but also where they're borrowing the money from. So we know that we have to demonstrate to them that this region in Scotland is open for business. What does that mean? It means that we understand business, we understand what drives their investment decisions, whether they're the project owner or the people providing them the capital. So we have to demonstrate to them that we can deliver a workforce, we can skill a workforce, we can house a workforce, we can develop the supply chain and we've got the enabling infrastructure that they can invest and be as guaranteed as you ever can they'll get the return that they're looking for on their investment.

Also it's very much about working with communities. Not everyone is going to welcome this change. We have a story there to get out and we have to listen to those that have got objections. Also very much - it came up earlier on - it's about legacy. It's about, how do we get community benefit? How do we get that social charter from these large-scale developments that we can demonstrate, both to ourselves and to our communities, that there is long-term socio benefit over and above the jobs being created and the wealth being created.

So this is all about us working together. That's partly why - well, largely why we're here at the Convention of Highlands and Islands today. It comes from the Regional Economic Partnership. I'm really pleased to report we had a very positive meeting with the Scottish Government. I'm 33 years in economic development in Scotland. It's one of the few times, indeed the only time, I can think where we had Director Generals from different portfolios of government with the Directors, with other colleagues, hear a similar presentation to this, hear from the Regional Economic Partnership, and agree to work with us in a collaborative way, because again we need that sort of aggregate picture laid out. We need everyone to know their role in that. We want people not to work in their silos but to work with us at the regional and at the national level.

We very much intend to use the HIREP strategy and its structure. We're not looking to reinvent the wheel. We're not looking for any more meetings than we need to have. This is about planning at the regional level, but recognise these projects sit in place, so we'll have to deliver locally. We intend to use hopefully CoHI, hopefully to bring good news where things are working positively. But if there are certain things we need a roundtable discussion on because they're that important, then we think CoHI is the place to bring these things. Next and last slide, please.

So in conclusion, I think there's a huge socioeconomic opportunity for Scotland, for this region. It's not new. As I said, I’m 33 years of working in economic development. I know colleagues that have been working for at least 20 years across HIE, Scottish Enterprise, Scottish Government, local authorities to realise this opportunity, particularly from green energy. Collaboration is absolutely key, but we start from a good place. This comes from the Regional Economic Partnership, we're here today at the Convention of Highlands and Islands, and we know we've got the attention and the interest of colleagues at Scottish Government. So that ends from me. Thank you.

Kate Forbes

Thanks very much. I shall move swiftly on to Frank, please.

Frank Mitchell

Thank you. So obviously this complements what Martin's already been through and it will also be really important for the conversation Derek's going to have. We started from a...

Normally I try to hide my Glasgow accent when I'm up here. So the concept behind this was we had the last discussion at CoHI to really think about what do we need to do to focus on maximising the economic opportunity that's coming down our way but, in doing that, ensuring a lasting legacy for the Highlands and Islands. That's the background to this. We've already heard the £100 billion worth of investment over the next 10, 15 years.

We had a summit with the Highland Council, with HIE and with UHI, and the SFC were present as well, at the beginning of April in Inverness. We had done work running up to it with 50 employers, but on the day, we had 70 employers there present. Actually more wanted to arrive. We just ran out of room. There was a huge appetite for coming along to this to hear, so the challenge that we're all wanting to face into.

I would think there was a couple of clear messages coming through. One was, across the business community, the business as usual won't work. The businesses need to collaborate together but also work closer with the public sector to how they're going to face into those challenges to both maximise economic opportunity but also ensure those lasting legacies are there. So there's real willingness by the business community to co-invest and work with the public sector how to do that. Now down the lines and as we work through this, it's very clear that companies want to look at regional skill academies and working with the public sector to create those opportunities, but where we are just now with some real focus about how do we make sure we retain working-age people in the area and attract working-age people into the area?

We had a mandate asked of us - and we'll go back to the people who were at that summit and can let them know how it goes today - to see whether we had response today that supports this. So that was about testing the concept, agreeing in principle with the employers, but also well aware that we're focused on the Highland region just now, but we were going to want to, on the back of this, roll it out to other council regions over the course of the next few months. That means working with all their employers as well in run up to those similar summits.

So the ask coming out of that, the summit, were investing in our schools and communities to promote area attractiveness, highlight the scale of future opportunities in the region and routes to employment through work-based learning pathways including foundation apprenticeships; investing to develop our workforce, providing industry informed and focused training to address specific technical skills, and promptly in utilising technology to enhance skills delivery; attracting working-age families to the region; promoting regional opportunities with, in and outwith the region to retain and attract the working-age population in line with job creation in both opportunity sectors and wider enabling sectors, and doing that by also expanding technical and vocational learning, committing to greater levels of industry-intensive technical and vocational provision, including apprenticeships, and having that through UHI by additional, more flexible credit funding to expand provision for training and upskilling.

Interestingly there was discussion around the visas that were going, how do we attract people from other countries? But of course, the news this morning means that's going to be even tougher. But actually it brings us back to the importance of doing the other things well to make sure we retain and attract who we can into the areas. Of course, the need for support for cross-government prioritisation of the housing challenge we face that Derek will talk about.

The other bit I think that's worth just discussing, before I pass out to colleagues who did this with us for their comments on it, was [unclear] £100 billion over the next kind of 15 years in the Highlands and Islands. The work we've done suggests there's a £200 billion to £240 billion investment across Scotland at the same time, so there's a huge competition for talent going to happen across Scotland over the next 10 or 15 years. It's really important the Highlands and Islands - and I do think there's an advantage here because of the background of collaboration that already exists up here. They can get a march on others in getting forward and meeting that challenge.

So Bill Lobban was kind enough to open it up for us, so [unclear] Bill wanted to make a couple of comments. He was there for the day. Then I'll maybe ask Alistair Dodds and Alastair MacColl to make a couple of comments as well, if you don't mind.

Kate Forbes

[Unclear].

Alistair Dodds

Kate Forbes

Okay. I think we will come on to discussion in a moment. I think listening to the presentation itself and the need to coordinate demand, it strikes me that maybe your work's not finished quite yet then, because then the next iteration is delivering on the actions. I think the point around Highlands and Islands Enterprise, Skills Development Scotland and the university and colleges coordinating to take this on to the next stage of - we know that there is huge demand. There's obviously a lot of anecdotal feedback about the skills challenges and particular skills shortages, but it is quantifying what that actually is and what short-term quick interventions would make the biggest difference and then what longer-term reform is required. That needs to be on a genuinely regional basis right across the Highlands and Islands, understanding that there is competition from the rest of Scotland and the wider UK. Some interventions that have worked really well elsewhere could be replicated quite easily, and I think that that is a significant piece of work.

I had been minded to then go on to housing in order to then have a general conversation about everything, but I think I am going to open it up for comments on the skills. The questions here are, if all that is true as it is, (1) how does this group coordinate demand? (2) How does this group identify demand, including bringing in others that won't actually be here? (3) What are the quickest interventions that we can take? Not in terms of the generic more funding or this, more courses, well, that's fine. If you take all of those points as read, what are the most immediate interventions that we can take? Not least because some of the private sector organisations are themselves setting up quick fixes to upskill and reskill. So I think those are my three questions specifically on skills, and I will open up.

Cara Aitchison

Are you sure [unclear]?

Kate Forbes

Yeah. Please, come in.

Cara Aitchison

Thank you, Chair. Cara Aitchison, the Interim Co-Chair of the Scottish Funding Council. I really welcome Frank's report and the comments that have been made subsequently and want to give the commitment of the Scottish Funding Council to working in partnership with Skills Development Scotland with the convention and all of the partner bodies here to make this a reality. It strikes me that we have an opportunity over the next few months. With the new legislation, Tertiary Education and Training Bill, that will be going through, it would be worth some of us, I think, outside of this room having some further conversations on the ways in which we might want to input into the final shape of that legislation just to make sure that it works for everyone that's represented here. I'll give my undertaking that I'll liaise with Frank to make sure that happens. Thank you.

Vicki Nairn

Sorry, I had to give the microphone a bit of a thump there. Thank you. Vicki Nairn, Principal and Vice-Chancellor at UHI. I think I really welcome the work that's been done. Obviously, we've been involved in working with Frank and his team. I think for me there's a sense of urgency around this. We've been talking about these economic development opportunities for a couple of years now. There is lots of good work going on. But we have to find a way to turbocharge this work because, as Councillor Lobban was saying, these are our future for our young people. Actually we're losing them all the time to the Central Belt, to cities.

So in terms of how we take that forward, we're actively working with the SFC and very much welcome Cara's support in that in terms of flexibility around funding streams between further education, apprenticeships and higher education. That's really important for us, because the ability to adapt and flex our funding around where it's needed most - so we estimate we have about 20 per cent of unmet demand on further education, which links directly to the skills pipeline. That's what companies who are coming into the region want to see. They want that assurance that actually they can get the skills they need when they need them, both at FE level and at HE level.

So for us, I'm really keen to understand how we can really speed this up and move that forward. So I think the work that Frank and the team have led is a really excellent start, but I'm really keen to have a discussion about how we turn that into actions with very clear deliverables.

The other thing that would really help, although I realise it's probably a bit more tricky, is to help us plan that and to help us link into the workforce planning that the private sector needs. Any longer-term budgeting that we can move to, in terms of annual grants and allocations, again would be very much appreciated, because at the moment, we go from year to year. It's really tricky when you're trying to put together a long-term plan for education and research in the area when you don't quite know what your allocations are going to be. So again talking about things that would make a difference, that would be a huge difference for us and I know other public sector agencies might feel the same. Thank you.

Kate Forbes

Thanks very much. So I wrote down two comments that you made. How do we speed this up and how do we find a way? That's the exam question for this session. How do we speed this up and how do we find a way? I'm not suggesting that we're going to necessarily hit on the key and core actions to take in this meeting. But I do think that this is the next big focus for the next Convention of the Highlands and Islands, a really robust, credible plan that answers the question of how do we speed this up and how do we find a way? What are the things that we actually control and what do we not control? So I don't think there's any conversation about any action in any realm of the public sector that doesn't ask for multi-year budgeting. Not within our gift, sadly. So things like that are interesting to discuss, but they aren't going to deliver the quick results that we want. So how do we speed this up, how do we find a way, that is the exam question to take away.

I'm going to come to Nick and then I'm coming over here.

Nick Halfhide

Yeah. Good morning. Thank you very much. Nick Halfhide, CEO of NatureScot.

We talked about obviously skills and we've talked about infrastructure. I just wanted to pause for a moment on the role of investment in natural infrastructure to secure and support, ensure as it were, a lot of this built and human infrastructure that we've talked about. Particularly obviously looking forward, we're looking over a long timescale, so we're looking at climate adaptation and how we can use nature to support these really exciting investments. Just to offer, we've done some work on the necessary kind of volume and types of skills needed for this natural infrastructure, so delighted to be able to contribute that towards the joint effort. Thank you.

Kate Forbes

Thanks. Yeah. Damien.

Damien Yeates

Thanks, DFM. Just to make a couple of points, the scale of the new investment is substantial, but in talking to all of the local authorities, replacement demand is going to be very significant as well. So we're looking at well over 90,000 jobs out to 2034 in terms of replacement demand. So this matters for all employers, because there'll be pressure across every employer to recruit talent in if everybody's not contributing.

I guess that's the second point. I'm very, very helpful that co-investment from the private sector could be a real lever in the plan going forward. I think as you suggested, DFM, in the beginning, we don't all see the same picture. I think what the summit translated for the private sector, and even companies of the scale of SSE Transmission and Distribution, is the scale of this investment is like nothing we've seen before. They need to collaborate. Rather than steal and compete, they've got to put fish in the pond and they've got to co-invest. I think the challenge for us partners in the public sector is leveraging more from the private sector to co-invest so that we're all contributing to the expansion of the workforce in the region.

Kate Forbes

Alastair.

Alastair MacColl

You asked for short-term solutions, DFM. I think one would be to immediately meet that unmet demand and to fund that. Money aside, that's a quick fix. The other one is just picking up on Damien's comments there. Developing and agreement these co-investment agreements is quite a specialised process and requires specialised skills. I think it would be really helpful if we could find a way to put in place - I don't know - three or four people with those skills, brought in specifically to develop co-investment agreements and base them at one of the organisations - it might be UHI - around the table to get that process moving. So short-term things that are within our gift and we can do relatively quickly with a significant impact.

Kate Forbes

Thanks very much. My view is that the scale of the demand right now calls for creative, unusual - I've got some other synonyms of that word, you get my impression - solutions here of - and we have done that elsewhere. This is not a question of waiting for reforms. This is a question of, in the next year, what levers do we have to pull? There will be a lot of school leavers leaving school in the next month. How many of them are going to go straight into the workforce and can we attract them into the workforce and so on? Frank, you look like you want to come in.

Frank Mitchell

Interestingly I think that the summit was really to see - well, I had a number of companies talk to me beforehand about co-investment to see how wide an appetite was there out there in the private sector. It was huge, because they realise again it can't be business as usual. They've got to do something different. They can't just be in this on their own, even big companies. We've heard from SSE. But what was interesting for me, SSE were saying for each apprentice they put up for an ability to get an apprenticeship, they get between 70 and 80 applications for each apprenticeship. Then there was a smaller company in Inverness who say, we're getting between 15 and 20 applications for each apprenticeship. So there's a huge appetite for young people in the Highlands and Islands to do this work, do the apprenticeships.

Thanks. Hello, everyone. I have just returned from Japan and China from trade missions. I know the Deputy First Minister was at UAE. In terms of this debate, I think it's really intriguing, because a lot of the companies we're speaking to who want to invest and are planning on investing in Highlands and Islands, particularly in the energy sector but not just the energy sector, are clearly looking for people to employ. I spend a lot of time trying to get my head around, they seem quite confident at times they're going to get the people, but at the same time, we have these debates back in Scotland about what are the skills needs, what are the demands? I think linking up to employers, which some people mentioned, is so crucial here. A lot of the companies talk about having their own academies, their own training programmes and doing everything themselves, but yet we're speaking about what the public sector can do to supply the skills and the people. So I think matching that up is just really important.

The final point I was just going to make was about perception in terms of young people leaving school in the Highlands and Islands and what their perceptions are of what the jobs are going to be available, because quite often the perception's different to the reality. I think there's a big kind of public relations campaign that has to be undertaken to persuade people that there's career options in some of the industries we're speaking about. I just think that's quite important to be part of this debate.

Kate Forbes

Thanks. Stuart.

Stuart Black

Thank you, Deputy First Minister. I'm always optimistic in these situations, because we have done this before in the past. The oil and gas industry came here. Nobody was really trained for that, but it was able to become a successful industry here.

Last week, partly because of this event, I visited Inverness, UHI Inverness's new Sustainable Construction Centre, which is in the [Longman] where they're going to be training lots of apprentices. That needs some funding. We were discussing that with them, because that's the sort of thing that I think we should increasingly do. We do have other facilities around the region. I'm thinking of ETEC in Thurso, which is also one of the best training facilities in Scotland, I think, in terms of engineering and technology. So we have facilities.

