Programme for Government 2020 to 2021

Sets out actions for protecting and renewing Scotland.

Chapter 1 A National Mission to Create New Jobs, Good Jobs and Green Jobs

COVID-19 has had a massive impact on the global economy and Scotland, like all countries, has been deeply affected. This forces us not just to respond in the immediate term, but also to make choices about the sort of economy we want to have and to focus our efforts on building back fairer and stronger, and addressing the weaknesses that coronavirus has highlighted. The immediate challenge as we recover from the recession caused by COVID-19 is to protect and increase the number of jobs. In this chapter we set out how we will deliver on our new national mission to help create new jobs, good jobs and green jobs.

At the height of lockdown, we acted to directly support businesses hit hardest by COVID-19 with a £2.3 billion package to provide loans and business rates reliefs. We also welcomed the investment by the UK Government in the Job Retention Scheme which has prevented a significant increase in unemployment through this phase of the pandemic.

However, as the job retention scheme comes to an end, many industries are still struggling to return to pre-COVID-19 levels of business and this will have a significant impact on employment. It is therefore vital that we help people secure the skills they need to keep them in work, or help them back into employment at the earliest opportunity.

We must make sure that the new jobs we support people to access are good jobs - paying fair wages and complying with high standards. We must also seize the opportunity to create green jobs and train individuals with the skills they need to help us meet our commitment to reach net zero emissions.

It is imperative that our economic recovery is a green recovery - not just because it is the right thing to do in the face of the climate crisis, but also because it provides opportunities for new work and growth in today's challenging global market.

Building on last year's ambitious programme of action, we are now setting out new investment that increases the momentum for Scotland's transition to net zero. We are doing this because the opportunity is now greater than ever for Scotland to be at the forefront of global action. Governments around the world are reinforcing their commitment to net zero. Financial markets and investors are working towards greening their investment. Our programme, underpinned by our £2 billion Low Carbon Fund and a Scottish National Investment Bank committed to delivering net zero, will strengthen supply chains, attract investment, encourage businesses to innovate and diversify, and provide new opportunities for people to retrain and upskill in new and high growth areas - while protecting the environment that we all rely on.

We'll support this new skills investment with an enhanced offer on digital. Many employers and households accelerated their adoption of digital tools and technology during lockdown. We are therefore placing a new emphasis on technology to underpin our recovery and we have developed measures to drive up digital connectivity, innovation and the adoption of digital tools across SME and households. Our investment in this area will help more people engage with the digital economy, create jobs, and help more businesses increase productivity and grow more quickly.

We are considering how businesses impacted by the pandemic can be re‑capitalised and we continue to engage with the UK Government on this. As outlined in the Scottish Government's Economic Recovery Implementation Plan, a report with recommendations on the management of ownership stakes in private businesses will be put to Ministers in the autumn. This will include a recommendation on the optimum delivery model for the management of such stakes. We will also work towards implementation of the Scottish Law Commission proposals on reforming the law relating to Moveable Transactions, with a view to introducing a Bill early in the new Parliament. This will make it easier for businesses and individuals to raise finance, thereby assisting economic recovery.

More widely, we are stepping up efforts to promote Scotland to the world, attracting talent and inward investment, and taking action to boost trade as we implement the recommendations of the Advisory Group on Economic Recovery. We are taking steps to support our tourism and culture industries to find a way forward whilst working within the challenging restrictions tackling COVID-19 requires.

Creating jobs and boosting skills

Lockdown has impacted businesses in almost all sectors in Scotland. We've seen it hit tourism and hospitality, food, and the arts, entertainment and recreation sectors particularly hard. Even where sectors have continued to trade, turnover is down, resulting in precarious cash flows. And where sectors have started to reopen, it cannot be a business as usual approach now or possibly for some foreseeable time. Consumer demand, purchasing habits, and the factors guiding the decisions of many businesses have changed, perhaps for some time, so we must support businesses to adapt and ensure that people have the right skills and opportunities to thrive in these difficult circumstances.

From March this year our economic response and recovery programme initially focused on protecting the economy through insulating business and households from the worst impacts of COVID-19. This included a package of business support to reflect the specific needs of our economy in light of the crisis and keep businesses and jobs afloat. This included over £11 million in grants for self‑employed people through our Newly Self‑Employed Hardship Fund - providing essential aid for those who were ineligible for UK Government support. The fund was part of an almost £160 million package of additional grant support for small and medium sized businesses that was not available elsewhere in the UK.

