Infrastructure Investment Plan 2021-22 to 2025-26: progress report 2024 to 2025

Overview of Progress

Fiscal and Macroeconomic Context

The environment for public infrastructure projects in Scotland is challenging. Global instability, Brexit and recovery from the pandemic led to supply chain disruption which translated into high inflation in the recent past. This inflation permanently raised the costs of delivering infrastructure projects and programmes. Construction prices today are over 27% higher compared to pre-Covid levels.

The previous UK Government presided over a 4.3% real terms reduction in our UK capital block grant over the period 2022-23 to 2024-25. Coupled with the increase in construction prices this placed significant pressure on our capital budget. While we received a welcome increase to our block grant in the 2025-26 Budget, this only restored funding to 2023-24 levels in real terms and was insufficient to meet all our infrastructure investment needs. To boost this, the Scottish Government maximised capital borrowing and drew down over £300 million of Scotwind revenues to invest in activities that deliver on our net zero ambitions and have a long-lasting benefit for the people of Scotland. Looking ahead, the UK Spending Review shows that our capital Block Grant is expected to decrease by 1.1% in real terms between 2025-26 and 2029-30.

Although inflation has fallen back from the highs seen in 2022, monetary policy remains significantly more restrictive than prior to the pandemic. This has raised the cost of public borrowing and financing costs for prospective public-private partnerships so that they offer less value for money than previously. Furthermore, increasing demands on resource budgets limit the affordability of unitary payments that fund public-private partnerships over the course of the contract.

In this fiscal context, Scottish Ministers need to consider affordability and additionality before committing to additional major infrastructure projects or public-private partnerships in the near term. In line with the investment hierarchy of the Infrastructure Investment Plan the Scottish Government is focussing capital resources on the maintenance of existing assets to safeguard service delivery.

Scotland’s fiscal powers remain limited. Our borrowing powers were extended moderately in the review of the Fiscal Framework, but we continue to rely heavily on the UK capital block grant. Therefore, we are looking at ways in which our resource budget can be appropriately re-prioritised towards capital, and we are strengthening our efforts to identify ways in which private capital can be mobilised to achieve our infrastructure aims.

Progress in 2024-25

The Scottish Government’s Infrastructure Investment Plan for Scotland 2021-22 to 2025-26 was published on 4 February 2021. The Plan covered the five financial years from April 2021 and included details of around £26 billion of major projects and national programmes. However, the Medium-Term Financial Strategy (MTFS) published on 23 May 2023 announced our intention to extend the Plan’s period by one year. This means the current Plan will now run to 2026-27 and the next Plan will cover the period from 2027-28.

The Infrastructure Investment Plan (hereafter IIP) set a long-term vision of infrastructure supporting an inclusive, net zero carbon economy in Scotland. This is the fourth annual progress report of the IIP and highlights within the last year are as follows.

Tackling climate change

We continue to make significant progress in helping to make Scotland’s buildings move to clean heating and become more energy efficient. Our New Build Heat Standard came into effect last year, which means that no new buildings constructed under a building warrant from 1 April 2024 will be fitted with gas or oil boilers; instead, they will be built with clean alternatives such as heat pumps, wood and bioenergy systems and connections to a heat network. We have also been considering next steps on legislation for existing homes and buildings and have recently confirmed that a Heat in Buildings Bill will be brought forward during this Parliamentary session, setting a target for clean heating and including measures to boost the growth of heat networks.

In 2024-25 we have continued to provide financial support and advice to enable the installation of clean heat and energy efficiency improvements in homes and other buildings across Scotland. This support forms part of the £1.6 billion allocated through our Heat in Buildings schemes during this Parliamentary session. Our most recent Monitoring and Evaluation Report was published in October and confirmed that the Scottish Government provided over £210 million in capital and loan funding during the previous 2023-24 financial year. Through this investment, nearly 10,000 households at risk of fuel poor were supported to make their homes warmer through our Warmer Homes Scotland programme and Area-Based Schemes. We also made more than 6,000 offers of funding through our Home Energy Scotland Grant and Loans scheme for energy efficiency works and/or to install clean heating.