I think importantly this isn't just about young people. It's also about retraining of the existing workforce. Recently the HIE board visited Beatrice. A lot of the people working in the facility there, which is managing the offshore wind farm, were from the oil and gas sector and had retrained. These were not people in their 20s. They were in their 40s and 50s.

We have companies like Aurora in Inverness, training people for the wind sector. So I think we do have the bones of something, the facilities increasingly there. What we need to do is put training in place and put funding in place to do it. I think the private sector is willing to do it. I know from Aurora that they're very keen to work with UHI and collaborate, because they see the facilities that they have being useful for students as well. We've also got them collaborating with the local school to get young people from disadvantaged parts of Inverness into that sector. So I think it needs a multifaceted approach.

The other point I would make is that some of the skills needs we don't yet know, because the inward investors coming, they're talking to us but they haven't yet landed. The first thing they ask us about is, have you got the facilities to train the staff that we need? If I take Sumitomo as an example, I was visiting them last week, and they are very pleased with the quality of application that they've had for jobs there. In fact they're talking about growing their workforce. Originally it was 150. They're talking about potentially up to 200 staff, which is excellent. So I think we can do this, but it does require a coordinated approach, as you say, right across public and private sector with a can-do attitude and an approach that gets things done quickly and looks at knocking down barriers rather than being concerned about them and thinking we can't tackle them. It isn't just about young people. It has to be about the existing workforce as well. Thanks.

Paul F Steele

Thank you, Deputy First Minister. I get told off for speaking too quietly, so I'll half shout, half talk if that's okay. Yes, we're doing an awful lot of stuff in the Western Isles in relation to skills. Frank obviously touched on the fact that this is focused on Highland at the moment, but it's crucial that it does include the island areas. The work that we're doing is quite far developed in a number of ways, so I think it'll fit in quite nicely with what's being proposed here.

My point was going to be about industry. I think it's absolutely vital that industry's involved. We're having a really good discussion with SSEN about this. There are young people. They're quite keen to get engaged. We do have facilities. We're investing in facilities. There's the new campus in Stornoway, which you're going to see yourself tomorrow. There's Cnoc Soilleir down in South Uist. There's places where we can take these things forward. There is young people there who want to take these things forward. So I think you're absolutely right. We just need to link the two.

I'm going to refer to a visit we did to the Isle of Wight as part of the UK Islands Forum. We went to see CECAMM. One of the things that worked really well there was the fact that industry pretty much funded the whole building. They funded all the courses that were running there. There was British Aerospace, lots of other really good examples of basically the young people coming in and knowing that they were going to be going into employment afterwards, because it was funded by the employers who were then developing their own workforce that way.

So there's really good examples out there. I'm sure we're all aware of them. But I think it's vital that it's across the whole patch. You're absolutely right, your point it's not just about young people. It's about reskilling and retraining as well. Thank you.

Kate Forbes

Thanks. Ealasaid.

Ealasaid MacDonald

Sin e ag obair a-nis.

[That’s it working now.]

Thank you very much. Just pick on a point there that Richard Lochhead made and I think is coming up [and is slightly different]. This is very exciting and the speed - and when I hear people talking about can we speed this up and when I see statements like this is repopulation of the Highlands and Islands - and I take that - and the one word that's not coming up quite a lot today is community. How do we take the community and the people with us on this? Do they even know it's happening? I know we all do and there's a lot of discussions and things. But we need to make sure that people are informed, because when you hear what Bill was saying there about the one, two man band futures, they are essential drivers to the economy of the Highlands and Islands as well. It's really important that they feel a role. It's really important that the whole of the communities, right across every part of this, feel that this is something for them and that everybody is going to benefit.

I think that Richard made the point there about a PR campaign. I do think as part of all the work that we're all doing here is that engagement on this now needs to start very, very quickly with actual communities that are going to be affected and so that they see the benefits and also that there is discussion on the issues that may come up as barriers, because the sooner you start talking about this, the more you come to good conclusions here. So I just think that level of community engagement is very important.

Kate Forbes

Nick.

Nick Halfhide

Thanks very much. We've talked a lot about pace. I think that's really important and we've all recognised that. But we also know that one of the challenges around pace is getting these major infrastructures through the system so that they can happen. So I'd be really keen for this work on skills and capacity to also include those of us who are in that regulatory space so that we can really make this happen. There's some exciting work we're already engaged with, with the offshore sector about how they can help support us to do that through money that doesn't obviously influence the outcome but which supports how we do that. I think if we can look at those - so whether it's us or those in the planning sector or those in Scottish Government who look at this, that needs to be part of this so that we can move at pace. Thank you.

Kate Forbes

Thanks.

Raymond Bremner

Thanks very much, Deputy First Minister. I think picking up on the point that Ealasaid was saying there just now, and following on from what Stuart was saying, actually there are case studies, there are examples all around us. It is living and breathing in our communities. When we know the contribution that Beatrice has made, as an example, and other developments like that, Gordonbush, where the people who are now engaged in full-time employment, gainful employment in these areas are living in our communities, they have - they are earning. They have their families in our communities. There are numerous case studies, as Stuart was referring to there just now, that we have the ability to be able to actually show what this can do and will do for our communities in the future. I think that we have the ability to be able to look into that and to promote that.

I also think that a lot of the work that we've been doing and developing, the [My Future Highland] - that term hasn't been used at the table here, but something that our council's very much working with - is working with young people in - it's developing our youth to be able to get their contribution, not just now but in the future and to believe that that's a sustainable future for them. Many of our young people actually go into gainful employment as Frank was saying there just now, but being able to go into gainful employment and learning a skill and being able to contribute to the very picture that we're seeing on there can actually work hand in hand with education and transforming skills through vocational education. Frank and I have talked quite a lot on that previously.

Going back to the point Ealasaid was saying there, there is lots of proof and lots of examples that we can take to our communities and let them actually see that even when they were maybe sceptical when Beatrice was actually getting off the ground in Wick, now you can actually see there are people who are living in Wick, living in Caithness, who have got jobs in Caithness because of Beatrice. The transformation of our harbour and our port, that has also allowed other businesses and their employees to be supported. It's the whole picture that we can actually show supports skills development, not just now but in the future, and our ability to be able to provide for that.

Kate Forbes

Thanks.

Pippa Milne

Thank you, Deputy First Minister. I suppose building just on some of what Raymond said, I was taken by one of the comments earlier about mapping how much of this will come potentially from young people. Our expectation, I suppose, is some of this will be migration needed into areas just because of our depopulation and ageing demographic. I suppose there is something for me about understanding, from those businesses, what will make it attractive for these people to relocate so we have the legacy of people as well as infrastructure, because certainly in our area where we're seeing some of the infrastructure developments, it's a very transient workforce. That again, picking up the comments about community, is certainly being felt by communities as having an impact that's not always positive.

I think there's something about what are the wider things that we need in our communities to make it attractive for people to relocate permanently, that sense of mapping of the longer-term opportunity? So it's not a flash in the pan. There is something for them for a career to relocate. But then what are the gaps in communities that are potentially needed? We see that just the sort of social things for people to engage in in some of our areas are lacking in areas. Then I think some of that is also then how do we promote these and market the areas with these opportunities for the long term? Because we have a lot of positives in terms of quality of life and things that I think we can promote. But it feels like we'll need to do that as well as the work we do to invest in young people, and again industry can potentially help us with what they understand is successful where that's happened elsewhere. Thank you.

Frank Mitchell

A couple of comments probably worth reflecting on from what I've been hearing.

On the promotion, I think part of what we've said and already heard from industry is they want to jointly do that promotion with the public sector, because they need to be told to come in to do that. So promotion both at the school level, telling them about the opportunities that are going to be there in the long run, but also outwith the region to try and attract people into it is something that industry really work with the public sector on. Employers have to be at the heart of this, is key, because they have to [step] out the demand, the skills they need, all the rest of it. That's going to be part of what we do. We already have [intelligence] in that area, but it needs to be full. But the one thing I would counsel against is trying to do that everywhere at once, because you could end up boiling the ocean, biting it off region by region. If we can do it, bite off one region and then as we start [unclear] another one, try and do it that way, build it up rather than try to do everything at once and not getting to the end of it. That is one of my concerns.

The other thing I would say, I've had a number of CEOs contact me directly to talk about this, and there's a great willingness to participate in this as a private sector. As an ex-CEO in the private sector, I know where they're coming from. What they'll end up doing, if they feel they're not getting anywhere, they'll just spend the money anyway and sort it for themselves. That'll be the missed opportunity. They're going to do this. They've already got business cases. They've got profit and loss accounts modelled out for the next five or 10 years they need to deliver against. So there's a willingness just now. It's about doing that jointly in a way that can help more than just them, because they'll [unclear] employers are spending about £4 billion a year in Scotland over and above the money that we're spending in post-school education and training. So there is a win-win there that both can come together in a natural fit that benefits more but actually costs less overall, if we can get that to work.

So that's the opportunity, but the worry they have is they end going to meetings that don't achieve anything. They'll end up just cutting and running. They'll just say, right, I've had enough of this. So we need to be able to go with the confidence and ability to cut through it, make decisions, get on with it fairly quickly in a way that doesn't stifle that opportunity that we have just now in front of us, because they're worried about coming into a forum which doesn't action, it just talks. That's their concern. So that's bringing that discussion I'm having already with CEOs, who want to participate in this, to this meeting as well. Thank you.

Kate Forbes

Emma.

Emma Macdonald

Thank you very much. I just wanted to really flag up that whilst we're obviously talking about upcoming opportunities, I don't think we can lose sight of the industries that we currently have that really need those skills and need to recruit people. We're seeing a real shortage of people across all of the sectors in Shetland. We can't lose sight of how important things like fishing, aquaculture, all of those areas that really matter in the Highlands and Islands, to the detriment of this new industry. Whilst there's lots of opportunities, I do think we have to remember that we also need skills for the industry that we do have. It's about balance, so I think we need to remember that. Thank you.

Kate Forbes

Thanks very much for that. So I think two things that have struck me in that conversation are that there is general agreement that this is something that needs a plan and that in the context of that conversation I think we've done a good job at outlining what the various challenges are, some ideas for actions, but the next conversation needs to be probably entirely in the action space. The second thing that struck me is I think it was Vicki that said - I really did write it down - we need to speed this up and find a way. That is the aim.

We talked about the dangers there. I suppose there's two dangers in my mind. Actually both of them come from Ayrshire, one of which was major investor, inward investor, hugely exciting, and then that didn't come to pass for various different reasons. But the conversations at the time were we're all celebrating the inward investment, great. But are we celebrating all the jobs or have we identified how the jobs are going to be provided? Because if you don't have a plan for that, you either do what Frank said, which is you have no legacy, they'll fix it themselves. Secondly, it's just a recycling effort and everywhere else, the current domestic industries, just lose out on the staff. Or thirdly, people come and then they go, and that doesn't create the legacy that we want.

So I think CoHI should lead on this and avoid duplication of lots of different efforts to fix something, lots of different efforts to solve it. The point that Frank made around having lots of meetings with industry where we keep diagnosing the problem, but not actually providing solutions, is what we need to try and avoid.

So my suggestion for an action is that we thank Frank immensely for all his work and ask him if he's willing to do a wee bit more in terms of taking this forward to look at, first of all, mapping out precisely what the demand is, quantifying it as precisely as we can. Clearly it's a private sector led opportunity and a private sector led challenge and so businesses have to be at the heart of it. But understanding precisely what are we talking about in terms of skills, when do they need them, who needs them and what the process is for acquiring them.

Nick made a very important point that can't be lost around the enabling skills too. So for example, with the scale of planning applications, the role of planners or regulators in all of that. I think that that piece of work needs to have ownership across the Convention of the Highlands and Islands, so I'll be looking to see if people agree or disagree with this suggestion. We definitely need the national organisations involved - SDS, SFC and others - but led on a local level in terms of our local colleges and UHI. It needs to look at the skills element but can't lose sight of what's required in the non-skills space. So if you are going to fix this partly by attracting more people to move into the Highlands and Islands, who's going to deliver the housing and who's going to support that element of it? It's got to be public and private sector. It's private sector led. So the local, the regional, the skills, the non-skills, the public and the private.

The points there that have come through around some of the ideas - so the co-investment with the private sector, I know HIE have a lot of form in supporting that and making that happen. It's been a big selling point with some of the investors that have chosen to invest in the Highlands.

Thinking creatively, there was talk about a joint promotion. What does the promotional activity look like across the UK? What does the promotional activity look like across Scotland and so on? What are the timescales? What was required last year/immediately? What is the focus for this coming year? Then what is the focus for four years' time, five years' time and so on?

So that would be my rough outline of what I think is required. If the convention is content to agree to put in the hard yards between now and just after summer to bring back a plan that is uniquely Highland - it's a uniquely Highlands and Islands solution to some of these challenges that have been identified.

Can I check if I am missing anything from that conversation as an action there? Alistair.

Alistair Dodds

Sorry, just a couple of things. Could we progress this through the Regional Economic Partnership? Because we've also got a wider membership there from the third sector and from the private sector as well. I think it'd be quite useful to have that touchpoint before the next CoHI. I might not be there, but I think it would be really helpful to have that.

I think the other thing is Frank was, I think, saying at the start that we do need to get back to some more local discussions with Shetland, Orkney, Moray and so on. I think that'd be really helpful to get what is the local perspective on this? I think that'd probably be appreciated as well.

I think the last thing, which may or may not be popular, but what I'd be really disappointed in - and I think Frank has really brought this up - is that if we just talk and just provide a plan and there's no response to that plan, then we're in deep trouble. I think it's really important that we've got the commitment from government, from everyone else in this room, that we respond appropriately to that rather than just noting it, because we will lose credibility.

So that's, I think, just to add these things.

Kate Forbes

Yeah. There's three examples that I know I've been involved in from a government perspective in the last six months where I feel we have focused on the immediate interventions where either it's been providing funding to a particular sector cluster which has been more than match funded by the private sector - and the Clyde maritime cluster would be an example far from here. The second would be the specific £3.5 million in offshore wind skills at the request of industry. The third is an action plan for advanced manufacturing, all of which has happened before [unclear] where that's focused on, for example, veterans. It's focused on those that are far from the job market. How do we bring in people? Because with unemployment at rock bottom with restrictions around visa, we have to be as creative as possible to expand the workforce and to expand the skills, as everybody knows.

So I think I'm very happy to put this through the Regional Economic Partnership, unless anybody disagrees, and for there to be a report back. But if it does go through the Regional Economic Partnership, I guess there's still a requirement and an invitation for some of our national organisations that may not be represented on the REP, and some local organisations that may not be represented on the REP, to feel the strong invitation from the Convention of the Highlands and Islands to participate in full with your best creative hats on. Raymond.