However, we know the economic impact of COVID-19 and the removal of the job retention scheme will have a devastating effect on employment and jobs. And this will impact most acutely on young people and those who already face barriers to employment such as women, disabled people, and people from black and minority ethnic communities.

The loss of employment, and reliance on insecure work, has a significant toll on household and individual wellbeing. Ultimately, one of the best ways to ensure an individual's wellbeing is to secure a good job, with good conditions. Helping people to do so has always been our goal but it has never been more important.

Transitioning to a sustainable, net zero society by 2045 and restoring Scotland's environment will create a demand for a wide range of jobs with new skills and long term career prospects. Driving forward a green recovery, we will take bold action to increase the number of opportunities for people to be a part of this green revolution, and access new opportunities for jobs, training, and skills development.

The recent reports from both the Advisory Group on Economic Recovery and the Education and Skills Strategic Board have contributed to and concur with our strategic approach to the economy, and the reports from the Climate Emergency Response Group and the Just Transition Commission reinforce the importance of a green recovery.

Our range of employability and skills support includes:

  • Significant support for apprenticeships
  • A new Youth Guarantee
  • A new National Transition Training Fund
  • A £100 million Green Jobs Fund
  • Funding for employers to access flexible workforce development training opportunities and support inclusive economic growth through up‑skilling or re‑skilling of employees
  • Fair Start Scotland to help those facing the greatest barriers find work
  • Our No One Left Behind funding stream aimed at helping those who face challenging barriers to finding and maintaining employment reach their potential
  • Support for those affected by redundancy through our Partnership Action for Continuing Employment (PACE) initiative, including additional funding to reflect the current increase in people facing or experiencing redundancy
  • Investment in Individual Training Accounts
  • Funding to support community jobs

Supporting young people

Before the pandemic, we had established a strong track record of tackling youth unemployment through our Developing the Young Workforce (DYW) Programme. To address the challenges presented by the pandemic in terms of youth unemployment we will use DYW as the solid foundation to build our response upon.

We will invest £60 million in a new Youth Guarantee, targeted at those most in need of support, to help them make the transition into work, education, or training. Every young person aged between 16 and 24 in Scotland will be guaranteed either the opportunity to study at university or college, take part in an apprenticeship programme, take up a job or work experience, or participate in a formal volunteering or training programme according to their own personal circumstances.

Investing £60m to support a new Youth Guarantee

We will publish an implementation plan shortly which will set out how the guarantee will be delivered, bringing together partnerships with private, public and third sector organisations. This will include our commitment to the living wage, and working with universities, colleges, local authorities and others to develop a package of options, such as wage incentives, enhanced key worker support or new education or training opportunities to offer support to more young people, in addition to the KickStart Programme being developed by the UK Government.

To support the youth guarantee, we will invest up to £10 million in DYW Regional Groups to support more young people to access the labour market, strengthen their links with employers, and create more opportunities to employ young people. The Scottish Government will show leadership across the public sector to ensure that all our public bodies understand and support the ambitions of the Youth Guarantee, this will include creating increased opportunities for 'green' apprenticeships across public sector bodies.

We are also providing £10 million funding for up to 8,500 individuals to complete or start an apprenticeship, including additional funding for the Scottish Government's Adopt an Apprentice programme which provides a financial incentive to businesses to employ an apprentice who has recently been made redundant. Apprenticeships are at the heart of our skills system and we will ensure that they have a strong focus on providing the skills we need to achieve zero net carbon.

£250 Job Start payment for young people starting a new job

We have introduced our new Job Start Payment, providing £250, or £400 for people with children, supporting around 5,000 young people a year starting a new job after a period of unemployment. In the current crisis, getting a job will represent a massive turning point for many young people - this payment will help ensure it does not also bring financial pressures.

In delivering these ambitions we will build a new relationship with schools, colleges, and employers, to ensure support is directed where it can enable young people to secure new, high quality opportunities, and drive forward our economic and social recovery.

Helping people secure the skills they need for the future

The schemes we have detailed will help young people at risk from the impacts of the pandemic, but as the recovery develops we will see growth opportunities in new sectors, particularly in green growth sectors, that will require new skills and provide retraining opportunities. We will provide a package of support which includes an additional £100 million for people looking for work or those at risk of redundancy as a result of COVID-19.