Within the Energy sector, the Hydrogen Innovation Scheme provided grant funding of almost £7 million to 31 projects for feasibility studies, technical demonstrations, and the development of test and research facilities that will drive technological progress and advance innovation to support the development of the hydrogen economy in Scotland. The Emerging Energy Technologies Fund (Carbon Capture and Storage) provided £2 million to National Gas SCO2T Connect to explore repurposing the Feeder 10 pipeline which is a critical infrastructure element in the deployment of the Acorn Carbon Capture and Storage (CCS) project and Scottish Cluster, including key industrial sites at Grangemouth. The Scottish Industrial Energy Transformation Fund (SIETF) committed up to £9 million in 2024-25 to co-invest with industry across a range of projects to reduce emissions, increase energy-efficiency and reduce energy costs. All 4 Energy Transition Fund (ETF) projects are in full delivery with 3 completing delivery on the ETF funded elements at the end of 2024-25. These included the Energy Transition Zone which delivered the new EnergyWorks site on the innovation campus in Altens Industrial Estate in Aberdeen and the Aberdeen Hydrogen Hub project which continues to roll-out hydrogen infrastructure in the city, including supporting the fleet of hydrogen powered buses operated by First Bus.

In Waste, the Circular Economy Bill was unanimously passed in its final parliamentary vote in June and officially became the Circular Economy (Scotland) Act 2024 in August. The Act establishes the legislative framework to support Scotland’s transition to a zero waste and circular economy, significantly increase reuse and recycling rates, and modernise and improve waste and recycling services. In December, we published our Circular Economy & Waste Route Map to 2030 which sets out the strategic framework and clear actions we need to take to deliver sustainable use of our resources and progress a circular economy in Scotland by 2030. The £70 million Recycling Improvement Fund continues to invest in local authority recycling infrastructure and the Scottish Government is working in partnership with COSLA (Convention of Scottish Local Authorities), SOLACE (Scottish Branch of the Society of Local Authority Chief Executives) and Zero Waste Scotland to deliver the fund. Extended Producer Responsibility (EPR) for Packaging legislation has now come into force, with payments to local authorities commencing UK-wide from October 2025.

The City and Regional Growth Deals programme takes a proactive approach to minimising whole life carbon emissions through delivery and to aligning with the transition to net zero by 2045. The Dairy Nexus project within the Borderlands Growth Deal which aims to decarbonise the dairy sector and move it towards a circular bioeconomy completed construction this year. The project comprised construction of a Co-innovation Hub near Dumfries, the “UK’s first” dairy farm aimed at moving forage-based dairy production towards net zero emissions, biorefinery facilities, and milk technology laboratories aimed at reducing energy consumption and waste in milk processing and storage. The Walk, Cycle, Live Stirling project within the Stirling and Clackmannanshire City Region Deal also completed this year and is the first project in a programme of active travel routes to be delivered as part of the Deal which has a key focus on transport, connectivity and low carbon. The project saw the completion of two routes: the College Corridor connecting the city centre to Forth Valley College, and the University Corridor linking the University of Stirling to Causewayhead.

The Learning Estate Investment Programme (LEIP) introduced ambitious in-use energy targets which will use around half of the energy of typical existing schools. Performance will be monitored in operation to ensure compliance with LEIP’s energy target. The ten projects in LEIP’s latest phase will also aim for embodied carbon targets, eliminate on-site emissions and provide for electric vehicle charging.

In Transport, we have transformed our Active Travel delivery system and invested over £157 million across a number of Active Travel programmes in 2024-25 to develop and deliver improved walking, wheeling and cycling infrastructure, and provide support for behaviour change schemes. This means that over the last four years, the Scottish Government has invested £500 million to make walking, wheeling and cycling more accessible for everyone for short, everyday journeys. The benefits of this sustained investment are clear and Sustrans Scotland reports that walking, wheeling and cycling in Scotland’s cities takes up to 440,000 cars off the road every day and saves 90,000 tonnes of greenhouse gas emissions per year.

Scotland already has one of the most comprehensive public charging networks in the UK, with over 6,500 public charge points as at March 2025. In October, Scotland met its target for 6,000 public EV charge points two years ahead of schedule. In December, we published a draft route map for enabling the delivery of approximately 24,000 additional public charge points by 2030. Through our £30 million EV Infrastructure Fund, we are supporting local authorities to work in partnership with the private sector to continue to expand public EV charging infrastructure across Scotland with a particular focus on those areas less likely to benefit from private sector investment in public EV charging infrastructure, including rural and island communities.

The second and final phase of the Scottish Zero Emission Bus Challenge Fund (ScotZEB) awarded £41.7 million to support the introduction of 252 new, zero emission buses and coaches to Scotland’s roads. The funding will also support the electrification of 21 depots across Scotland, which will be opened where possible to third parties to enable en-route charging to other businesses. The HGV Decarbonisation Pathway for Scotland was published in 2024 and set out an action for the Scottish Government to develop a financing forum for HGV (Heavy Goods Vehicle) operators in Scotland who are ready to decarbonise their vehicles and operations and this forum was held in March 2025.