Raymond Bremner

Yeah, I agree with everything that you said there just now. I think that by taking up the proposal that Alistair has said there just now that the REP can actually steer, just exactly what you said at the end there, and identify there are maybe some key national or key regional partners that can - and the REP can do the work of that and report it back to CoHI.

Kate Forbes

One further suggestion from me would be whether there's scope to have an interim list of recommendations so that, by the time we return to the Convention of Highlands and Islands, we actually don't just have the recommendations but we have the agreement secured in terms of what's required with that. But we would need to therefore see what the recommendations in terms of specific actions are in advance.

Does that meet everybody's objectives? Is that sufficiently ambitious to meet the scale of the opportunity? Yeah, roughly?

Frank Mitchell

Yes. Nod your head.

Kate Forbes

Thanks. Well, thank you very much, Frank, for that huge [power of] work. Thanks, I think you have agreed to continue to help us?

Frank Mitchell

I don't think I had an option.

[Laughter]

Frank Mitchell

I thought Alistair was going to have a bit of free time to go, but he's passed it back to me.

Kate Forbes

Okay. Paul.

Paul F Steele

Just briefly, Martin gave an excellent presentation at the start and I don't know if he actually discussed that.

Kate Forbes

We'll come to it.

Paul F Steele

Come back. Perfect. Thank you.

Kate Forbes

Yeah. Thanks very much. I am really keen - you will have seen that I have tried to ensure we're ahead of schedule. So we will go to housing next if that's okay, because skills is a big enabler. I think we've got an approach now to skills. The second obviously big enabler is housing in the context of the RTO report, so can I suggest that we focus on housing for about half an hour? That would give us half an hour to then discuss all the other enablers, barriers and opportunities that are part of the wider RTO discussion. So Derek, over to you, specifically on housing. Then we will come back, Paul, to your point around the wider points.

Derek Brown

Thank you, Deputy First Minister, for the opportunity to do this spotlight on housing. I'm conscious that other local authority leaders may wish to support or enhance or nuance things I say here. This, as you say, is definitely about an economic enablement. It does have a read across to the skills discussion we've just had. Here we are, talking about responding to the RTO paper which is terrific in how it sets out that potential regional demand, but also it allows us to then think about how we map the supply-side solutions across skills [at] housing, et cetera.

So I'm going to also just say that this is part of - as my colleague from Argyll and Bute has said, about the whole business of addressing depopulation, which we know there is a Scottish Government strategy to do that. So I'm going to talk about powers that might be useful for local government and local partners and some of the funding solutions that might actually help. This is part of the whole business of aligning ourselves across Scottish Government, across local authorities to try and unlock developments to simplify process, to enable activity and to align ourselves as partners.

So one of the great things about the RTO paper is it does identify the aggregated Housing Need and Demand Assessment across the whole region. It has a figure of 36,000 houses needed over the next 10-year period. It also identifies the 12,600 vacant properties across the region as being a thing we should be considering as a potential solution, so how would we enable that?

So I'm going to just spotlight Highland Council just because we obviously declared our challenge and others had emergencies and other versions of how they were describing things. Our challenge which was described in CoHI and Shetland - and thanks to my colleagues from Shetland Islands Council for allowing us, in the last CoHI, to piggyback on the back of their paper and add a spotlight from Highland at that point. So we're trying to build 25,000 houses over the next 10 years, which is doubling our build-out rate. We have a mature public/private sector partnership supported by Scottish Government. It's well advanced. We normally do about 1,200 houses a year, 700 private sector, 500 social and affordable. To double that, the cost of that is 2.8 billion at current estimates.

Now I'm going to talk about financial levers in a minute. But obviously wherever we go in the Highlands and whether you're talking to the Dunvegan Parent Council or Community Council, whether you're talking to our own harbour team in Lochinver, whether we're talking to businesses in Caithness or Lochaber, whether we're talking to potential investors in the Green Freeport, for example, housing is a key fundamental ask, because that'll underpin the future workforce that we can bring in and grow. Can I just also say we currently have 9,000 people in the Highlands who are on first-priority waiting lists for social housing? That's definitely a thing that's on our mind in terms of securing homes for people who are in the Highlands at the moment.

So in terms of sources of funding, there's different ones. Obviously one of our asks - and you would expect this, Deputy First Minister, and I think that's why you mentioned earlier that some of these things are difficult for you to do and we appreciate that, but obviously maximising the public sector grant funding for social housing and ideally over multiple years would really allow a security of pathway for developers and a surety of funding propositions that would really help us.

In addition to that, we're obviously going to have to provide some reassurance to private sector partners that there is enough security of the housing pathway for them to bring forward developments. This is where we're interested in guarantee schemes, whether that's through Scottish Government or through future powers through local authority partners. One of the things we think is interesting in this sphere is the potential of a General Power of Competence to enable local authorities to take things forward, especially around future mid-market rent propositions and differences of tenure.

Again Pippa's mentioned the ageing population. One of the things that's on our mind is the future of sheltered housing and how that can help people move into a housing pathway which is more suitable for them at certain times of life. That can perhaps free up property as well.

So I suppose just on the whole finance piece as well, we have a Social Value Charter for Renewables in Highland. We want to maximise the legacy from the investment and make sure that the people of the Highlands benefit in terms of future infrastructure development. We also have potential in our Green Freeport for [NDR] concessions to fund infrastructure developments, but it will take a while for that to flow.

So at the moment, that's almost like a massive scale. I'm not underestimating it. There is a sort of cash flow element to this and a sort of chicken and egg, how do you unlock the developments through bringing the funding first and that security of pathway for the developers? So we've currently got energy developers who are saying to us, we need the houses now, and housing developers who are saying to us, we're not sure the market conditions are such that we can take the plunge and actually invest. I'm asking myself, what's the role of the local authority in that space and also, I suppose, what's Scottish Government's role [to unblock]?

The second thing we're focusing on is land. Now we have large amounts of lands in few hands in the Highlands and not all of it would be easily developable for housing, but we do have a conversation to be had with private sector landowners and also public sector landowners. We have some here actually. So a conversation about how we unlock parcels of land to enable housing development to actually address that Need and Demand Assessment. I think that potentially is part of the single public estate and potentially rationalisation of our offices with other national partners so we could free up buildings for retrofit and conversion. I think that probably would be quite an important thing to do.

We have 2,235 long-term empty properties in Highland. We think that a conversation needs to be had about how we facilitate the purchase of those properties, potentially through compulsory sales or compulsory purchase. The powers to do so, again Deputy First Minister, and the speed at which things can be processed is an issue for us if we're really looking with urgency at taking things forward. Obviously we're progressing Masterplan Consent Areas and I'm sure others are as well, so there's a sort of land reform piece that's quite critical to doing this at scale and at pace.

Then I suppose there's been discussion in and around workforce, because it is one of the major blockers. Some of my colleagues have mentioned the risk of displacement. But if you're trying to undertake massive construction projects to feed this future energy development, you have got a huge risk of displacement. So how do you protect your supply chain? How do you build the developer capacity? How do you enable this to happen at scale? How do you bring that workforce and make it not a transient workforce but a longer-term workforce? So we're talking a lot about how we give developers the confidence to proceed, how we underwrite and guarantee things for them, how we bring that skills and workforce through the previous conversation.

One of the other things that is a major blocker, so therefore a major ask I think of us to, I suppose, Scottish Government and the UK Government is grid capacity, which can prevent the speed at which you can bring forward housing developments. So ultimately as well the cost of building a house in the West Highlands would be almost double what it would be in Inverness. Mechanisms for taking the cost of construction out for developers is definitely something we need to do.

I suppose then the last set of asks we've really got, Deputy First Minister, are around how we would fund or enable any net-zero developments relating to new housing and potentially, in the future, existing housing. The issue really is how would that be implemented, how would that be funded? Because obviously the more restrictions that are in place, the more challenging it is to fund it, so therefore the fewer houses we would actually be able to develop. So I know that that's an issue that everybody's thinking about. So I'm highlighting both the new building of housing, which there is provision for nationally, but funding isn't necessarily there, but also any moves around existing housing. I'll give you an example. We've got 15,000 social houses in Highland. The cost of retrofitting them, up to a reasonable standard to meet the net-zero conditions, would be well over £1 billion which so far is not fundable.

So just to summarise, Deputy First Minister, our housing challenge action plan will incorporate a skills plan. One of the things we've worked with Frank and Damien on and with UHI and indeed with our Green Freeport colleagues, and indeed with Highlands and Islands Enterprise, is a sort of Plan on a Page for skills, so we can map the pledges from the private sector, so we can actually give them the reassurance that the workforce will be there and the planning to develop the workforce will be there. Then that will be part of our housing challenge action plan as well. When we go back to our future conference - so we need the plan and we need the map for ourselves in Highland, but I think there's a broader piece for the Highlands and Islands as well, maps and pledges, regional supply-side solutions.

So land, it's to help us unlock the land. It's part of that single public estate. Consider the ownership of housing for Highland people who wish to have it, because that's their mechanism for staying in the region, linked closely to the workforce and the creation of jobs.

On the finance, support our work to secure the private sector contributions from the legacies from renewables and also maximise the private sector developments, maximise the grant programmes for the public sector piece. Consider the General Power of Competence and how it might play into this sphere. In terms of capacity, help us offer the guarantees to developers, the security of the pathway so that they can take the plunge and make the investment. Help us align the resource in terms of skills and workforce, supply chain and grid capacity. In terms of net zero, consider the cost of the new standards and the implications for fundability.

Yes, thank you. So I suppose similar to many others, again without repeating, hopefully we're making some good progress on empty homes. We're starting to look at purchase, particularly some remote areas where there's particular issues and property becomes available. We're also working quite positively looking at conversion of some existing properties. We're doing some of that in conjunction with NHS Highland where we've supported funding bringing some of those properties back together. So we see some progress with that and with the More Homes division in areas like Dunbeg, which is - HIF and things have been quite essential and transformational.

I suppose the other area is just to highlight very briefly when we got communities getting involved in building houses, some great examples, but that's difficult for them. There's limitations where some of the funding can go on that, and it's very costly, so there's perhaps something for us to look at how do we continue to do more to support community trusts to do that and good examples of where business have got involved and fund that?

Developer capacity is a real challenge. I think we only have two developers of any reasonable size in Argyll, so I think perhaps linking back to the earlier point is how we continue to look at that skills issue as a real issue.

I think worker housing, again more flexibility of how we could use our RPA to also support worker housing. So we're doing some with community trusts, but that's as much an issue in some of our communities of just having a place for people to land to take up jobs initially. We can't quite use it in the same way, so it's that full recognition of the remote rural challenges. I suppose just as a [unclear] authorities, just how we can support the RSLs who, in our case, build the houses, so they have real limitations in terms of borrowing and access to funding that we need to look at how we support those. Thanks.

Craig Hatton

Okay, I'll say a few words and then I'm sure Alan will want to add to that. I think one of the big things for us is the ferry. That's affecting cost and affecting the ability for companies to bid for work on the islands, because even if they put a price in, they plan for materials going across, skills going across, because we can't retain those industries on the island. That adds to the cost. But in reality what happens, they just don't bid, so there's no market, there's no competitive market. So if you are getting development, you are paying a massive island plus, because the islands always have a premium around that. So we finish up with incredibly expensive houses on the island to build, which is a real challenge. Even for us being a mainland authority with islands, that market capacity is a real challenge. So even though we're quite well situated in terms of the Central Belt, market capacity is really affecting tender returns at the moment across all construction projects, and housing becomes part of that.

I think Derek's articulated land availability on the island is a real concern, because we've got land in the hands of a few owners and they are dominating the market when it's released, around that.

But they're a few key perspectives. I'm sure Alan, who chairs the Arran Housing Taskforce that we set up specifically with community to try and address this issue, will be able to add a few more points.

Alan Hill

Thanks, Craig. The Housing Taskforce has just recently completed a detailed survey of island residents, so we had a return of about 21 per cent which is quite healthy. That's currently being analysed. That should give us a pretty clear picture of the demand and the unmet requirements for housing on the island.

Arran Development Trust recently completed its development and was handing over keys over the last couple of weeks to new tenants on the island, which was a great step forward. Again the council's been working closely with them in terms of delivery. I think they are quite keen to look at exploring the possibilities around about maybe modular housing developments and whether there's some way of trying to streamline the process that makes it simpler. They also have had issues around about funding and tender and so on. I know they've been working with other community groups through the Scottish Islands Federation and others to try and share knowledge. Again I think that's something that hopefully we can support across the wider Highlands and Islands.

Kate Forbes

Thanks. [Unclear].

Maggie Sandison

Thank you. Yeah, similar experience in Shetland. We're just about to report on our empty homes project where we've looked at empty homes across Shetland. We recognise that they're probably not the solution that we might want them to be. They're often in low-demand housing areas. Their condition may well be poor. The cost of renovation and the availability of workforce to bring them back into condition is also challenging. But we'll be bringing a report to the council on where empty homes work fits into the wider housing strategy.

I think the council and Hjaltland Housing Association have two large sites, Staney Hill and Knab, which we're getting really good support around through the islands deal and also from More Homes Scotland. We've recognised that preparing some of these sites for housing is actually a significant cost, so the preparation work needs to be in addition to the cost of the actual build for the housing.

Developer capacity is a real challenge. We've been looking at chunking down work to make it manageable for the local industry and also good programming of work across the RSL and SIC. The issue that people are mentioning about the cost of build and then the value of the asset at the end and that [disparagement] in - particularly the further out you are.

I think the other thing I would say about the retrofit around bringing the properties up to standard, we have actually found on occasion that it's better and more effective to actually rebuild than to retrofit. I think that's something we really need to look at into the future is the cost of retrofit, the skills for retrofit. Then the level of improvement that you achieve through retrofit may not actually make it worth investing in.

I suppose the other issue for the council at the moment is very much exploring stepping into the mid-market rent space. The challenge as a local authority with housing to set up an arms-length organisation to enable us to be a mid-market housing provider - if there was a solution that made it easy as a housing provider, that would be really helpful to look at actually how do local authorities get enabled to step into where there's market failure around private rented sector. But actually to have to set up a new arms-length model in order to be able to meet that market failure feels like an onerous and unnecessary burden on a small local authority, so some solutions around that would be helpful for us. So thank you.

Kate Forbes

Thanks.

Paul F Steele

[Unclear]. Thank you, Deputy First Minister. I'll start on some of the negatives and I'll let Malcolm give you the positive news. The opportunities ahead of us are huge, but there are a number of challenges. Obviously land availability for us is big. A lot of us in the crofting sector, so these processes are - you guys are working on them, you're trying to support us, but it is vital that we're able to get these things through quicker, especially with the impetus on these developments coming forward. A lot of our stuff is going to be in place and built by 2030 and then the renewables are going to be producing after that, so a lot of the stuff is going to have to be done now - well, last year, this year and next year.