National Transition Training Fund to support 10,000 people facing redundancy and unemployment

We will create a £25 million National Transition Training Fund, launching in autumn 2020, to support up to 10,000 people. This will provide rapid, high‑quality and targeted support to people facing redundancy and unemployment in those sectors and regions most exposed to the current economic downturn. Individuals eligible for funding will be in control of their training plan but supported by careers advisors with knowledge of regional job opportunities. The training will be aimed at helping individuals develop the skills required to move into sectors with the greatest potential for future growth and job opportunities. In line with the ambitions of the Climate Emergency Skills Action Plan, which is being progressed by Skills Development Scotland and partners, a focus will be the provision of green skills to support Scotland's transition to net zero.

We have doubled funding for the Flexible Workforce Development Fund to £20 million. Under existing eligibility rules we anticipate up to an additional 1,000 apprenticeship levy paying employers could benefit from the expansion of the Fund. This will enable more employers to address priority skills gaps in their organisation by accessing up to £15,000 in funding to create tailored training programmes with their local college, providing the opportunity to upskill and reskill their existing workforce.

Individual Training Accounts, backed by £3.7 million, are most commonly used to access basic entry‑level certificates across a range of sectors. We will work with business, trades unions, and the education and skills sector, to ensure a more targeted approach to training provision based on labour market intelligence. We will focus on sectors identified as likely to have skills gaps and job openings, ensuring that funding reflects demand. We will engage employers, schools and colleges to inform this approach, making sure we are developing the right skills.

We have also moved quickly to protect people made redundant by rapidly reviewing our Partnership Action for Continuing Employment (PACE) offer, scaling it up and providing £5 million additional funding. PACE offers free advice and is available to all individuals affected by redundancy, no matter the size of the business or number of employees. Since the start of the COVID-19 crisis, it has adapted its delivery model to continue to deliver for those who need support. Since March 2020, 136 companies and 9,137 individuals have received PACE support. This is a significant rise from the same period last year.

Creating Green Jobs

Transitioning to net‑zero will require a robust, diversified economy where businesses can make investments with confidence and our enterprise agencies can support the growth of high potential, sustainable and low carbon industries.

£100 million Green Jobs Fund

Over the next five years we will create a £100 million Green Jobs fund, investing alongside businesses and organisations to support new and increased opportunities for green job creation across Scotland. This will invest £50 million through Scottish Enterprise, Highlands and Islands Enterprise, and South of Scotland Enterprise to help businesses which provide sustainable and/or low carbon products and services to develop, grow and create jobs. A further £50 million will be invested to support businesses and supply chains across a range of sectors - such as manufacturing, tech, and land based organisations - to take advantage of public and private investment in low carbon infrastructure, and the transition to a low carbon economy in Scotland and beyond, boosting green employment. Our apprenticeship system and the National Transition Training Fund will in turn support people into the jobs created.

Through the range of low carbon funding set out throughout this Programme for Government, we will invest significantly to secure a just transition to a net zero economy. This will help provide new, green jobs and skills development, and ensure that as we accelerate our transition to net‑zero we have the Scottish supply chain, workforce and expertise that we need to maximise the opportunities from that transition in Scotland and globally.

We will boost youth employment opportunities in nature and land‑based jobs by expanding existing apprenticeship and undergraduate schemes in public agencies. We will work with Scottish Forestry, Forestry and Land Scotland and NatureScot to double their existing commitments to provide opportunities for young people within their organisations. These opportunities will be focused on degree level undergraduates as well as modern apprentices. We will look to extend this approach to other environmental bodies in the public sector and encourage third and private sector employers working in similar fields.

We will develop a Green Workforce and Skills Development package, building on an initial skills gap analysis undertaken by NatureScot on the investment in skills in the natural environment which will be needed in the next decade. Green skills are wide ranging and will be vital to delivering our future ambitions across sectors from nature‑based tourism, land and environmental management, forestry, green finance, and low carbon farming. We will work with NatureScot to develop this analysis to produce an assessment of the nature‑based jobs we need for the transition to a net zero economy in Scotland and how we can develop more nature‑based opportunities.

In this economic crisis we must now, more than ever, draw on our assets to propel our recovery. We have one of the best trained workforces in the world, with a global reputation for providing high‑skilled employees - supported by first‑class schools, colleges and universities. As businesses struggle and people lose their jobs we must build on these strong foundations to help people succeed and get back into work.