In 2024-25, we invested £169 million in a prioritised enhancements programme for Scotland’s Railway. We continued to progress our decarbonisation plans for Scotland’s passenger rail services with works ongoing to enhance and electrify the East Kilbride Line ahead of a planned completion date in December 2025.

In March, Caledonian Maritime Assets Limited, signed the contract for seven new electric ferries for use on the Clyde and Hebridean network. These vessels will be delivered to routes across the network from 2027 and will benefit communities across Scotland with increased resilience and lower emissions.

Scotland creates more new woodland than the rest of the UK combined and in 2024-25, Scottish Forestry approved claims for 9,600 hectares of new woodland creation. The actual planting achieved will be confirmed in July.

A number of flood protection schemes to improving resilience are under construction around Scotland and three were completed in Millport, Upper Garnock and Stranraer. Scotland’s First Flood Resilience Strategy was published in December which sets out what is needed to make our communities more flood resilient over coming decades. The strategy puts people at the heart of the process and supports an increase in the range and rate of delivery of actions both to manage our flood exposure, and to reduce the impacts of flooding when it does occur.

The new North East Hub health and social care facility at Parkhead in Glasgow is a fully electric Net Zero Carbon facility and replaces several outdated smaller healthcare facilities in the East End of Glasgow making a step change in carbon emissions. The Hub will also include a number of Electric Vehicle charging points to support zero carbon travel.

The new Fife College Dunfermline Learning Campus project is on target to open early next year and the new building is tackling climate change by delivering on the Net Zero Public Sector Building Standard. This voluntary standard supports public bodies to meet their net zero commitments for their new build and major refurbished infrastructure projects. Adopting this approach has enabled the College to implement a range of energy saving measures, in particular to the building elements during construction, which would otherwise be unavailable once the building is completed and in-use. The project aims to be an exemplar building for the college sector in Scotland and beyond, setting the standard for future college developments and subject to final verification, elements of the project are set to achieve industry leading carbon footprint levels.

The construction of the new HMP Glasgow commenced this year and HMP Glasgow have worked with the Scottish Futures Trust from the early phase of design to be the first prison to set baseline emissions targets. The design has eradicated the use of all fossil fuels and aim for Zero Direct Emissions in normal operation. The construction phase has set targets and monitoring for direct emissions, indirect emissions and carbon intensity for 2025-26. There are additional targets set for resource efficiency around construction waste intensity, water intensity and diversion from landfill what are all tracking positively.

Scottish Water’s renewables programme has delivered three schemes to date adding 1.5GWh (gigawatt-hour) capacity to its renewable portfolio. This includes an innovative hydro energy generation scheme at Whiteadder Reservoir in East Lothian, the first of its type in Europe. It uses siphon technology to generate energy while controlling the level of the reservoir without the need for major civil-engineering works. Scottish Water also delivered a groundbreaking project to harness hydropower from wastewater at its works in Hamilton, South Lanarkshire, the first of its kind in the UK. The new hydro turbine there is set to cut carbon emissions by 64 tonnes of carbon each year. Scottish Water’s first solar and battery storage scheme on a water treatment works has begun operating at Howden, near Selkirk in the Scottish Borders. It enables the site to use solar energy even when the sun is not shining and it will generate over a third of the site’s power usage and save 169 tonnes of carbon every year.

Driving economic growth

City and Regional Growth Deals are designed to drive an inclusive and dynamic economy that can benefit all with long-term projects to enhance skills provision, drive innovation, create opportunities to access higher-paid jobs and act as a catalyst for regeneration of deprived areas. Key achievements over the last year included the opening of the SeedPod project within the Aberdeen City Region Deal which provides ambitious food and drink businesses with commercial facilities, sector expertise, growth support, and industry connections under one roof. It will support businesses to improve productivity, increase exports and create new jobs while making the region a leader in low carbon and environmentally sustainable food production. The Edinburgh Futures Institute project within the Edinburgh and South East Scotland City Region Deal also opened. The Institute, which is located in the former Edinburgh Royal Infirmary building is a data-driven innovation hub driving interdisciplinary research, teaching and entrepreneurship, using data to address real world opportunities and challenges.