So the other thing, it's been touched earlier on, the restrictive National Planning Framework, the requirements for studies on flooding, archaeology, decrofting, et cetera. When we're time critical for these projects to be taken forward, we need to be aware or maybe have some consideration about what we can do about that.

Capacity of the local construction sector is limited. It will be more constrained as developer accommodation [has needed to be] built out, because a lot of the same workforce will be looking to move into the renewable development sector. So it's going to be quite a tight timeline to make sure we don't lose that workforce that's enabling the works to then be the ones that are going to be delivering the future works. There are no private housebuilders of scale in the Outer Hebrides, Western Isles, so it's going to be very, very difficult to manage that over the next few years.

Masterplan Consent Areas under consideration, I think it's a good idea. Our issue is we've got an under-resourced planning service, so the work that's coming ahead, that's going to keep them fully occupied. So it's going to be difficult to prioritise that approach whereas we know it would be beneficial, so some support to take that forward would be gratefully received.

This is just a wider point on housing in the Western Isles. A lot of it is traditional croft houses. A lot of them need a considerable amount of work. They're below tolerable standards, so there's no funding in place to improve that. So it's just a ticking timebomb in terms of housing in the Outer Hebrides going forward.

With the work that's going to happen that I'll pass on to Malcolm in a second, there's going to be a lot of worker village accommodation required, so a lot of that will be modular and there's going to be some legacy housing involved. So really key to that is the legacy of service sites that will be left for housing developers and - sorry, the housing association in the Western Isles and ourselves to take forward projects.

SSEN are working with [TIG] in the tourism sector, and this idea I've been pushing forward myself. I think our colleagues at HIE are doing a feasibility study into converting holiday properties from short-term let into long-term let and providing some funding so that these short-term let owners are able to purchase modular, cabin, pod, whatever it is. So retaining the tourism aspect so you're not having a negative impact there but also enabling housing to be brought back on to market. For example, the figures we threw out was £50,000 to £60,000 for a pod. You're then getting a house back into the housing market for 50,000, 60,000. At the moment, affordable housing in the Western Isles is 250,000 for a two bedroom. So we think it's a neat solution. SSEN and TIG are working on that just now for their specific project, but I think that's something that could work across the rest of the Highlands and Islands as well.

The other thing is, which was touched on a wee while ago, long-term empty homes. SSEN are also helping us with that, but we have an empty homes officer who's doing fantastic work on taking these things forward.

I just want to touch on one thing that Craig said. That was about the cost of actually getting materials across to the island. It's increasing our costs exponentially, so some consideration to removing freight fares for construction materials would have an absolutely amazing, fantastic effect on the ability to deliver on these things.

So Malcolm, I think there's a few things you wanted to say.

Malcolm Burr

Very little to add to that. Suffice to say we will need to accommodate about 1,500 transient workers over a five-year period. That reflects the huge renewables investment coming in between next year and 2031. The good news is that we have a good working relationship with the major private sector developer. That's about building legacy housing. It's in and around Stornoway. We would obviously like it to be a bit wider spread. But 50 per cent of that will go back to Hebridean Housing Partnership, our registered social landlord, the other 50 per cent to the housing association, Tighean Innse Gall, for mid-market rent and shared equity sales. I think it's illustrative of the good partnerships you can have with the private sector developers if matters are taken forward in a coordinated way.

But it's a lot of accommodation in a short time for a small population. The issues about contractor availability and cost, these are Scotland-wide but, of course, they're enhanced in the islands. I think otherwise our comments reflect many of the comments made elsewhere. But finally we were pleased to see in the Programme for Government the proposed continuation of the Rural and Islands Housing Fund, so I hope that commitment manifests itself. Thank you very much.

Kate Forbes

Thanks very much. I am now using up all the spare time that we had. Highland Council are keen to come back in, so I'll come to Bill. Then Sean, I'm keen to hear from you in terms of the funding. Then I'll open it very, very, very briefly to others and then we'll just get into action space. Bill.

Bill Lobban

I'll be very brief, Deputy First Minister. It's just very quickly a plea to energy developers. Can you just move away from the work camp model? Can you actually build homes for your own workforce or, at the very least, leave behind a service site which will then revert to the council or social landlords or whatever? Because really this is the legacy is not just the legacy of you moving in 200 employees, sticking them in portacabins and then, three years later when your project's finished, just to leave again. But also there's no point in building large numbers of houses if half of them end up as short-term lets or second homes. I think the Scottish Government have been very responsible in that, in trying to restrict that market. Really thanks very much for doing that.

Sean Neill

Yes. Thank you. I think to come back to your point, DFM, on the funding, so obviously this year there's a significant increase in money going in the Affordable Housing Supply Programme. That'll all match back out to what it's been in the Strategic Housing Investment Plan, which was brought forward by the local authorities. That therefore gives you a degree of certainty about how we can support a housing programme going forward. But I think there's more in that that's actually trying to tease out some of the blockers.

We're trying to make sure that there's money available for infrastructure. So we're talking about Staney Hill. There's infrastructure funds there so that if things like development side costs are becoming too expensive, then there is an infrastructure fund that we can use to try and make sure that the developments take place. So I think it's trying to make sure that people are aware that there are different sources of fundings available to try and enable and unlock housing. I think there's money that's been set aside for acquisitions to try and get some short-term money in the system and also increased investment on empty homes to try and again turn the stock that we have.

So I think traditionally we've very much been focused on a medium-term plan. We have a medium-term plan, but we're trying to pivot some of our actions into short-term, get houses more into the system right away. I think that was tried to reflect back in the budget. I'm very much happy to have those conversations with each of your housing teams about how we can support that, and it has to be done very much in partnership. I think there's a lot actually we can do with the private sector. It's already been mentioned. But there's a lot we can do around guarantees that we're trying to explore a little bit further once we get into the detail of where the sites are, what are the tenures, what are the propositions and then how can we package them all back up collectively?

Learning about what's going on in Ireland, there's different ways of doing this. I think we need to be in that different ways of doing this. Hopefully we've kept some of the budget aside that enables us to think a little bit differently in that space as well. I'll pause there, DFM.

Kate Forbes

Thanks very much. An idea to throw into the mix and then I'll go to Andrew, which will give you enough time to tell me whether it's a genius idea or a terrible idea. All those summaries are actually really helpful. You start to see very quickly what are the shared blockers and what are the areas actually, in the last year or so, there has been some progress on, so particularly around the funding. But whether there is scope on a regular basis in advance of the next CoHI - [so really] against those six strands of funding, land, planning, construction capacity, empty property and regulation, we could invite every local authority to just give us your high level what you've delivered against those in terms of how many more acres of land you've been able to acquire or consent, or how many homes you've been able to deliver, but then also highlighting some of the biggest hurdles you've seen. For example, on funding, someone talked about key worker funds which obviously have existed in the past, infrastructure funds which we have already.

Then there's teasing out the blockers, to use Sean's point. So this will just be really light touch. This is not a big report, sort of a light touch. Ahead of every CoHI, if we had a bit of a grid, every local authority, each of those areas, what are we making great progress on? It's fixed. What are the things that can be escalated, on a CoHI-wide basis, to government and to Sean or to others, for example in grid because we don't control grid, that could be - it's just an idea. Right, I'll go to Andrew and anybody else that wants to come in.

Andrew Thin

Three very brief points. The first one, regulatory integration. No question, we will want to build houses on croft land in some places, especially in the Western Isles. We need a much more integrated approach to regulation between the Crofting Commission and the planning authority so that it's zoned, you've got masterplans and you've got the decrofting process integrated, really crucial.

Point 2, we will want to build houses or provide houses in places of high tourism, but [unclear] where there's serious competition from the tourism sector and the second-home sector. We need to try and figure out how to use the residency duty which is already in law, already in crofting law, to deliver housing that is separate from the tourism sector. We're talking to the Land Commission about that. There's a strong case, I think, for trying to accelerate that thinking.

Point 3, one of the Highlands and Islands' unique selling points is the possibility to come here and bring up your family on a croft. It is a unique selling point. If we're concerned about key skills and attracting and retaining key skills, we need to free up more crofts, so we need to get tougher on absenteeism in order to free up those crofts.

Kate Forbes

Thanks. Kathleen.

Kathleen Robertson

Yeah, thank you. Just picking up on some of the points that have already been addressed, but I think there are some concerns about the fact that we're talking much about transient workforce. What are the impacts going to be if they're only here six or seven years to build all this infrastructure? Then the maintenance is a much smaller workforce. Are we going to be left with extra homes that are going to be empty or holiday lets, et cetera?

The other thing, too, is that we talked about the skills development needing to be at pace. I think we're needing the housing also to being at pace, but if we do this at pace, there's a huge risk, I think, of hotels and tourist accommodation being filled up with workers rather than tourists. So therefore in the report as a whole, we don't really look at the impacts of tourism. In fact it states quite clearly that tourism is not looked at. But I think people come to the Highlands for their holidays, and I think we really need to be mindful of that.

Kate Forbes

Thanks. Craig and then we'll go down here. Then we'll move on to the next section which is to go back to Martin's presentation.

Craig Hatton

To ask the questions that I posed at the beginning, which was where do you see an opportunity for your organisation to enable this to progress at the pace it needs to progress? Secondly, are there any blockers that you see beyond housing and skills, which we've given quite a lot of airtime to? Is there an opportunity here for a Highlands and Islands wide collective ownership of this, not least when we are trying to secure external interest or global interest in some of these opportunities? So it's really, who owns the barriers? Who owns the enablers? Secondly, what would a Convention of the Highlands and Islands wide approach look like to making this happen? Kathleen.

Kathleen Robertson

Yeah, I feel quite strongly there's two bits that we haven't really touched on. One we have slightly, but it's bringing in Ealasaid's point about the community. We've really got to take the community with us on this. Otherwise they're going to feel that it's being done to them. We're already seeing examples in Speyside where there's a Storegga hydrogen plant planned. There's a huge objection from the public but also now from a local distillery. So we have to really go out [in] community roadshow, in their language telling them what the advantages and socioeconomic benefits are going to be in the long term.

It would be absolutely remiss of me not to mention the A96. I almost feel it needs to be dualled ahead of the A9, because I think the corridor from Aberdeen right across to the Green Freeport is going to be crucial in allowing for movement of goods and construction elements. So I think both need to be dualled, but I would almost say the A96, in this context for the RTO, is absolutely crucial.

Kate Forbes

Thanks very much. Fort William might have some views as well on key roads. Emma.

Emma Macdonald

Thank you very much. My point was going to be coming in on the same thing around that community. I think not so much a blocker, but I think that is a real issue that we're going to face. We're already seeing that in Shetland that people are feeling that they have already done their bit, why should more things happen in Shetland when there's no benefit?

I think the points that Martin made around that lasting legacy really has to be things that the community feel that they have gained something from rather than just some jobs, some people coming in, doing and then going. There needs to be some real tangible investments in infrastructure that people can look to and say, we've done this to contribute to wider kind of areas, but we've gained this. I think unless communities are seeing that they're gaining something, it's going to be really difficult to bring them on the journey. We have to bring them on the journey, because like Kathleen says, otherwise people will feel it's being done to them and we want to do this with our communities. I think that's really important.

Kate Forbes

Raymond, Bill, Paul.

Raymond Bremner

Thanks very much, Deputy First Minister. I think that it's more of the same on some of the themes that we've been talking about there just now. I think first of all, given what we've been looking at this morning, the first thing I would say on that is if we really do believe in the data that we have there, think of the - and really believe in the absolute transformational opportunity that we have within the Highlands and Islands of Scotland where we know that we have been facing depopulation, depopulation statistics for years. Here we have an opportunity to be able to actually [dump] that on the head, actually stop it and turn it around. Then on the back of that, to be able to then, as Emma and Ealasaid earlier on were talking about, know what the benefit in our communities can actually be. What can it be? What can it really be? Sustainable, substantial.

One of the things, Deputy First Minister, you were saying, should we - have we left out, I think that we should always remember that the supporting infrastructure - Kathleen mentioned it there just now, getting her wonderful plug in for the A96 in that. Imagine that, Kathleen. In general, the supporting infrastructure that we need, no matter where it is in the Highlands and Islands and no matter what form that takes, whether it's roads or whether it's any supporting infrastructure or supporting community services - and that goes for health as well. Also in terms of the ability to keep our areas connected, that's really, really important in being able to actually attract and secure investment in our areas.

Taking our communities with us, there are already examples of where we have investment in our communities starting to happen. At Highland Council, we have the social investment charter that we have launched, our Highland Investment Plan that we have brought into being, the vision and the consistent vision that we have in terms of our Highland Housing Challenge where we really do believe that working with partners and sharing and reflecting on the work that we're doing in terms of housing actually allows people to believe that working [corporately] we will deliver outcomes. As we deliver outcomes, our communities will believe. That's the main thing, I think, that we need to concentrate on. CoHI in terms of our assessing what we've actually managed to deliver, both as local authorities, partners and governments, I think that our communities, once they see that, they will actually believe that we're investing in their future.

Kate Forbes

Thanks, Raymond. Bill felt that you were so comprehensive there, he's happy to pass by his speaking slot...

Bill Lobban

[Unclear] me twice.

[Laughter]

Kate Forbes

...and to move on to Paul and then Pippa.

Paul F Steele

Thank you very much. I'm going to do the opposite of a not in my backyard. I'm going to do an in my backyard.

Paul F Steele

So it's going to be a slightly negative point and it's very parochial. But when we looked at the maps, which were excellent, showing the population and the increases during the workforce and then post the opportunities, South Uist and Eriskay and Benbecula, which is currently part of the Uist repopulation zone, because we've identified an issue, is gaining no population. So I just thought I'd need to highlight that as a ward councillor and a leader for the area.

But the other thing I'm slightly concerned about is the migration of people from one area to another, so I think we will actually lose people from our area to Lewis and Harris because of the work that's going to be happening there. So I think we just need to be cognizant of that in terms of what we're doing in other fields. There's going to be other opportunities. Obviously these are not everything that we're doing. There's an awful lot of things that we are doing. HIE have invested quite a bit in certain areas in Uist and Barra, so I thank them for that. But I just thought I need to raise that.

In terms of blockers, I touched on it in the last point, planning. We're not able to employ the planners that we're going to need to take these things forward. There is national support, but I think it could be us as a local authority that are going to be the blockers to some of these opportunities. So we definitely need to address that.

I've heard part of the enabler and blocker is grid. It's come up a few times. I know it's not in your direct control. But I wonder whether there's a case for SSE to come along, because they'll have 10 to 20 year plans in front of them just now. Now there'll be two levels to that. There'll be the transmission grid, which they'll have a strong view of what the projects are going to be that are successful and not successful coming through. Then there'll be the local grid issues that are likely tied to the housing issues. What's going to happen there? I'd like to think that they'll have plans in place that you won't have these same discussions in five years' time or - and they hooked into what your plans are. So it may be worth asking SSE, because it's such a key and vital enabler to a lot of things being talked around here, to come along and just present their plans, what they're doing, at a future CoHI. I think that would be useful.