Support for families in poverty

We are the only country in the UK to have statutory income‑based targets to reduce and eradicate child poverty, but the progress we have seen is now at risk because of the crisis.

As part of meeting this statutory obligation, we are committed to ensuring everyone can access work that is fair and offers flexibility and opportunity for all. Our ability to take the necessary action on this is hindered by the continued reservation of employment law to the UK Parliament, but we will actively work with employers to expand payment of the real Living Wage, with the aim of 25,000 additional workers receiving payment. By embedding the principles of fair work across Scotland, we will improve livelihoods and reduce social inequality. This will help some of the most vulnerable groups in Scotland - such as lone parent families and families with disabilities - as well as women, who more often than not are expected to shoulder the main responsibilities of childcare.

We will also ensure Scottish Government resources are targeted as far as is possible at jobs with fair wages, including payment of the living wage as a minimum, and high standards.

Even before the crisis, access to good‑quality, fair work was particularly important for those most at risk of poverty. We will make an additional £2.35 million available for our Parental Employability Support Fund (PESF) in 2020‑21, which already provides intensive person‑centered employability support for parents in and out of work. The new funding, which brings total in year investment in PESF to £7.35 million, will enhance local delivery of targeted key worker support for young and disabled parents - both groups who face particular challenges in finding and securing employment - and improve the alignment of PESF with Early Learning and Childcare. As a whole, PESF is expected to support 17,500 low income parents to access or progress in work, helping them to increase their income from employment and lift them and their family out of poverty.

We will also extend Fair Start Scotland services for a further two years to March 2023, providing support for unemployed disabled people, and people with health conditions and other barriers to moving into fair and sustained work.

No One Left Behind

Our No One Left Behind agenda aims to support those who face the biggest barriers to employment. Working collaboratively with Local Government, Third Sector and other partners to deliver our shared ambition for a more responsive, joined up and aligned employability system in Scotland has never been more important. Our overall investment in employability, including the Youth Guarantee, will have a particular focus on helping those most adversely affected during the health and economic crisis - young people, disabled people, minority ethnic communities, and lone parents. Over the next year we will work with partners to co‑design and implement a Shared Measurement Framework, setting out a consistent way of collecting and reporting data within employability services. This will ensure that the right information is available across the system to drive learning and improvement. Partnership is key to our approach. We will also co‑design a Customer Charter setting clear expectations on how people will be treated when accessing employability support, and a National Standards Guarantee to balance the need for local flexibility with national coherence.

The pandemic has highlighted even more starkly the existing disparity in employment for workers from a minority ethnic background. It has highlighted the additional challenges faced by minority ethnic workers who are over‑represented in jobs with increased exposure risks to COVID-19 and/or who are over-represented in work that is not secure and who have seen that work stopped. We will publish, in September, a recruitment toolkit designed to support employers in recruiting more people from minority ethnic backgrounds as part of our efforts to improve outcomes for minority ethnic people moving into, staying in and progressing in employment.

The pandemic has also had a disproportionate impact on women's jobs and incomes. Women have made up the majority of the workforce in many 'shut down' sectors, and in our care sector, as well as undertaking additional unpaid caring responsibilities. The vast majority of lone parents are women. All of this has made them more exposed to the impacts of earnings reductions or losses. Evidence highlights the potential damage the pandemic could do to women's employment and career opportunities longer term and the potential to increase both the gender employment gap and the gender pay gap in coming years. We will review the actions within our Fairer Scotland for Women: Gender Pay Gap Action Plan to ensure the actions are fit for purpose and will effectively support our economic recovery through the pandemic and beyond.

Workplace Transformation

The world of work in Scotland has undergone some radical changes during the lockdown period to prevent transmission of COVID-19 and many businesses and employees will want to capture perceived improvements, whilst also resolving challenges involved in the new ways of working.

We will support flexible work experts TimeWise to develop and sustain a fair, flexible work programme for Scotland by the end of March 2021, as they deliver high‑quality support to help 300 employers adapt to flexible working through COVID-19 and beyond. Timewise will also support the recruitment of 40 employer‑facing employability advisors who will help a further 1,000 employers and 1,000 individuals to implement and benefit from fair and flexible work opportunities. Groups such as low income parents, carers and parents with disabled children, as well as older workers, and those with health issues, will access support from 'fair flex' trained advisors which will ultimately reduce the inequalities they experience on a daily basis. We will analyse the availability of flexible work opportunities before, during and after the pandemic and use this data to ensure that these opportunities are available for workers across all regions and sectors in Scotland.