Last year saw the opening of the Crop Innovation Centre located at the James Hutton Institute which forms part of the Tay Cities Region Deal. Projects within the centre, include the Advanced Plant Growth Centre which will be an innovation centre project led by Industry and delivered by the James Hutton Institute, looking at emerging disruptive global technologies in total controlled environment agriculture, and the International Barley Hub which will be a world-class, state of the art, contemporary plant science innovation hub and translational research centre of excellence promoting Scientific Discovery, Innovation and Internationalisation. Also opening last year was the Govan-Partick Bridge project within the Glasgow City Region Deal which is the first pedestrian/cycle crossing over the Clyde and will improve connectivity between the two areas, including connecting the University of Glasgow and the Queen Elizabeth University Hospital.

The Islands Programme delivered a £3 million funding package to help improve infrastructure on Scotland’s islands. The creation of new onshore facilities at the community-owned Staffin Harbour on Skye received over £409k in 2024-25 which will deliver economic benefits from in-direct increased local spending through more people coming through the Harbour on a daily basis. The Trotternish peninsula is one of the most disadvantaged areas on Skye and the community has been extremely supportive of the project. The ongoing rebuild of the Fair Isle Bird Observatory following the 2019 fire, received nearly £205k in 2024-25. The Observatory attracts visitors from around the world and has brought employment and income to Fair Isle since 1948. Once completed, the new one will continue to do so as the Observatory’s existence on the island is key to ongoing economic survival and sustainability.

In Transport, over £683 million was invested in safely operating and maintaining the trunk road network in 2024-25. Good progress was also made in achieving the first two milestones of our A9 Dualling Delivery Plan with the commencement of procurement for the Tay Crossing to Ballinluig project in May and in July the contract was awarded to dual the A9 between Tomatin and Moy. A significant milestone was also reached to tackle the landslide issues at the Rest and Be Thankful with the publication of draft Orders for both the medium and long term solutions. The statutory authorisation process for the A9/A96 Inshes to Smithton City Deal project and the A96 Dualling Inverness and Nairn (including the Nairn Bypass) scheme were completed and work is being progressed on both schemes to determine the most suitable procurement option for delivery and thereafter a timetable can be set. In November, the outcomes for the A96 Corridor Review were published in draft for consultation and the 12-week consultation ended in February and all feedback is now under active consideration.

New train stations opened in Leven and Cameron Bridge in June as part of the Levenmouth rail project with an investment of over £116 million. It was delivered by Network Rail and ScotRail and reconnected Leven and Cameron Bridge to Scotland’s railway network for the first time in more than half a century. The historic reintroduction of the railway line has improved connectivity for local communities, providing greater access to education, entertainment, and employment. We also provided over £1.4 billion to support the provision of the ScotRail and Caledonian Sleeper passenger rail services and for the safe operation, maintenance, and renewal of the rail network

Growing the economy requires building the infrastructure required for businesses and people to flourish. Businesses increasingly must make use of the internet to successfully function and the pandemic has resulted in a greater prevalence of jobs that can be carried out (at least in part) remotely. Improving access to digital connectivity infrastructure will support both businesses and jobseekers across Scotland, ensuring that all parts of the country benefit as our economy grows. It is anticipated that over 20,000 connections will have been delivered through the three R100 contracts during 2024-25. As at February, the three Reaching R100 programme contracts for North, South and Central have delivered a total of 54,108 contracted premises and an additional 16,460 non-contracted “overspill” premises. Over 4,900 faster broadband connections have also been delivered thanks to the R100 Scottish Broadband Voucher Scheme as at February. Our award-winning Scottish 4G Infill (S4GI) programme, which has invested £28.7 million to deliver future-proofed 4G infrastructure, continues to improve everyday life in 55 rural and island communities. This will be enhanced by the UK Home Office-led Emergency Services Mobile Communication Programme (ESMCP) which has now completed a period of extended re-procurement and has new suppliers in place to deliver the programme. Investment in the Emergency Services Network (ESN) will deliver improvements to 4G mobile network coverage across Scotland which will be accessible beyond the emergency services. The availability of an extended commercial mobile telephone network will facilitate greater remote communications capability for local communities for personal and business purposes.

At the end of December, we had delivered 26,039 homes towards our affordable homes target. Our ambition to deliver 110,000 affordable homes by 2032 will leverage in spend from private and social partners to support a total investment package of around £20 billion, supporting on average between 12,000 and 14,000 full-time equivalent jobs in the Scottish construction and related sectors each year.

The Scottish Land Fund which had a budget of £7.1 million for 2024-25, has enabled community groups to purchase assets within their own community to support their aspirations for their local community. Whether it is bringing unused assets back into productive use or ensuring that existing ones continue to be used and developed further, communities taking control of local assets is helping to build local community wealth and wellbeing and contributes to the wider economic benefit as a result.