Kate Forbes

Thank you. Lastly, Oliver.

Oliver Reid

Just a couple of points. You asked about challenges and opportunities. I'm just listening to the conversation and thinking about the challenge and also the experience of Flotta, which was a massive success but, over the whole period of the time that that oil terminal has been in place, we have not been able to get people to live on Flotta, even though the jobs were there. I suspect [Kishorn] fell into a similar position. It was because the physical infrastructure to connect them to the communities that they wanted to live in was not there, and it never could be there.

So even with all the wealth and the money and the investment and the success of that, we have to be careful in terms of thinking about, how do we actually make this really work and be appealing? That does require on-land based physical infrastructure and transport. There is a danger that if we focus on harbours, deep water quays, investment in the places that the maritime sector need it, and we ignore the connectivity that we need on land, that we will not be able to make it work and we'll have places like Kishorn or even successes like Flotta where the community didn't really benefit in that way.

But I also think there's a real opportunity here. You talked earlier about the fact of multi-year budgeting not being available, but we do have the Crown Estate. That is multi-year revenue funding that's coming in. If local authorities had a certainty over a degree of revenue funding and had a commitment to say we'll invest in the physical infrastructure and connectivity required in our communities, then we would be able to borrow and do things that the government can't do and the Crown Estate can't do on their own and really get an impact. The communities then would sit there and say, we can see the benefit we're getting from this activity on our doorstep. So we're in the centre of an energy production power station, but we've got brilliant roads, great connectivity, access to the services and facilities that we need, transport infrastructure off islands and through islands in ways that work. It would be successful.

So I just wonder if there's a conversation to be had at CoHI around how we give certainty of funding with a payback potentially of saying borrow and invest and deliver that physical connectivity so that we don't miss the boat on this, because we're almost there.

Kate Forbes

Thanks very much. I think that's a really interesting contribution to close on, because I'm constantly thinking about how the structures of CoHI can lend themselves to making tangible progress on the big issues that we are all facing. Around this table, there is memory of what has happened previously, what worked, what didn't work. As Heather said, local authorities in particular are in the driving seat of enabling or otherwise and escalating what needs to happen. Euan talked about what it means to speak with one voice on the issues that we don't control. Well, it's very powerful if there is a single position across, bluntly, political leadership, across local authorities as well as across different public bodies.

Frank, I would be very supportive of the notion of inviting SSEN. I wonder if it should be wider than SSEN. For example, NESO and the energy strategic overview of what is required and how it will be delivered. So I think that is something that we should consider in taking forward.

I think in the conversation we've had already, there are some points that have been escalated. My view is that issues aren't going to be resolved without somebody, or many around this table, intervening. So Paul talked about capacity and planning. I guess knowing that there is this avalanche coming, that therefore requires of us a solution. So in the last couple of months, Scottish Government has doubled its consenting unit capacity because of that. So there's question marks there that need a solution. It's the same with the transport issues. The freight issue from Stornoway will be replicated right across the board. There's certainly examples in Argyll and Bute in recent times and Kathleen talked about our key roads. So they won't resolve themselves. I suppose it's up to us to find solutions to many of these different issues.

We haven't talked about every different issue. I am very grateful for those who have joined us as observers, not least our local Member of Parliament, Angus MacDonald, who I know has been doing a lot of work in and around social care. Whilst I can't invite observers to contribute, you've got us all in one place, observers, if anybody wants to discuss other matters later. But points around social care and how we act with one voice in relation to the UK Government around some of the regulation or the legislative changes that are required, not just in and around grid but in other areas, because we have talked a lot here about energy being the driver without actually any of us around this table having control over energy regulation and so on.

So I think that is a summary. Thank you for contributing. I think it's been a very healthy conversation, if a long conversation. I'm going to come to Martin for 30 seconds to tell us whether that two-hour conversation did justice to your report or not.

Martin Johnston

Thank you. It did. This is a stepping stone towards the future and it's been very helpful. We're all involved in CoHI. Obviously we're all involved in the Regional Economic Partnership. HIE, we intend to be the glue to bring everything together, so I expect to spend the rest of my career doing this. For a few years yet, I hasten to add.

Kate Forbes

Great. If before the next CoHI this has got your mind ticking on things that you really think need to come to the next CoHI as actions to agree to collectively, then please get in touch. But I think there was a lot of actions there, which will be shared out.

My tummy's grumbling, so I think there's lunch served next door. Thank you sincerely to everybody who presented, particularly Martin, Frank and Derek. We'll pick up with Richard Lochhead chairing after the lunch.

[Break]

Richard Lochhead

Good afternoon. I'm full of admiration of how you return from the sun outside to come to discuss and talk about digital connectivity this afternoon, so thank you for coming back in after that lovely lunch and the lovely weather outside. So I'm Richard Lochhead, Business Minister, and one of my responsibilities in the government is digital connectivity.

This morning, I was slightly late getting here as you may have noticed, just by a few minutes, because I was helping to launch the new satellite technology that's being piloted on the Far North Railway Line by ScotRail, which is super exciting. That is going to deliver consistent, reliable Wi-Fi connections on our railways going forward if all goes well with the pilots. I think I'm right in saying that six trains in the north are going to be piloting this technology, so it might not just be the Far North Line. But it's a big step forward and it's the first of its kind in the UK as well. So it's satellite technology using low Earth orbit satellites because - many of you may know this, but I'll just say it anyway. Of course, nowadays we have trains of satellites in low Earth orbit and therefore, at any one time, there's a satellite over you. That means if you're using that as your connectivity, it means that it can be consistent and reliable.

So we're going to have that on our trains hopefully going forward. As I said before, ScotRail supported by Clarus, a Scottish company from Bathgate who are deploying the technology - it's from Starlink, the technology - are behind this as well. There's about a quarter of a million pounds of public money going into it, from ScotRail, Scottish Futures Trust and Scottish Government. So it's exciting and hopefully it'll be a great experience for passengers on our north routes. Whether you're doing business or keeping the kids occupied with iPads or whatever and entertainment or whatever it is on your long train journeys, hopefully that'll be a lot more enjoyable going forward as we begin to deploy that new connectivity on our trains. It's not just trains we're looking at. We're looking at rolling that out across other public transport as well. So that's where I was this morning, so it's very topical for our meeting today and to discuss digital connectivity.

We have a number of presentations and speakers, so I just want to take you through how we're going to run this. We are delighted to be joined today by Martyn Taylor who's Chief Commercial Officer from Building Digital UK. Want to raise up your hand there? Yeah, that's Martyn there. Thank you. We've also got Stephen Hennigan from UK Government, Department for Energy Security and Net Zero. Is he with us as well? There he is. Yeah, thank you. We've got Adam Cochrane-Williams from Ofgem who's here, over there. We've also got David Speake representing Energy UK, who will be helping answer questions on issues as well.

Now at 3:00pm, because we're discussing digital connectivity, first of all, in terms of R100, reaching 100 per cent of population with broadband, the government's programme, and working with the UK Government over Gigabit and the rollout of that - we are also going to be discussing the switch-off of the Radio Teleswitch Service meters, which will be an item. So that will come up shortly as well. We also have, of course, have the switch-off of the UK's Public Switched Telephone Network, which is layman's language is going from copper to fibre for our telephones and connectivity. So we'll have separate opportunities to ask questions after each of those presentations if that makes sense.

I want to thank colleagues who are in the room who've travelled from London to be with us today. They've come all the way up. Just to say that, as Tourism Minister, this is very regular weather for Scotland and the sun shines 365 days a year. While you're here, make sure you spend lots of money before you go back to overcast, smoggy London later today. So you've picked a spectacular day to come to Strathpeffer and the Highlands of Scotland. But thank you very much for travelling from London to be with us today. It's really much appreciated.

So to kick off, I'm going to hand over to Robbie on my left-hand side, Robbie McGhee, who's the Scottish Government's Deputy Director for Digital Connectivity, who's going to give us a few minutes on the Scottish Government policies of R100 and our involvement in the Gigabit programme. So I'll hand over to you, Robbie.

Robbie McGhee

The quality of the Wi-Fi in this room and the quality of the 4G coverage outside, I think that probably reflects the overall trajectory for the Highlands and Islands, which is really positive. Now that's down to an awful lot of investment, some of it commercial, some of it from public sector over the past decade. But it's really, really driven improvements on all of the main connectivity metrics. There's an awful lot more to come.

So I was going to briefly highlight some of the progress that's been made through the Scottish Government's R100 programme and point the way to what's planned through Project Gigabit in Scotland. That's obviously a collaboration between Scottish and UK governments. That's really been at the heart of the development of Project Gigabit. Obviously, as the Minister said, we're really pleased to have Martyn Taylor from BDUK with us today to contribute to the discussion.

I'll briefly run through just a couple of slides just to highlight some of the impacts that we're seeing as we extend Gigabit networks across Scotland and across Highlands and Islands in particular. I think it's always good to start on a positive. So I'm sure many of you will have seen this year's Programme for Government, which was published last week, but I think worth pointing out that we exceeded the commitment that was made in last year's Programme for Government. That was to connect at least 20,000 premises through the three R100 contracts. We ended up delivering over 27,000 in total. So next time you get told that the public sector can't deliver infrastructure projects, that's a good example to point to.

If we move on to the next slide, this digs a little bit more into the detail of the R100 programme. As I mentioned, that's made up of three regional contracts that are being delivered in conjunction with Openreach. It's over £600 million worth of investment, vast majority of that in the north of Scotland across the Highlands and Islands. We have a voucher scheme as well that's supporting a range of suppliers to grow their networks.

Now in total the R100 contracts will deliver well over 110,000, connectivity to over 110,000 homes and businesses. Those are the ones with the slowest speeds in the country, some of our most challenging rural locations. But as you can see from the numbers on the screen, really significant progress has been made, over 82,000 premises connected so far and a big proportion of those across the Highlands and Islands. I think behind the numbers, a huge amount of infrastructure sits behind those, so 16 new subsea cables connecting our islands to the mainland and many, many hundreds of miles of [spine] fibre that'll make it cheaper and easier to deploy and extend broadband and mobile networks well into the future.

Obviously the R100 bill continues over the next few years. The North contract is due to run to 2028. But I wanted to briefly dig into Project Gigabit and the impact that that is likely to have, working alongside R100 and commercial build. So the next slide shows the five main strands of Project Gigabit activity in Scotland and the crossover with the three R100 contracts, so those R100 contracts are shown by the three different colours on the map. The North lot in blue is the biggest of those contracts and obviously covers the Highlands and Islands. The five Project Gigabit strands are numbered on the map and obviously outlined on the right-hand side. That comprises four new procurements that the Scottish Government have launched. The other is a UK-wide contract between the UK Government and Openreach. So this is a real joint piece with the UK Government.

We will be coordinating all of those suppliers, looking for opportunities to really push coverage further, to drive efficiencies and to drive savings that can be reinvested. I think that Openreach opportunity is a really significant one, so we obviously have an R100 bill planned with them that runs to 2028. The new Gigabit contract commits Openreach to delivering another kind of 65,000 premises across Scotland, many of them in the Highlands and Islands. Rather than Openreach going into an area and delivering the R100 premises and then coming back to deliver Project Gigabit, there's a real opportunity to join up planning, join up management of those to get Openreach to go into areas once and maximise coverage while they're there.

Clearly using the funding available across both contracts, we think we can drive a really, really good outcome from those. That sounds straightforward, but there's lots of work needed to allow that to happen. But that's the aim. It could drive a far better coverage outcome for the Highlands and Islands and allow both of those contracts to deliver more than the sum of the parts.

So beyond that, we obviously expect to conclude two other procurements impacting the Highlands and Islands in the coming months. That's on the back of onboarding GoFibre who were awarded the first Project Gigabit in Scotland contract earlier this year.

So I think if we could summarise the position, it's probably lots done, more to do, but I think we've built a really solid foundation for this next phase of activity. Probably more importantly, we've built a platform for digital transformation across government, across the public sector and across the wider economy that all of the Highlands and Islands and all of Scotland can access. There are obviously real opportunities for all of the organisations around this table to play a part, both in the delivery of the infrastructure but I think, more importantly, how we then leverage it and maximise the value that we get out of it. So I guess that's all I wanted to say by way of introduction, but very keen obviously on hearing views from around the table this afternoon.

Richard Lochhead

Okay. Thanks very much, Robbie. So I should say at the outset that I've been in parliament since 1999 and, of course, one of the benefits of today with Deputy First Minister and myself being here is not only are we here with our ministerial hats on, we're both MSPs for the Highlands and Islands area. So we've got obviously an insight as elected representatives, as many others do around the table, of some of the issues that concern the public. I used to be absolutely inundated by constituents demanding broadband connections. In recent years, that has slowed a lot. Still there with some people clearly and we'll discuss that. But it just shows you the progress we've made in the last few years alone. Clearly this is an economic development intervention of the Scottish Government, because a lot of the issues we're discussing, especially the next two issues in terms of the switch-offs, are very much wholly reserved to UK Government. That's why it's great to have UK colleagues here to answer questions and talk about that shortly.

My final point - just about to open up for discussion, you can ask questions - is that at 3:00pm to discuss the copper switch-off, we have Vicky Hicks from BT online. So we might have to break into this particular discussion just for that short while to have Vicky talking about that issue and then we'll come back to this if there's still more points people want to make. So does anyone want to come in and raise a point? Yeah. If you can all just introduce yourselves please, it's just helpful, and keep your microphones quite close to you. Thanks.

I think we have to be, first of all, mindful of where we are. This is the Highlands and Islands of Scotland. It is the most sparsely populated area in the whole of the country. Of course, it's going to be challenging cost-wise. We know that. We cover budgets that are challenged by the lack of population density right across the whole Highland and Island network. When you are inviting - when you're looking for investment in the Highlands and Islands, like we were talking about this morning, big investment, multi-multi-billion pounds of investment, I think that we need to consider just exactly how are we going to - what is the cost of connecting these communities that we're talking about investing tens and hundreds of billions of pounds when we then think that there's a challenge with a certain amount of connectivity cost to these communities? That's the first point I want to make.

The second point, if we're looking for development in the Highlands and Islands of Scotland and these companies will be set to make a fair amount of money, why can't we use that money or why can't we use the social investment that we were talking about this morning to be able to help provide the connectivity? I mentioned this morning about connectivity with our communities. It shouldn't actually - we should be looking at clever ways of how we connect these communities and clever ways of how we fund it.

I would suggest that the answer is actually in the question from this morning. We've got the ability to be able to use social investment charters and actually use the benefit that these companies are getting to be able to fund the connectivity for these areas. Ealasaid and Emma both said about communities would value that being a benefit to them from the fact that we are creating all of this energy. We will and are the powerhouse of the UK, but yet we are the most disconnected in the UK. Now that doesn't square for me and it doesn't square for our communities, so I would suggest that we really do have a good think about what we're trying to say here in terms of the cost of connectivity to our communities. Thanks.