As recommended by the Advisory Group on Economic Recovery, we will assess the scope for establishing a new centre for workplace transformation. Helping businesses and organisations to become more inclusive as we emerge out of recession into recovery and renewal will be a priority. Work is already underway to understand what we can learn from successful businesses, international leadership approaches and innovative thinkers so that such a centre can have a significant impact on Scottish business performance, productivity, innovation, Fair Work, workforce resilience and worker wellbeing.

The effects of COVID-19 have made many businesses and people rethink the concept of where and how work takes place. For many, working in large, centralised offices is not the current norm, and may not be again. For many home‑working from the kitchen table or spare room is not a long‑term solution. Local work hubs formed by repurposing existing buildings, or by developing new 'pop‑up' communities, have the potential to create quiet, safe, hygienic and connected work environments, offering greater choice, flexibility and security for people to work locally and for companies to create productive work environments for a distributed workforce. As part of the Work Local Challenge Programme we will work with partners on innovation and deployment of local work hubs and office space solutions to enhance workplace choices. We will engage with the business community to enhance the choices available to work more locally and flexibly. As part of this we will undertake analysis to understand the economic, social, environmental, well‑being and inclusivity impacts that a shift to remote working might have, and use this to identify the scope for a more enduring shift toward local, near home and remote working.

We are expanding the Productivity Club Pilots, in collaboration with the Scottish Council for Development and Industry (SCDI), establishing three new pilots in North‑East Scotland, the Highlands, and the South of Scotland, alongside continued development of the Edinburgh and Glasgow Pilots which already have 1,000 members since launching in autumn 2019. These provide networks of businesses focused on doing things better. Through collaboration and peer‑to‑peer learning, sharing advice, experiences and knowledge they help businesses boost productivity, drive innovation and create sustainable economic growth.

As part of any learning from and response to the crisis, we must ensure we recognise the specific determinants of poverty and inequality, and the role for business to provide targeted support for key groups. There is a risk that those who may have more limited capacity for work - and are therefore at greater risk of poverty - may be left behind, whether because they have health concerns around a return to a physical workplace, are unable to access the necessary childcare, or find their social care or informal support can no longer meet their needs, particularly for older or disabled workers. Equality and human rights will be at the heart of our approach and we will work with stakeholders, businesses, and others to include considerations of future workplace adjustments, flexible working, and support for those with caring responsibilities in any future work on workplace transformation, providing better employment opportunities for all.

Boosting our digital capabilities

Digital infrastructure and our information and communications sector have been central to our economic and societal resilience throughout this crisis. Many businesses have been able to mitigate some of the impact of the global pandemic through the use of digital technology or by quickly adopting digital technology. This acceleration in digital adoption has protected health, delivered learning, and for many people it has totally reshaped the way we think about work.

However, we know that many businesses and households struggle to keep pace with the accelerated rate of digitalisation, and many may be reluctant to invest in technology at a time of economic uncertainty. Our task is to ensure they can invest and embrace digital technology confidently, and we will work with all sectors to articulate the benefits, and unlock opportunities.

We want to increase Scotland's digital confidence because we know that access to digital tools can boost business productivity and people's wellbeing by enabling them to access vital public and private services.

Our response, set out below, is fourfold. We will:

  • take steps to intensify and grow the contribution of our tech sector and create a world-class tech ecosystem
  • help every business get online with new digital adoption support and acceleration of our own digital adoption
  • take steps to end digital exclusion so that poverty is not a barrier to accessing digital, and
  • drive up connectivity across Scotland.

Creating a world‑class tech ecosystem

We want to drive growth in some of our most promising economic sectors such as software, fintech and data driven businesses. These industries are not only an exciting part of Scotland's economic future with strong potential to create high value jobs - they are also catalysing innovation in our more traditional industries. In fact, the distinction between the tech sector and traditional sectors is to some extent artificial - some of our fastest growing 'tech' companies are built around igniting innovation within traditional sectors like finance, healthcare and tourism. Eventually they will all become part of 'mainstream' economic activity.