Supporting public services

In the fourth year of its six-year charge control period, Scottish Water had invested a total of £847 million by the end of 2024 to maintain and improve services across Scotland. Scottish Water’s capital programme continues to support housing and business growth across the country. In Winchburgh, West Lothian £35 million was invested in an innovative new wastewater treatment works, supporting a projected population increase from around 4,000 people to over 16,000 by 2032. A further £60 million was invested in upgrading Invercannie water treatment works, increasing the capacity from 75,000 to 300,000 customers receiving fresh, high-quality water across Aberdeenshire. Scottish Water continues to work with developers and Local Authorities to ensure any upgrades to its water and wastewater network infrastructure are delivered to support development. In the current charge control period, it has invested £242 million in treatment capacity for water and wastewater services to date.

The Learning Estate Strategy which underpins the Learning Estate Investment Programme (LEIP), encourages the consideration of integration of public services to enhance service delivery and user experience. LEIP school projects include publicly accessible sport and leisure facilities, community learning and development spaces, service desks and libraries. In addition, consideration has been given to campuses which include healthcare provision. Three projects opened last year benefitting 3,300 pupils. LEIP will support school projects with an estimated construction value of £2 billion across all local authorities who submitted projects and the investment is boosting the local economy, the construction industry, and helping economic stimulus with the creation of jobs. Six projects with a value of £353 million started construction in 2024-25.

The second phase of the Golden Jubilee Foundation Hospital Expansion Programme in Clydebank saw a new Surgical Centre open which provides an expansion of elective surgical capacity, specifically orthopaedic surgery and endoscopy procedures. NHS Lothian’s Oncology Enabling Projects, Edinburgh Cancer Centre completed and this included two units which will provide vital care and treatment to some of the most unwell patients in Scotland in the shape of the new Cancer Assessment Unit and oncology ward for systemic anti-cancer treatment at the cancer centre in the Western General Hospital. The new North East Hub health and social care facility at Parkhead in Glasgow opened which will bring together a number of community health and social care services across different sites and will provide services for children, adults and older people, addictions, justice, homelessness, sexual health and health improvement. The Hub also includes General Practitioner services, community pharmacy and dental services and provides community spaces including bookable rooms, the relocated Parkhead library, and a café.

The major vessels replacement programme continues to progress and the MV Glen Sannox (Motor Vessel) entered service in January. This is the first of two new dual fuel LNG (Liquefied Natural Gas) and MGO (Marine Gas Oil)) vessels which will be deployed to serve on the main Arran route to Brodick, initially from Troon, but then switching back to Ardrossan when required port works are complete. These vessels and port works will ultimately deliver improved reliability, resilience, and capacity for communities and businesses who rely on what is one of the busiest routes on Clyde and Hebridean network. In addition to the new vessel delivery, investment in port works on the three ports serving the Little Minch routes and three of the ports serving the Islay routes has progressed significantly, with most now largely complete in advance of new vessel delivery from summer 2025.

Last year £29.8 million of funding was provided to support place-based community-led regeneration in our most disadvantaged communities. Investment included a direct allocation to local authorities of Place Based Investment Programme (PBIP) funding, support through the Regeneration Capital Grant Fund (RCGF), Low Carbon Vacant and Derelict Land Investment Programme (VDLIP), and continued support to Clyde Gateway. Local government received almost £5.5 million through PBIP which is contributing to projects targeted at improving community-led facilities, green spaces, active travel and public realm projects. RCGF delivered in partnership with COSLA (Convention of Scottish Local Authorities) and local government is supporting locally developed place based regeneration projects that involve local communities. In 2024-25, existing projects awarded funding in previous funding rounds continued to receive support for both RCGF and VDLIP and Clyde Gateway were provided £1 million of capital funding to support their regeneration programme to inward investment and improvement for the people and communities across the east end of Glasgow and South Lanarkshire.

The City and Regional Growth Deals Programme aligns with the Scottish Government’s overall programme of public service reform to ensure our public services are inclusive, sustainable, and effective in improving people's outcomes. The Glasgow City Region City Deal has led to the development of the City Region partnership, which has enabled enhanced greater regional working, contributing towards public sector reform. This year, that has included the conclusion of the ‘Reprogramming Exercise’, which has seen the reallocation of £129 million of Deal funding to projects with intraregional inequality as a key driver for funding allocations. The Data Driven Innovation Hubs developed and supported through the Edinburgh and South East Scotland Deal are working to enhance the effectiveness and efficiency of a range of public services, including health and social care, child protection and policing through more effective use of data to help tailor and target provision. The wider programme has enabled the development of regional partnerships across Scotland which have been the catalyst for other areas of joint working for improved efficiency and impact. In the past year, this has included delivery of Investment Zones in the Glasgow City Region and the North East, and regional delivery of the Electric Vehicle Investment Fund.