Richard Lochhead

Thanks. Okay, I see there's a lot of people wanting to come in now. I'm just going to keep going until Vicky appears on that screen up there, because she's supposed to be here at 3:00pm to talk about the next item before we come back to this bit. If she's not there, I'll keep going. Heather, you want to come back in.

Heather Woodbridge

Thank you for letting me back in. I'm really enjoying this discussion, by the way. I just wanted to come back in and reflecting on - as Leader of a local authority, islands and rural areas, Highlands, looking at Raymond, it does cost a lot of money to deliver services in these areas. So what underpins that for us is transport connectivity but also digital connectivity. Having good, reliable, fast, digital connectivity makes it cheaper to deliver services in these areas.

Thank you so much for having me. I'm joining you from very sunny Essex. So where to start? So I head up the Digital Voice programme on behalf of BT Group. We are the largest home phone provider, although obviously there are around 600 communications providers across the UK. So we're definitely not the only one. We've been working on this since 2017. Not to teach anyone to suck eggs, I think the vast majority of you all know this is about moving people safely off of the Public Switched Telephone Network or the PSTN and on to a digital landline. That's because the analogue network is decades old, it's no longer fit for purpose and we desperately need to get our customers on to a network infrastructure that is more reliable and more resilient in the future. So that is what moving to a digital landline is all about.

In 2024, there was a 45 per cent increase on the number of faults on that PSTN network, so actually the need to get people off that network is ever more pressing. Obviously there are a lot of customers who are very reliant on the landline, so we've been working really closely with local authorities across the UK, central government, charities right the way across all of our countries to make sure that the awareness is out there. Then at BT we're looking to build additional support in. So everybody that is deemed vulnerable will get a free engineer visit, so we will send an engineer to the home to actually make the switch to Digital Voice for them. They also get battery backup solutions, so that is either a battery backup unit or a hybrid telephone that will keep them connected in the event of a power cut. I can take questions on that if anybody has specific questions.

Probably the most pressing thing to just mention is that the biggest risk of this switchover is to Telecare users, so that's people that use those healthcare pendants that they often wear around their neck or on their wrist. Many of those healthcare pendants are still reliant on the PSTN network or the analogue landline. So it's very, very important we know who has Telecare so that we can offer even more tailored support by - when we make the switchover, we can actually disconnect the Telecare device, reconnect it once the digital landline is in place and test that the Telecare device works before we leave that customer's property so that we can obviously make sure they're not left even more vulnerable than they are today. If that doesn't work, we can reverse the whole change and put them back on the PSTN until we've got a better solution in place for them.

Now the best way to identify Telecare users is via data sharing agreements with Telecare providers. There are hundreds of those across the UK, so we need a total of 278 data sharing agreements in place across the UK to make sure we know of all Telecare users. We have 257 in place today. The only two missing from Scotland are Hanover Housing Association and the South Lanarkshire local authority, so they are the only data sharing agreements we don't yet have in place in Scotland. Therefore people that have their Telecare provided by either of those organisations are at more risk today than they need to be. So if anybody here is able to support getting those across the line, that would be fantastic.

In the case that we don't get them all signed, we are launching a national Telecare campaign on 2 June backed by UK Government. That campaign will be seen across TV, radio, social media, out of home so hospitals, GP surgeries, post offices, that kind of thing, in the hope that we reach 96 per cent of adults across the UK with the campaign. The really simple call to action is, if you have a Telecare device, please let your landline provider know so that all of that tailored support can be put in place.

By way of a few words, that's probably all I was going to say, but obviously very happy to take any questions anyone has on the digital switchover.

Richard Lochhead

Thank you very much, Vicky. That's helpful to give us a briefing. I don't know if anyone's got any questions or observations they want to make or express in terms of the looming deadline for the digital switchover. Obviously as the deadline gets closer, there's going to be more and more coverage of this and there's been a bit of concern expressed in the last few months. I see Heather wanting to come in. Make sure you're close up to the microphone so Vicky can hear you.

Heather Woodbridge

Thank you and hopefully you can hear me, Vicky. I'm really interested - and you did offer to answer any questions in terms of power cuts and things like that, so I'd love to ask you. So I represent an area of 12 inhabited islands and we frequently have power cuts in the winter. It's guaranteed that this power's going to be off - it could be from 12 hours, it could be several days, depending if the island has a generator or not. I'm really quite concerned about the digital switchover, particularly for Telecare users and users with the pendants, because once the switchover's happened and it's digital, that means those services - what is the backup there? So I'm interested in your conversations about how you see Digital Voice working and how you see the solution there. Is there engagement around battery packs? What is the resilience element that you see coming forward in that work? Thank you.

Vicky Hicks

No problem, yeah. There's an awful echo. That's better. So we have an industry-leading battery backup solution. It's being offered by Vodafone as well. I think a number of other communications providers are looking into the same one, because it's the best in the market at the moment. We're always investing to get better. So the new [Battery Backup Plus], which we're offering our customers from this month, has a hibernation mode. So essentially what will happen is the landline or the broadband connection will be kept up and stable by the battery backup unit seamlessly if the power goes. It has a hibernation mode, so when that battery backup unit gets to about 25 per cent of power left, the device goes into hibernation mode, which means the customer can then physically take it out of that and use it when they need to make an emergency call so that the first 75 per cent of the battery will last a day or so and then it goes into that hibernation mode which enables us to see customers through prolonged power outages of two to three days.

Richard Lochhead

Okay. Thank you. I think Maggie wanted to come in. Just yourself, please.

Maggie Sandison

Yeah, Maggie Sandison, Chief Executive, Shetland Islands Council. I was really picking up the issue about resilience as well. Shetland did have a very prolonged power outage due to extreme weather event where people were actually without power for seven to 10 days, so I suppose my concern is that's not uncommon. We've had other storm events across the Highlands and Islands and across the north of Scotland where we see more prolonged than two to three days. It was challenging enough as a local authority to ensure our most vulnerable people were checked in on. When you can't move people because of deep snow, the landlines were absolutely essential in terms of connecting with staff who lived in the area that we could send on foot to visit households or checking in with neighbours who we could then send to check on the most vulnerable people in our community.

I have a real anxiety about how would we respond when we don't have landlines available to us? So I think that's something - I know that the Scottish Government have been looking in terms of the Resilience Partnership about what does this mean for future resilience response? But my concern is it leaves us in a much worse place than we've been in the past.

Richard Lochhead

Thank you. I think we'll take note of that and take it away with us. I think Raymond was next and then over to Pippa.

Raymond Bremner

Thanks very much. In terms of...

Richard Lochhead

Introduce yourself. Thanks [unclear].

Raymond Bremner

Oh, sorry. Hi, Vicky. My name's Raymond Bremner. I'm the Leader of the Highland Council. It's nice to see you here in lovely, sunny Strathpeffer.

Obviously where we are up here, there is a lot of - I would reiterate the concern in terms of the most vulnerable in our community, especially in terms of power outages. We can have that quite frequently in our areas. That in itself brings its own challenges to the vulnerable, the elderly and our young people in many cases. That's one of the first things I was wanting to raise.

The second thing is we already have 16 per cent of Highland residents here that don't actually have digital broadband and therefore the - I would consider that the switch-off would need to be programmed with regard to that. It would be good to understand if you've got some reflection on that, and also in terms of the national considerations of timescale for switch-off and the national consideration on the approach to resilience in the event of the power outages just as was mentioned there just now. Thanks very much.

Vicky Hicks

Yeah, no problem. So on the point of power resilience, our battery backup unit is the best out there. It's the best available today. I appreciate what you're saying, it's not going to be good enough in seven to 10 day power outages. I definitely think that's one we need to take up with power companies on how we restore power quicker. The Ofcom guidance is that communications providers have to provide battery backup devices that keep people connected for the minimum of an hour, so this far exceeds that. So we just need to make sure that the best battery backup unit available is being used consistently across the industry, which I think we're getting there.

Your second point, sorry, can you just remind me what your second point was? Oh, it was around people that only have a landline.

Raymond Bremner

Yes, that's correct.

Vicky Hicks

Yes, sorry. I just remembered. So on the BT network, we have around 600,000 customers across the UK that only have a landline, whether that's because they choose not to take broadband or indeed it could be because they still live in an area that actually can't get a broadband connection that is stable enough to be of use to anybody. So those customers will not move to Digital Voice, because they can't. We'll move them to something called the Dedicated Landline Service. That enables us to put them on a partially digital service. So what happens is we'll send an engineer to the local telephone exchange. They will make a change within that telephone exchange that makes that landline partially digital. But for the customer, it's no engineer visit, no additional equipment, no change whatsoever to the way that they use their landline, aside from the fact that they will have to now dial the area code for every call they make, even if they're phoning their next door neighbour. We'll write to all of our customers, explaining this to them.

On the day that they switch to this partially digital service known as the Dedicated Landline Service, they will be without their landline for up to a one-hour period. So we will tell them, keep your mobile handy, or if you don't have one or perhaps you live in an area where you don't get mobile coverage within the home and you're particularly vulnerable, it might be a good idea to have someone with you that day so that you're not on your own.

That's how we'll support those customers. That is a temporary solution. It sees us through to about 2030, so we've got a number of years to work through what is the best solution for customers that still don't have broadband when we get to 2030 and how do we keep them connected to a landline?

Richard Lochhead

Okay, thank you. Pippa.

Pippa Milne

Thanks, Minister. Pippa Milne, Chief Exec of Argyll and Bute Council. It's largely the point that Maggie made, so I won't go over too much again. But those storms, we were similarly hit with five days. There was a do not travel, so our staff's ability to respond was impacted, where there was no mobile signal because a lot of the mobile masts went down. SSEN largely relied on text notifications to let people know where food vans and other support is. So it's a real plea to liaise with both the resilience network in Scotland and with providers like SSEN, because I think there is a real challenge of how we deal with those issues, both for the vulnerable and our ability to respond and support them when we have no communication methodology. Then that's added to when we add in trying to communicate with remote islands where there are really limited options and we physically just can't get there. So I think that that is a real concern about the constraints that this will put on us. Thank you.

Richard Lochhead

Okay, thank you for that. I think next was Paul.

Paul F Steele

Thank you very much. I agree with a lot of what my colleagues have said. Resilience is a huge issue. My question was going to be about the Dedicated Landline Service. Is there a need for people to sign up to that or will that just happen automatically? Then in a previous conversation, we were talking about the one per cent who will not be receiving fibre in the future and, by 2030, will not be getting a copper service. So you mentioned you're going to be looking into that, but how will that manifest itself on the ground, especially in rural and island settings?

Vicky Hicks

Yeah, thank you for your question. So Dedicated Landline Service, people don't need to sign up to that. We can really clearly see who only has a landline solution into their property. That'll be offered to all 600,000 of those customers in due course. We'll start our rollout of that in the summer, later this summer. That'll probably take about a year or so to work through all of those customers. So no one needs to sign up. We'll be in touch in due course.

To answer your second question around - let me just remind myself what that was. That was around - sorry, can you repeat your second question?

Paul F Steele

I can't remember what - no, I do remember. In our earlier discussions, we were talking about the one per cent who are not going to be receiving fibre in the future. What will be done to support them if you've got a 2030 cut-off for this solution?

Vicky Hicks

Yes, so 2030 is the cut-off for the partially digital service. What we will need to do by then is work through what does the future of the landline look like? After that, I don't know honestly know the answer. It could be that maybe we offer a landline solution that uses the mobile network. So I'm just thinking about my grandparents. They're both in their 90s. If they could use something that looked very much like a landline telephone but it actually used the mobile network, that might suit them, for instance. They don't want a mobile phone, but if they had something that looked really familiar, they don't really need to know what technology it works over as long as it looks like something they're familiar with and it works. So that could be one solution. Or it could be that we just get customers on copper broadband. So it doesn't matter that they won't have fibre, but as long as they have copper broadband, then we can still offer them Digital Voice.

Richard Lochhead

Okay, thank you. Oliver.

Oliver Reid

Oliver Reid, Chief Executive, Orkney Islands Council. I think you've touched on a number of the things that I was going to pick up on. But I suppose just for explanation, North Ronaldsay, for example, doesn't have a broadband connectivity other than through a data signal, so there's no physical connection. The only physical connection is a copper line and it sounds like your data might continue through that for a period of time. But what we found was that when the power went off in North Ronaldsay, the only way we could get notification of that power being down to the rest of the community was through a physical landline signal. So there is real, huge concern about the idea that that just disappears without something equally robust being in place.

I also have concerns about the idea that the answer to maintaining your power supply is very vulnerable people, who are in receipt of Telecare, having to manage their battery packs and know when to unplug them and plug them back in again and being capable of doing that within a matter of hours when we know that they're going to be out of power for days and that the signal actually might not reach the other side because there's no power there either. So I think the vulnerabilities are really quite acute in certain communities. But I think that just reflects what the conversation has been.

Richard Lochhead

Okay, thank you. Is there anyone I've missed who wanted to ask Vicky a question or make a point? [Pause] No. Vicky, is there anything finally you'd like to say before we let you go and I conclude?

Vicky Hicks

Only for my plea for help for those last two data sharing agreements, if anyone can help me with, let me just remind myself, Hanover Housing Association or South Lanarkshire local authority. They are the only two providers across Scotland who haven't shared their data and are putting Telecare users, that they provide Telecare to, at risk. So if anyone's able to help me break through with engagement in that area and get those across the line, that'd be very much appreciated. But thank you for having me, thank you for the time and have a great afternoon.

Richard Lochhead

Okay. Well, listen, Vicky, thanks very much for giving us your time today and doing your best to answer the questions and giving us an overview of where things are at the moment. I think what you've heard from the representatives of the Highlands and Islands around the table today is that there are some specific challenges in the areas that we all represent, which obviously you've heard about today, which are probably a bit different. There's [certainly] more vulnerabilities compared to maybe the rest of these islands, so maybe something we can take forward after today and gather all these issues together. Obviously there's a lot of issues that have been mentioned that we need to perhaps ensure that everyone's in the same loop and that they're being addressed. So there's a wee bit of time left, but we want to make sure there's not too much anxiety out there.

I think both the Deputy First Minister and myself represent lots of Hanover housing developments, so maybe we'll take that message away and you can come back to us on that in due course. But thanks very much for your time.

Vicky Hicks

Thank you. Thank you for having me.

Richard Lochhead

Okay, I'm really glad that worked, because I was very nervous about an online session in the middle of a connectivity agenda item. But it all went well. Yeah? Everyone's nodding. Fine, it went well, good. Thanks for that.