Creating a hotbed of activity around tech innovation is central to driving innovation and investment in our economic future. That is why we commissioned Mark Logan, former Skyscanner COO, to undertake an independent review of the Scottish tech ecosystem with the aim of identifying actions required to raise our tech sector to world‑class status. Mr Logan recently published his conclusions centering on an ambitious strategy to establish Scotland as a leading startup nation with recommendations spanning education, entrepreneurship, attraction of executive‑level talent and investment. The Review has been endorsed by key figures across business, technology and academia as potentially transformational.

The Scottish Government will back this strategy and commits to establishing a national network of 'Tech Scalers' - world‑class startup incubators delivering the best available mentoring and training for our company founders. We aim to have five operational scalers by end 2021/22 and aim to create between 300‑500 high‑quality new startups over 5 years.

We will aim to create a part public, part privately funded Ecosystem Fund that will make strategic investments in the organisations and activities that support our startups to succeed. Examples include investing in key tech conferences, the creation of new startups, and extracurricular support to develop the next generation of tech talent.

We need to provide reskilling opportunities for people whose employment was impacted by COVID-19 and need support to transition to new digital careers - where there are still significant skills gaps. We will leverage the National Transition Training Fund wherever possible to encourage more people to take advantage of the digital skills training opportunities that we already have in Scotland.

We will work in partnership with the technology industry to develop and drive progress on recommendations around education, entrepreneurship and investment.

In recognising the enhanced role for technology in government and public services, we will extend the internationally renowned CivTech programme, building further on the existing programme and expanding its role at the heart of an international alliance of similar organisations that are stimulating innovation in the government tech sector.

Digital Adoption

Businesses that have coped best during the pandemic are invariably those who have been able to adapt with the help of digital tools: pivoting quickly to homeworking, adopting cloud computing for speed and collaborative working, using new digital platforms to access customers and to repurpose or diversify products and services. Scotland's SME base, however, needs support to adopt digital technologies, with many still lacking basic capability and fewer still using more sophisticated technologies. On a practical level, inability to innovate could severely limit the impact of any increased investment in digital infrastructure. More positively, there is compelling economic evidence that the adoption of digital technologies supports growth, productivity, economic inclusion, regional income equality and the creation of high value jobs.

In response, in August we provided an additional £1.5 million to nearly triple the capacity of the DigitalBoost programme for the rest of the financial year, to £2.3 million. This programme provides expert advice, capacity‑building, and coaching tailored to the specific digital needs of businesses. It will support those businesses to learn not just about how to adopt productivity enhancing digital technologies, but also to invest in skills to deliver successful implementation and to keep pace with future technological progress.

The Scottish Government will also put digital at the heart of our own services, building on the positive changes we have seen in areas like healthcare digital adoption, and we will boost digital capability. We will shortly update Scotland's Digital Action Plan, in conjunction with Local Government, setting out actions to ensure that we build upon this experience to deliver sustainable social, economic and environmental change. This will accelerate the transformation of key digital public services and the development of common digital platforms and components that improve quality, support cross‑organisational working and enable resources to be redirected to front line, local delivery.

We will invest in modern, efficient shared services within Scottish Government, introduce new controls to ensure best value and develop the skills needed to realise the benefits of digital technology and data science. We will drive forward digitalisation of planning as a key public service. We want this to transform the planning system by making it much more inclusive, efficient and- through collaboration and opening up data-, a vital enabler in economic and societal recovery. This will enable local people to play a more active role in the development and re‑imagining of their places and create greater opportunities to influence positive change. For business and industry this will create greater certainty and help attract and target investment more effectively. We will publish a Digital Strategy for Planning in November this year, setting a long‑term vision and direction, followed by the launch of an ambitious five‑year digital transformation programme in early 2021. This programme will also support jobs. Initial estimates suggest 1,600 jobs over 10 years in the construction and development sectors will be created with more detail to be set out in the Strategy.

We are also determined to ensure that new digital services are designed to be inclusive and operate to high ethical standards which will protect personal privacy. The Scottish Approach to Service Design ensures that users are consulted when design decision are made. We are supporting a programme to fund a consortia of organisations (geographically spread around Scotland) to develop pathways of training in cyber security, specially designed for neurodivergent people, from engagement, through training and into employment. And we are funding a programme led by Skills Development Scotland to broadcast interactive sessions to young people in schools and at home, enabling them to hear from, and receive learning input from, cyber security industry experts in order to encourage them to consider learning and careers in cyber security.

Cyber security is the critical underpinning factor that will ensure Scotland is safely and securely able to develop smart digital solutions to meet the needs of the immediate and long‑term economic future. The cyber security industry can play an important part in the economic recovery of Scotland and it is important that we are able to meet the demand for cyber security professionals, through meeting skills shortages.