Within the Islands Programme, the £346k project to build new airfield terminals on the Orkney islands of Eday and Westray is critical for communities to access public services such as NHS facilities, local authority social care services, and wellbeing centres on the Orkney Mainland. Highland Council received £350k to deliver road widening schemes on the isle of Skye which will seek to ease access issues for residents, improve the tourism offer and support the delivery of health and social care services.

The Cloud Platform Service (CPS) which went live in 2024, is a secure, scalable, platform offering cost effective cloud-based solutions to accelerate digital transformation for the Scottish Government and the wider Scottish public sector. Its centralised cloud-based platform offers resilient, secure landing zones for customers and supports the delivery of the Digital Strategy commitment to provide common components to transform services by having simplified access to cloud technologies. It is designed to enable the Scottish Government and Scottish public sector organisations to realise the benefits of public cloud hosting. The benefits customers are able to realise include the likes of discount cloud usage rates, existing provider contracts, and access to pre-configured security features.

The ninth round of the CivTech programme saw a number of Challenges that directly addressed key public sector service issues such as including protecting the public sector against ransomware and other forms of cyber-crime, increasing access to public services, and offering an individualised communications channel that interacts with public sector services. Round ten currently includes Challenges with multiple public sector organisations such as improving situational awareness for emergency responders and making the sharing of data across organisations seamless and easy.

Within digital planning, the Digital Development Consents programme is responsible for driving forward digitalisation of planning as a key public service. In 2024-25 an inbound transactional payment system was developed in close collaboration with local government and planning authorities. The first partner, Loch Lomond & Trossachs National Park went live at the beginning of April this year. This new payment solution delivers an improved customer experience and reduces the current fragmented application journey. It also delivers productivity benefits for local government handling payments, reducing manual steps which in turn is expected to reduce the number of invalid applications caused by payment errors. In December, a new integrated planning fee calculator was launched and a second fee calculator for building standards applications was launched on 1 April 2025 to align with changes to fee structure.

The UK Home Office-led Emergency Services Mobile Communication Programme (ESMCP) to replace the existing Airwave Radio Network will provide mission mobile-based critical communications across the three Emergency Services (3ES). The Emergency Services Network (ESN) will make an important contribution to ensuring that we have sustainable public services in Scotland. The activation of new mobile sites, being built for the ESN in Scotland are expected to become operational during 2025-26. ESN will enable wider access to emergency 999 calls in some of the most remote and rural parts of Scotland. This will mean the emergency services and other first responders will have access to mission critical communications for operations and in addition, for the first time, use the same secure and prioritised platform for sharing vital data information and expertise quickly and securely to and from the frontline when it is needed most. ESN will play a key role in ensuring the safety of the public and emergency service workers.

The digital infrastructure proposed for the new HMP Highland will assist the Scottish Prison Service (SPS) in advancing the digital transformation of its Estate and business and provide wider access to digital services for those in our care and their families. To enhance digital inclusion, this will include having the digital infrastructure to enable the people in our care to access digital services as they are enabled. The replacement of the current HMP Inverness will expand the provision of custodial services available within the local community and reduce reliance on accommodation in other locations, principally the Central Belt. The new HMP Highland will enable SPS to better support local courts by providing additional accommodation for court access, reducing journey times from the central belt for young people and women in particular.

Tackling child poverty

The new Dunfermline Learning Campus project which is due to be completed by September this year and fully operational by January/February 2026, will tackle poverty by upskilling and providing learning opportunities to the community. Fife College will work together with schools to provide learners with a more extensive curriculum offering than is currently available and a much-enhanced offer to regional employers. The shared learning campus will open many different routes for young people in Fife by improving attainment, employability skills and positive destinations. The new campus will contribute to tackling child poverty by ensuring the College is capable of responding to the changing demographics of the region and by providing education and training required at Scottish Credit and Qualifications Framework (SCQF) levels.

The Learning Estate Investment Programme (LEIP) is improving the learning environment for children to support positive school experiences by providing nurturing environments. LEIP school building projects are tailored to provide the spaces necessary to meet the needs of local communities, families and individual children.