Right, I'm trying to juggle various guests we've got here and agendas. So the next item is the switch-off in the energy sphere, so I think we're going to kick off with my Scottish Government colleague, Jake Macdonald, who's going to speak to us about the RTS switch-off. Jake, you're from the Scottish Government's Energy Consumer Policy Lead, so thanks for being here today. Do you want to just give us a quick overview? Then we'll take it from there.

Jake Macdonald

No, I think that's it working now. Thank you, Minister. So I'm hoping that many of you already know what the Radio Teleswitch Service switch-off is, but essentially RTS is a type of electricity meter in people's homes, which is operated by the longwave radio signal. The BBC operate that signal and it has come to the end of its operational life. It will be switched off on 30 June this summer. Customers who use the RTS typically use it for time-of-use tariffs on expensive electric storage heaters. If we don't have solutions in place for those consumers, there is a potential for there to be a considerable impact on households and businesses, particularly vulnerable households in the rural and island areas, many of whom are off the gas grid completely.

In terms of the powers and responsibility for the switch-off, it's a fairly complex picture. Energy infrastructure is reserved to the UK Government. That includes the RTS switch-off. This is an industry-led initiative and we've got David online. The actions of suppliers are regulated by Ofgem, so I'm glad Adam, Stephen and David are here to help me answer questions today.

Progress so far has been slow. I think everybody would agree with that. It has been too slow. There is a considerable number of properties still to be upgraded in the Highlands and Islands. A disproportionate number of those are in communities that many of you will represent.

In terms of the impact that this will have, there is, to some extent, a bit of an unknown around what the impact will be when this eventually does switch off, but I understand Energy UK, Ofgem and others have been working on the technical solutions to make sure that there is no consumer detriment experienced. Our role in the Scottish Government has been to raise awareness and we have undertaken a considerable amount of engagement over the last year. That started with the current Acting Cabinet Secretary for Energy and Net Zero, Gillian Martin. We wrote to suppliers and we contacted local press to try and raise awareness. Following that, there has been several ministerial-level and official-level engagements with UK Government, Energy UK and Ofgem. We have, at all points, tried to find the right balance between holding our colleagues to account and working very constructively and collaboratively on the switch-off.

Yeah. Thanks, Adam. We don't talk in terms of excuses to not help out. You're quite right. We've been working on removing the final technical barriers to fitting smart meters in all these areas for some time now. Pippa's quite right. There's a difference between what suppliers are told by the DCC in terms of coverage of a particular area with their signal and the reality when we turn up on the doorstep. Quite often in a lot of cases when we've been trying to do RTS in the area of Highlands and Islands, we've had to walk away empty handed, if you like, given that we weren't able to commission a smart meter on the day.

What Adam's described is a very, very useful - we'll call it a workaround, but it's an alternative to using the type of communication signal we've normally been allowed to use for DCC comms in the north and Scotland, and we're switching it over to using a different one. To be clear, that works very well, because you've got two different elements. You've got an electricity meter and a comms hub which bolts onto the top. It doesn't really matter what comms hub you use, apart from contractually. We've managed to get around the contractual restrictions there. So we are now going and using mobile telecommunications to connect these meters to the Smart DCC where beforehand we were not able to do so.

Now noting that we've had lengthy discussions earlier in the meeting about the lack of mobile comms in some [areas], we do then have one further fallback option which is suppliers have been working with the manufacturers of their meters to get them preconfigured at the factory, which is not something we normally do. But we can preconfigure a small number and keep them on the vans as we visit properties so that even if we can't get any signal whatsoever, we are still able to install a meter that's got a time-of-use tariff built into it, because we've set one up before we've turned up to the property. Then over time, as either the mobile signal or the DCC standard signal up in the north and Scotland, when that is built out and we can access it, then we can go and commission that meter properly so that there'll be permanent, ongoing two-way communications with the meter.

Richard Lochhead

Thank you. That's obviously a pretty serious issue that we'll also have to pursue at Scottish Government level as well. I saw a few hands, sorry, coming up. Did somebody put their hand up over here? It was yourself next, yeah.

Maggie Sandison

Thank you. Maggie Sandison, Shetland Islands Council. I'm really pleased to hear about the fact that it won't be a hard stop. I think that's been really concerning for our community. Again I think we're experiencing - [like] the Western Isles, we're off-grid areas, so gas just simply doesn't exist. So our householders are predominantly using RTS unless they have oil, so we've really seen a challenge around the engineering capability to meet the demand for smart meters. I hadn't heard about the solution, because we have many stories of people having engineers turning up with them being told that they can't have their new smart meter. So I'm really pleased to hear that information. But again I don't think that's been shared more widely, because we can get that information back out into our communities to make sure that people who thought they can't switch can now push to get their switch.

I suppose what I'd be really keen to see is a safety net for householders that essentially this is the responsibility of their energy supplier, so they should not be left with a higher rate of energy for something that they used to get a lower rate of energy for. So my view would be that if the energy supplier can't meet the requirement to switch the meter, all of their electricity should be provided at the lower rate. That would give the incentive to get the change to ensure that they can be properly metered.

I think it's really important we have a safety net for householders. There's a good reason that some of these people haven't requested the switch. They're probably older householders who haven't seen some of the messaging. We're pushing it really hard in Shetland, but we know we have a really big backlog and we know that there will be individuals - and we're asking family members and all sorts of things to follow up for different most-vulnerable households. We're getting information out through our care teams and things. But actually I think - I'm really concerned that it will be the most vulnerable people who haven't had the ability to switch and haven't followed up and haven't kept chasing for an engineer appointment, so let's make sure that they get the lowest rate of energy for every unit rather than being switched to the highest.

Richard Lochhead

Okay, I'll take a couple of contributions, then we'll come back to our guests to maybe give us a couple of answers. I think Andrew was next.

Andrew Thin

I just want to take this [in the round]...

Richard Lochhead

Introduce yourself.

Andrew Thin

Sorry. Andrew Thin, Chairman of the Crofting Commission.

I talk to a lot of crofters and a lot of other people actually around the Highlands and Islands. I think this conversation underlines the value of CoHI actually. I don't doubt that all these people we're hearing from are trying very, very hard from the perspective of where they're sitting. We're sitting in a different place with different perspectives. But what I'm hearing is not just that people are worried about things being switched off or things not connecting. They're losing confidence in the use of technology to do things. That's serious for our economy, because Stuart Black and Alistair and HIE in general have worked really hard over the last 20 or 30 years to drive this idea that the Highlands and Islands economy can fly on the back of technology. Now people are saying, I'm not so sure, I can't trust it, it'll probably get switched off or someone down south will forget to switch me off. So that's a serious worry. It's undermining confidence in these technologies in the Highlands and Islands. That will undermine our economy.

The second thing that's happening is that there's a growing sense on the back of this of being the politically left behind. That is damaging, too, and dangerous. So I do not doubt that people are trying very hard, but I hope the message is loud and clear that we need to try harder at this. Ofgem in particular, who have some clout in this, needs to try harder.

Richard Lochhead

Thanks, Andrew. Powerful points. I think Sarah was - you're next.

Sarah Compton-Bishop

Thank you. Just to build on some points that have already been made, absolutely agree about the confidence element and I'm conscious about the narrative around digital health solutions. We get a lot of resistance against that already, so building on that point, I think it's going to be really important that we re-instil that confidence. Again, sorry to repeat, but I think there's an opportunity for us to do some very helpful comms for our HSCPs if we know exactly what we're saying. So I think more information about the phased switch-off would be really helpful, about what the alternatives are, I suppose partly so at least consumers know what they should be asking for. I think that's going to be helpful and we can take that back into our partnerships. Just in terms of your feedback, really great to hear that you can take some feedback from today.

Just to build on the point that Paul made around the islands, it's not just the Western Isles. It's the islands all around the west and the north of Scotland. We're coming into the summer season, which means no bookings on a ferry. So if people are thinking about how they're going to target the hardest-to-reach islands, they're going to need to factor in ferry availability in that as well. Thank you.

Richard Lochhead

Okay, thanks. I'll come up to Derek. I think you were next.

Derek Brown

So actually Maggie said [unclear]...

Richard Lochhead

Introduce yourself.

Derek Brown

Yeah, I'm Derek Brown, Chief Executive, Highland Council. Maggie mainly covered everything and more that I was going to say, probably did it a lot more eloquently than I was going to, but I've got a couple of things just to chip in. Just as a sort of theme that's running through this, what we know is that the delivery of projects and public services in rural areas is extremely difficult. What we're hitting here is a number of parallel projects which are coming on-stream or off-stream at similar times and are difficult to actually implement because of rurality, because of geographical sparsity, because of population sparsity - geographical expanse, population sparsity. So I think I would just ask everyone from a UK Government, Scottish Government perspective just to reflect on the fact that that digital divide is just symptomatic of just generally the challenges that people have living in rural areas and the difficulties that people have in reaching them and the importance of not leaving these communities behind. So that's the first thing I wanted to say.

I'm not particularly sure these things are necessarily turned into sort of funding [consequentials] generally for local services. I just again want to make that point. I think if we're going to be facing anything, communication becomes critical, so whatever the plan is for communication, very important that that's transparent.

In terms of risk assessment - and I have this point for the last two or three items. I'm not entirely clear what actually was done in terms of risk assessment, who was involved in it, what kind of exercise it was and how locally connected up it actually is. I think a bit of transparent sharing of that information would actually help with your local partners.

I suppose my last point - and this was really the bigger thing just even going back to this morning - it's great that UK Government and Scottish Government are having conversations, but we've got a number of parallel areas of activity here across things like grid connection, energy developments, digital kind of expansion, digital switch-off. I think that actually what I think we would benefit from in terms of local partnerships is that connection up at that intergovernmental oversight with local planning towards implementation.

You've got some great examples of it in Scotland, so I'll give you the example of - there are people actually here from the Scottish Civil Service who are involved in the Growth Deals for our local Inverness and City Region Growth Deal. If the same principles were applied to intergovernmental oversight for some of these other bigger things we're trying to do, bearing in mind the scale of what we're trying to accomplish, I think it would actually help with things like this. Here what we're hearing is two or three projects, which are critical, need some oversight and some transparent communication. That was just my suggestion. But other than that, I agree with Maggie.

Richard Lochhead

Thank you. I think I'll allow our guests to come back in and respond to some of these really powerful points. Maybe you can address the issues over safety net and also there's issues around communication and there is the question over risk assessments. Obviously, you're hearing a lot about concerns over vulnerable people, particularly in the Highlands and Islands because of the disproportionate impact here and the unique challenges. So, I don't know who wants to go first. Ofgem maybe and then we'll come back to David or...

Adam Cochrane-Williams

Yeah, I'll come in quickly on things that Ofgem is doing currently. So first of all, on the point about safety nets and people being worse off, so we are updating supply licence conditions currently so that basically if people are still on an RTS meter at the point the signal's switched off, then the suppliers are in breach of their licence conditions and therefore open to compliance and enforcement action. We're also looking changing licence conditions so customers have to be put on an equivalent tariff. But actually, having a smart meter on your wall does actually open up options for cheaper tariffs anyway, so by getting more people on to smart meters, that is one way of avoiding detriment.

Another thing we're doing to ensure people aren't worse off is we're tapping into the voluntary redress fund which is where the companies we regulate - if they pay into this in compliance cases to avoid enforcement action, that fund is used to fund various projects. We got an agreement to use that fund for households who need remedial works done to get the RTS meter replaced, so if that means a bit of re-wirings needed or a meter needs to be moved, then that will be done at no cost to the householder. That is still the governance and the framework. We're working with Energy Saving Trust on how that gets administered, but that's another thing we're putting into place.

We're being very clear in our conversations with suppliers, particularly around things like appointments, that they need to make sure the resource is in place, because this is their responsibility to get this done. My Director is having weekly conversations, particularly with the likes of Ovo and ScottishPower, on making sure that they are meeting the demand for appointments, because we are hearing from - whether it's consumer groups, councils, housing providers, that, yeah, the demand is not being met. So those are conversations we are having at a high level and that are coming up at the ministerial meetings that we're having as well. So those are the things that - the [deregulatory] levers we're able to pull. We are doing all we can to make sure that RTS meters are being replaced at pace, but obviously they're clearly not being replaced quickly enough, but also putting in mitigation to make sure that we can mitigate as much detriment as possible when a signal is switched off.

Richard Lochhead

Thank you. Just before I bring David, I think Oliver wants to come in.

Oliver Reid

Yeah, thank you very much for letting me come in. Actually, you made a point there - and it's very reassuring to hear all of this actually in terms of the work that's going on and also some of the advances in technology and abilities to use smart meters differently so they can connect. But you made the point that they offer access to better tariffs. We're in areas or we represent areas where people are using an awful lot more electricity. Currently they don't get access to those tariffs, so they're paying £4,000 a year to heat their house as opposed to the nominal 2,000 or so or more.

I'm concerned that all the focus is on RTS and when that is resolved - and it should be and it has to be, because that's where the greatest vulnerability is, then the suppliers will disappear and leave behind a whole host of people who are on lists, looking for smart meters, because I've been told for two years I can't get access to a smart meter. I have a 4G mobile signal and fibre into the house, courtesy of R100, but I can't get a smart meter. There are lots of houses in that situation. The danger is that we perpetuate an inequality in these communities where vast numbers of people don't get access to smart meters, even though they're asking for them and they're in contact, because all the impetus has gone away after the RTS is resolved. So if there's any reassurance about the continuing rollover to smart meters in our communities, I think that would be really valuable for people who are in those kinds of positions as well after we've resolved the RTS situation.

Richard Lochhead

Sorry, are you coming back in there? Because we can't hear you.

Adam Cochrane-Williams

Sorry, I was just saying on the smart meter, the wider smart meter rollout, did you want to come in on that?

Stephen Hennigan

Yes, so I'll just introduce myself. I'm Stephen Hennigan. I work in the Smart Metering Implementation Programme in the Department of Energy Security and Net Zero of the UK Government. So first thing to say, this is an absolutely core priority of UK Government ministers as I'm sure it is for Scottish Government ministers. There are very regular meetings, whilst this is industry-led rollout, industry-led RTS rollout as well, this is something that UK Government is incredibly - is an absolute priority. We are thinking about how best we can support the exchange of RTS meters. Adam has talked about certain obligations that are on the industry. We basically all have the same goals. We're all trying to achieve the same thing. To your question, Oliver, was your point about in particular in the last few years about prices going up so much and people not - on the Highlands and Islands, but in islands in particular, not getting access to mains gas and therefore electricity is more expensive. Is it that kind of change over the last few years?

Oliver Reid

No, it's more the fact that they have to pay the peak rate all the time, because there's no access to an overnight tariff, an EV tariff, whatever it is, £0.07 a night for seven hours. None of those options that are available to the rest of the UK are available to people who don't have a smart meter and so you're constantly paying the £0.27, £0.28. In fact the standing charge up here is higher, because allegedly all the electricity comes - instead of from the turbines around us, it comes from Battersea or something. So actually there's just a mechanism where the communities feel very vulnerable. But my concern is that all the focus of the providers will be on getting us over the RTS and then they will leave. They won't come back again to these communities. They won't deliver the smart meters, that are not RTS linked, they're just the normal meters in people's houses that would then allow them to access tariffs that would be better.