At December 2024, we had delivered 26,039 homes towards our 110,000 affordable homes target, of which 19,945 (77%) are homes for social rent. An estimated 2,669 households with children have been helped into affordable housing in the year to December 2024 and keeping social rents lower than market rents benefits approximately 140,000 children in poverty each year.

As part of our new model for Active Travel delivery, £35 million was distributed directly to local authorities last year to deliver improved Active Travel infrastructure through our new Active Travel Infrastructure Fund (Tier 1). This new Fund provides greater flexibility to meet local priorities and improve longer-term confidence in funding provision, and is distributed through a new methodology which prioritises funding in areas of income deprivation. A further £19 million was invested across Scotland’s seven Regional Transport Partnerships to deliver behaviour change initiatives such as improving access to bikes and increased cycle storage where it’s most needed. Our investment in Bikeability Scotland has continued to deliver record levels of participation, giving more than 60,000 school aged children essential cycle skills and confidence.

All City and Regional Growth Deal projects are required to carry out Equality Impact Assessments and to evidence how they will strive to create economic opportunities that are accessible to all. Over time they are expected to create new employment, training and other economic opportunities for people across Scotland which will contribute towards our shared objective to eradicate child poverty. The Innovative Assisted Living - Fit Homes project within the Inverness and Highland City Region Deal aims to provide sustainable, affordable, replicable, cost-effective, design-led homes that people can live in ‘from cradle to grave,’ complete with technology that supports vulnerable people to live more independently and may help prevent hospital admissions, predict health events, and monitor the physiology of tenants. The project has delivered 33 new FitHomes units, 16 with integrated technology, and retrofitted a further 11. All are located in Dingwall, Dalmore, Inverness, Lairg, and Nairn. The Affordable Housing project within the same Deal aims to build over 500 new affordable houses for young Highlands residents or those planning to move there. Led by Highland Council it has already completed 48 homes and Highland Council is working on 78 more, aiming for a total of 168.

Within the Islands Programme, the Ionad Eilean na h-Òige project, or "Island of Youth Centre" on Eriskay, received the largest award the programme made in 2024-25, worth £651k. The Centre’s initiatives, including child play and health courses, directly impact the quality of life for residents and align with these broader goals. The £50.5k expansion of the community led and managed Taigh Chearsabhagh Creative Hub on North Uist, will work toward tackling wider local issues including child poverty, through financially accessible programming, improved local economic opportunity, and enhancing cross-sector access to public funding. The Hub will support improved chances to widen local skills development through workshops, educational courses, mentoring, and volunteering.

HMP Glasgow’s community fund has supported local children and youth initiatives within the past year as well as an effective engagement programme with local schools to encourage careers in construction. Moving forward HMP Glasgow aims to develop and arm’s length community interest company with one of the aims on improving the health and wealth of local children through direct engagement and support. This scope will include minimising the financial burden imprisonment has on families and building on the positive work that the family services team has developed in Barlinnie.

Major project activity

Over the course of 2024-25, the following major infrastructure projects completed construction and opened to the public as reported within our six-monthly major capital project updates:

• Levenmouth Rail project (£116 million)
• National Waiting Times Centre Board – Hospital Expansion Programme – Phase 2 (Golden Jubilee Surgical Centre) (£82.5 million)
• NHS Greater Glasgow and Clyde - North East Hub project (£67.3 million)
• NHS Lothian - Oncology Enabling Projects, Edinburgh Cancer Centre (£24.7 million)

Major infrastructure projects planned to complete construction during 2025-26 include:

• East Kilbride Rail Enhancement
• Markle Level Crossing Bridge Replacement
• MV Glen Rosa (forms part of the CMAL – Two new 100 metre ferries project)
• NHS Ayrshire & Arran - Foxgrove (National Secure Adolescent Inpatient Service)
• Dunfermline Learning Campus (College element)

Major projects which commenced construction in 2024-25 included NHS Greater Glasgow and Clyde’s Radionuclide Dispensary, HMP Highland and HMP Glasgow. Major infrastructure projects which will commence construction during 2025-26 include the A9 Dualling Tomatin to Moy and the A9 Dualling Tay Crossing to Ballinluig.

Reporting

The IIP includes both programmes and projects. Programmes co-ordinate, direct and oversee the implementation of a set of related projects. Projects have defined start and end points (usually time-constrained and often constrained by funding or deliverables) and are undertaken to meet unique goals and objectives. Projects can be part of a programme but are not always.