Stephen Hennigan

Yes, well, as you'd expect from someone like me working on the programme, I'm absolutely strongly in support of the use of smart meters. A couple of things that I would say is the fact that RTS - why it is a problem, it is an issue. It is being resolved at pace at the moment. There are a very significant number of meters that will be replaced as part of the RTS programme that will solve the problem for quite a few people. But you're right. We can't take our eye off the ball and then just kind of withdraw.

That is why we are making sure that we are doing everything we can to maintain the pressure and learn the lessons from the RTS rollout that is spread around to the Smart Metering Implementation Programme overall. So they're things like incentives, the communication with customers, the lessons are learnt to make sure that we are not withdrawing, we are making sure that every customer is offered a smart meter. Whenever there is communication issues about - maybe there's some people who are less interested, other people who can't get an appointment. That is not acceptable at the moment when it comes to the RTS replacement rollout and that those lessons need to be learned for the wider implementation programme.

Richard Lochhead

Great. Thank you. I think what we'll do is just bring this to a conclusion and maybe ask - David, were you going to come back in on any of those points briefly before I round things up?

David Speake

Yeah, thank you, I can do for 60 seconds. I think just to ride on the back of what Stephen's just said and maybe, Oliver, to put it more plainly, the RTS activity that suppliers are undertaking right now is proving to suppliers and to industry indeed that these areas are reachable and the smart technology can be used much more than it ever has been in the past. The latent demand that I think you're describing for the non-RTS households is not something that will just be put to one side and forgotten about once the high-priority activity for RTS is concluded.

By the way, I would expect that we are - we are at a point now we're doing more than 1,000 RTS replacements a day. That's up from 1,000 a month a couple of years ago, so there's some positive news here. I'd expect it to increase even further beyond that in the next two, three months and then probably start to dip down a little bit after that as we get to the final customers who maybe are slightly more reluctant to come forward. We have to work hard on getting them across the line as well. So there's capability as well as capacity to bring those what you might call more discretionary smart installations forward as we go through towards the end of the year and then into next year. They absolutely must be served by suppliers from this point onwards now we've proven that it's doable with the technology we've got available to us.

I'll just round up, I think, on some of the concerns on two things that I picked up earlier. I think Derek and others pointed out the importance of communications. The communications element of the phase-out activity that we've got in plan is a live topic. We are working through it right now and we understand fully exactly how important that is to be sharing the way this is going to happen. That's because we're already getting customers who are expressing their concern that their appointment is falling in July rather than before the 30 June outcome. So we need to address that urgently and that those comms and messages will be shared with all our partners in these areas as soon as we possibly can, certainly in the next couple of weeks.

Then on vulnerability and the risks of switching off, let me just describe, I think, the pre 30 June status and the post 30 June status. Pre 30 June, suppliers are booking appointments into their calendars and getting installation workforce to the doorstep for those customers who [ask it] for us. After 30 June, we know that we'll start to see an increasing number of customers coming forward because they've started to see an impact on their heating and hot water. That demands a different response. That demands a much quicker response and getting out there in a reasonable timeframe that may be hours, certainly within a day or two. That's why the priority for getting to the customers in these Highlands and Islands areas is so high, because actually getting to them quickly when something's happened to their heating, hot water is much harder than it is if you're just booking a standard appointment in to them.

So all those elements are taken into account when we start planning the phase-out activity so that we have as few customers as possible that would be in that position that would need to call us out at short notice to go, as we say, try and find a ferry booking, try to find accommodation in these areas in all the island groups.

The last point on vulnerability, heard loud and clear and really appreciate the support that we are going to need in those areas where we simply have not been able to determine that the message has been delivered to certain vulnerable customers. We'll be turning to local partners, charitable organisations, local councils, housing associations, neighbours, anyone we can to make sure that they are over the line and they know that they need to be talking to us to get an appointment sorted out before their phase-out activity takes place.

Richard Lochhead

[Inaudible] to a conclusion. So a number of powerful points were made. I think it's good that UK Government colleagues and Scottish Government colleagues are in the room here together. There's a lot for us to take away and reflect upon and then speak to again with Ofgem and colleagues about some of the points made. I don't think [unclear] myself enough and it's been really helpful from my point of view to hear about this.

Sorry, could I briefly - so just...

Richard Lochhead

Just introduce yourself again.

Martyn Taylor

I'm sorry. Martyn Taylor, Building Digital UK. I just want to take onboard the comments you've made about the last one per cent and the concerns around that and just to say that, just really clearly, these people are not being forgotten about. It is we don't yet have a clear solution for them.

But I just want people to take heart from the fact that in 2019 just six per cent of the UK had gigabit-speed connectivity. Now it's at 85 per cent and Scotland's at 82 per cent. In the next five years, we're aiming to get to 99 per cent or as close to 99 per cent as we can. That includes in Scotland as well. In Scotland alone, we'll be - and that's obviously a combination of subsidised and a huge amount of commercial build as well. R100, the additional premises, that'll be delivered over the next three years. Project Gigabit, another quarter of a million subsidised premises to be delivered over the next few years. It's a good news story. It's transformational for communities here in the Highlands and Islands and around the UK, so please do take heart as part of - that was what I just wanted to speak really...

Richard Lochhead

Well, thanks very much for that optimistic note. There is a lot of good progress and good news. There's a lot more to come, I'm sure. Obviously, a constant dialogue we have with UK Government is the UK percentage is quite often a bigger percentage than Scotland, so we have to always reflect that and to make sure that we try and push that extra mile. But yeah, there's a lot of progress being made. In Scotland, we've gone from 18 per cent full fibre to, what, 95 per cent now across the country. But in terms of the remaining five per cent, we've also got to be conscious that that's - in certain parts of Scotland, it's still a bigger percentage than five per cent, so we've always got to keep things in context. So thank you again to our guests who've attended today. I'm just going to hand over now to Deputy First Minister to give some concluding remarks.

Kate Forbes

Thanks very much and thank you all. We are at our last agenda item now, you'll be pleased to know. I wanted to touch on actions and then next steps and then a final matter. So actions will be circulated for comment by the secretariat team to - in my calculation, we have some actions around the skills plan between now and the next CoHI with an interim update that will allow those that are responsible for responding to any recommendations to actually respond to recommendations so that by the next CoHI we have, hopefully, recommendations and responses to discuss. Thanks all for your involvement in that.

The second one was around this housing grid. Just light touch. It's not to sort of create a whole cottage industry of reporting on housing. But I do think it's an interesting means of escalating common issues. I touched on some of those earlier when I was summarising.

There were some specific requests on housing around funding flexibilities, NPF4, et cetera, which I know we will have captured which we'll feed back to you. There was also a request around getting SSEN and/or NESO to attend a future meeting.

That was the sort of high-level points that I had identified as actions. There is obviously an opportunity at the next meeting to consider specific issues. From our conversation, I had honed in on something in and around transport as an enabler or key transport in terms of key transport pressure points perhaps. It's just an option. Social care, I am conscious that we didn't discuss that today, but it's obviously challenging and not least with some of the announcements today around staffing. But whether that's linked with just the general provision of public services - and childcare as well. That was my sort of pitch for issues. But I'm going to give 10 seconds - I'm not saying anything - to see if anybody wants to add anything else. Let me guess. Kathleen.

[Laughter]

Kathleen Robertson

Sorry, yeah, me again. I've had conversations with some of the Highlands and Islands leaders. We were just wondering, using [UHIB] as a vehicle for lobbying more than anything else, but we obviously have the Strategic Timber Transport Network. Certainly in Moray we've seen some real improvements to our road structure on the basis of it. Most of us have distilleries and some have salmon in their constituencies and wards. We were thinking it would be good to lobby Scottish Government and also more importantly UK Government, because obviously the monies that these industries are taking in and paying, we're not really seeing much reflected back locally. Just wondered if there was an opportunity to get some community wealth building discussions on a more national [stroke], even international level because a lot of these companies are now owned by overseas companies. The excuse we get from the distilleries is obviously, well, we're paying all our taxes. But we're really not getting anything back.

We would be looking to - you would take some of the heavy-goods vehicles off the roads and enhancing, for example, in my area, Buckie Harbour so that we can bring in off the road. But equally if we can't use the harbour, then we need to be taking some of the infrastructure and the roads repaired, because these lorries - there's grain lorries going up and down, then there's the whisky going down to be bottled. There's a lot of heavy road industry, which we're struggling to keep on top of. We're needing improvements on some of our main other roads. We've mentioned the A9 and the A96, but there's things like the A95. These are all needing improvements, so I'd be grateful if collectively we could do some kind of lobbying through yourselves to UK Government to see some money come back into the area.

Kate Forbes

The A82 as well.

Kathleen Robertson

Yeah, absolutely.

Kate Forbes

I wonder if we did a session then on - you talked about community wealth building. Earlier Heather made a point, which stuck with me, around communities. It's about investing in infrastructure. I asked Pippa this question, when I was visiting, around regeneration and the best way of deploying public and private funding in a particular locality, so I was very chuffed in this year's budget that we managed to see a significant increase in regeneration funding for the first time in a while. But there's maybe a question of bringing that all together. I don't know, Kathleen, if that's too far removed, but we could do it under the heading of community wealth building, maybe some update on the legislation but also around regeneration and where the private sector contributes to that regeneration. Maggie.

Maggie Sandison

If I could just add in - sorry, it's Maggie Sandison, Chief Executive, Shetland Islands Council.

I think the community wealth building theme really makes sense. When we were looking at the regional transformation opportunities, how that could generate a scale of community benefit from new energy, from offshore wind or onshore wind, and how that gets used - because I suppose we're beginning to see a real concern that community benefit is going into community and actually if you want to transform communities, it's the things that local government does that really transform communities. If we had an income stream that was guaranteed over 30 years, we could frontload the change that communities see, which again I think is about taking communities with us, which is the conversation we've been having today. If you could let communities see real benefit from the development that happens in their community early on, then I think you can get a level of buy-in. But at the moment, community benefit is stretched out in a way that it's trickling into communities and not transformational in any way. Thank you.

Kate Forbes

Thank you. I'm sure we could make this into quite a substantial piece then, local authority led. I have an interest as well, which is just to throw into the mix, but VisitScotland are very kindly working on a piece of refreshing the strategic infrastructure plan for tourism and congestion areas. It's linked with generating revenue streams, because obviously there's opportunities there. Having convened a mini meeting/conference a couple of weeks ago with many of your representatives, I think they're now working on an updated plan. So it might be good to bring that to CoHI, not least because it will be after the summer holidays. Great. Okay. Anything else? [Pause] Great.

Okay, so I can't remember if I said it already, but we are going to be in North Ayrshire in autumn 2025. So we look forward to that. Thanks for your hospitality in advance. The secretariat will be in touch to confirm the date. As always, if anything springs to mind in the intervening period, then please let me know.

The last piece I want to address is to thoroughly and totally embarrass Alistair Dodds who is not expecting this at all, because this is Alistair's last Convention of the Highlands and Islands. If ever anybody embodied the Highlands and Islands in one person, it is Alistair. Many of you will have known him for many, many, many years, which is not to suggest he's old, but he has been working in the Highland public sector for decades, senior management positions in the Highland Council over 18 years, Chief Executive for over six years until August 2013. Joined the board of HIE in April 2014, so not much of a retirement there, and appointed Chair in May 2020. In April 2023, the Scottish Government reappointed him for a second three-year term.

When we look at some of the opportunities that we discussed earlier today, I know that Alistair has been instrumental in his leadership role of bringing together private sector, third sector and public sector. I know having spoken to many, many, many people, how much they have valued his leadership over the years. I always think it must be true if a third party tells you. So we're enormously grateful, Alistair, for your leadership as Chair of HIE most recently but spanning your career. The purpose of my commentary is to embarrass you to such an extent you don't forget just how grateful we are for all that you have done, and wish you enormously well with whatever comes next, but based on your track record, I imagine there won't be much of a retirement either. But I wonder if you'd all join me in just thanking Alistair.

[Clapping]

Alistair Dodds

Thanks very much, Deputy First Minister. I used to like you.

[Laughter]

Alistair Dodds

But I think - well, I really enjoyed my long years working in the Highlands and Islands. I think it's been a fantastic opportunity. It's a real privilege as well. Things have moved forward. You do see the benefit and the purpose of CoHI and the Regional Economic Partnership with this afternoon's discussion that there are people that still don't understand that the Highlands and Islands are a part of the UK and an important part of the UK. That five per cent they keep talking about as if it's just a little bit at the top, it's a whole set of communities and it's so important. So I think the work that you've led, the work that all my colleagues here have done I think is really important for what we are.

But can I just thank you for your kind words? They are very appreciated. One or two people asked me today would I make a big effort and be as obnoxious as always? But the advice I got from my wife before I left this morning was, just take it easy, be cool, don't disappoint everyone at the last. But just thanks very much to everyone. I do appreciate it.

Kate Forbes

Great. Well, in recognition of the momentous occasion, you've got 15 minutes extra of enjoying the sunshine this afternoon. Thank you all very much and we will see you tonight or in six months' time. Thanks.

END OF TRANSCRIPT

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Items and actions

Agenda

Start of Transcript

Raymond Bremner

Kate Forbes

Kathleen Robertson

Kate Forbes

Sarah Compton-Bishop

Oliver Reid

Kate Forbes

Malcolm Burr

Kate Forbes

Kathleen Robertson

Kate Forbes

Ranald Robertson

Kate Forbes

Kathleen Robertson

Kate Forbes

Stuart Black

Kate Forbes

Paul F Steele

Kate Forbes

Paul F Steele

Kate Forbes

Emma Macdonald

Kate Forbes

Kathleen Robertson

Kate Forbes

Martin Johnston

Martin Johnston

Kate Forbes

Frank Mitchell

Kate Forbes

Alistair Dodds

Kate Forbes

Frank Mitchell

Bill Lobban

Kate Forbes

Alastair MacColl

Kate Forbes

Frank Mitchell

Kate Forbes

Cara Aitchison

Kate Forbes

Cara Aitchison

Vicki Nairn

Kate Forbes

Nick Halfhide

Kate Forbes

Damien Yeates

Kate Forbes

Alastair MacColl

Kate Forbes

Frank Mitchell

Kate Forbes

Maggie Sandison

Kate Forbes

Bill Lobban

Kate Forbes

Cara Aitchison

Kate Forbes

Richard Lochhead

Kate Forbes

Stuart Black

Paul F Steele

Kate Forbes

Ealasaid MacDonald

Kate Forbes

Nick Halfhide

Kate Forbes

Raymond Bremner

Kate Forbes

Pippa Milne

Frank Mitchell

Kate Forbes

Emma Macdonald

Kate Forbes

Alistair Dodds