As well as annual IIP Progress Reports, we also normally report on the programmes and projects within the IIP on a six-monthly basis by way of an IIP Major Capital Projects Progress Update, IIP Project Pipeline Update, and IIP Programme Pipeline Update. However, our December 2023, August 2024 and February 2025 reporting reflected the funding decisions set out in Scottish Budgets and only an IIP Major Capital Projects Progress Update report was published. This was due to the significant pressures on our capital budget as the high level of inflation experienced in the construction sector in recent years which has permanently increased the cost of delivering infrastructure. We plan to resume both the programme and project updates in 2026 following a revisit of our infrastructure pipeline later this year which will state what will be delivered within the extended IIP period up to 2026-27.

The latest IIP Major Capital Projects Progress Update as well as previous progress, programme and project reports relating to the IIP can be found on the Scottish Government website at Infrastructure Investment Plan.

The latest information relating to projects within the IIP Major Capital Projects Progress Updates and their accompanying climate change targets, strategic outcomes and their contribution made to local economic development, can be found at Annex B.

Infrastructure Commission for Scotland

In 2020, the short-life Infrastructure Commission for Scotland (ICfS) identified key strategic priorities in Scotland to be made to boost economic growth and support public services. Annex A includes an update on the progress against the broad themes of the Commission’s recommendations.

Future Infrastructure Investment Plans

The Medium-Term Financial Strategy (MTFS) published on 23 May 2023 announced our intention to extend the Infrastructure Investment Plan (IIP) period by one year. This means the current IIP will now run to 2026-27 and the next IIP will cover the period from 2027-28.

Development of the next IIP is currently underway and this will be informed by our work with the Scottish Futures Trust to deliver an infrastructure improvement programme that is guided by the recommendations of the Infrastructure Commission for Scotland.

The Infrastructure Pipeline

The Infrastructure Investment Plan 2021-22 to 2025-26 established a pipeline of projects and programmes with an expected total capital value of around £26 billion. The share of direct Scottish Government investment in these projects over that five-year period was expected to be circa £15 billion.

While we report regularly against this pipeline, our reporting includes a subset of projects and programmes that meet certain thresholds and is not the entirety of our capital budget. The capital budget for the same period was expected to be £33.5 billion at the time of publication.

We are now four years into this Infrastructure Investment Plan and, as set out above, there has been sustained pressure on our spending power caused by a combination of challenges – a real terms cut to capital funding, higher than anticipated interest rates, sustained construction inflation and labour market constraints caused by EU (European Union) Exit, the war in Ukraine and the pandemic. We have been open with the public and parliament that we can no longer afford all of our original pipeline. We have committed to publish a new infrastructure pipeline following the UK Spending Review.

Improving infrastructure delivery

The Scottish Government with the support of SFT have established a Planning, Infrastructure and Place Advisory Group (PIPAG). The group will help drive forward joined up, place-based delivery of development and infrastructure in Scotland. The core group met for the first time on 14 June 2023 and further details on their work can be found at Planning, Infrastructure and Place Advisory Group

We are working across the opportunity areas of the Green Industrial Strategy to develop a framework for supply chains to support the Green Energy transition and associated housing. The construction industry will play a vital role in supporting a Just Transition to Net Zero, and further developing the supply chains for renewable energies, carbon capture, and the housing needed to enable growth.

We are working with the industry through the ministerially led Construction Leadership Forum (CLF) to support the green energy transition and to embrace the opportunities that green economic growth will bring. The CLF which is now supported by the Scottish Government’s Supply Chains Innovation Unit, launched the Transformation Action Plan in January 2024. This was codesigned with industry and aligns with the National Strategy for Economic Transformation. In line with the New Deal for Business, it is now working closely with industry and agencies on delivery of the Plan through 10 collaborative CLF working groups with co-chairs and members drawn from across the industry and public sector. Recently, these groups have been:

• Highlighting investment opportunities – the Pipeline Working Group has published the updated Forecast Tool with a value of works of £17.2 billion listed by 45 different organisations. This is enabling investment by giving industry long sight lines on the pipeline of work and contributing to improvement of sustainable procurement pricing with the Scottish Government launch of the Graduated pricing mechanism guidance: CPN 3/2024
• Improving Quality – Quality charter recently surpassed 100 commitments from the sector
• Utilising Data – the Data Working Group published a major upgrade to the Construction Data Dashboard in April 2025
• Increasing Productivity – the Modern Methods of Construction Working Group is focussed on increasing awareness of the range of offsite manufacturing options that can help improve the speed and quality of delivery