Digital inclusion

The urgent need for increased digital inclusion has been thrown into sharp relief by the pandemic, which has accelerated digital adoption by many, whilst compounding the digital divide for others. Closing that divide is a clear example of where economic and social imperatives align - being connected is now a vital part of our quality of life as well as key to securing employment.

Closing that gap now rests not only on the quality of Scotland's digital infrastructure, but on the ability of people to be able to afford data and devices, and acquire the skills and confidence to exploit the benefits and opportunities of being digitally connected.

We are doing that through Connecting Scotland, a Scottish Government programme set up in response to COVID-19 which, in collaboration with Local Government and the Third Sector, provides iPads, Chromebooks, free data and support to develop digital skills and confidence online for people who are digitally excluded due to low incomes. In its initial phase, we committed £20 million to support people who were at risk of isolation due to COVID-19 because they were in the highest clinical risk group group ('shielding') or the higher risk of severe illness group, and we have subsequently moved on to work with low income households with children, and young people leaving care, as part of our child poverty approach.

Building on these successes, we are now committing an additional £23 million to help even more digitally excluded people and households with a digital and data safety net, providing them with a device and extending our previous offer of unlimited data and support and training from one year to two for everyone the programme has helped. This will bring the total number of people we have helped to get confidently online up to 50,000 by the end of 2021.

Connecting Scotland will help bring 50,000 people online

Digital connectivity

To deliver our ambitions for digital innovation, and ensure a digitally inclusive society, requires Scotland being fully digitally connected. Our Reaching 100% (R100) programme will ensure every premises in Scotland can access superfast broadband. It will extend full‑fibre broadband to much of rural Scotland, going beyond our original commitment, and helping to deliver future‑proofed economic, social and environmental benefits for the whole country. Our 100% commitment will be delivered through a combination of the R100 contracts, our Scottish Broadband Voucher Scheme and commercial coverage.

Work on the south of Scotland contract began in summer 2020 where we will provide over 99% of the 21,000 eligible premises for R100 with access to a full‑fibre solution, leaving in the region of just two hundred premises in this area requiring to be connected by our voucher scheme. Work on the central lot has now also begun, and of 36,500 eligible premises, the contract we have signed with BT - alongside greater than anticipated commercial build - will reach around 88% of them. It is expected that the majority of the contract build in central and the south of Scotland will be completed by the end of 2023.

We have always recognised that the contracts - in which we plan to invest almost £49 million in 2021/22 alone - would not solely deliver our commitment. That is why we developed the Scottish Broadband Vouchers Scheme (SBVS) which will provide grants to broadband customers, to support access to a range of technologies and suppliers and helping to ensure our commitment that everyone can access superfast broadband by the end of 2021 is achieved. We have launched an online checker which allows people to examine at a premises level what the R100 programme will deliver for them and by when.

This investment will help deliver social, economic and environmental benefits for all of Scotland, not least as part of our economic and social recovery - enabling innovation and the creation of highly skilled jobs; opening up remote working, social and leisure opportunities; delivering digital health and other new public services; and reducing travel, including the need to commute. It will also help improve Scotland's mobile connectivity - providing the backhaul needed to support the growth of 4G and 5G services.

We will continue to improve mobile coverage across Scotland through delivery of 4G infrastructure and services through the Scottish 4G Infill programme. This is backed by £15 million of Scottish Government funding and £10 million from the European Regional Development Fund, addressing 40 of Scotland's mobile 'notspots' - areas with no mobile coverage. Through the Scotland 5G Centre, we are also establishing local Innovation Hubs across Scotland with access to a 5G Testbed, providing focal points for digital learning and the continued development of this technology.

The public sector, with a significant estate, has a key role to play in enabling the development and rollout of the largescale infrastructure needed for 4G, 5G and other telecoms. Before the end of 2020 we will publish rental guidance and standardised documentation to enable those companies to access Scottish Government estate to site infrastructure. We are also committed to exploring the feasibility of how collateral connectivity benefits to trackside communities could be realised as part of our wider considerations on rail network connectivity enhancements.

Investing in a net‑zero economy - building momentum

Scotland was one of the first countries in the world to declare a global climate emergency, and in the year since that declaration we have taken significant action to tackle that emergency head on. Last year, the recently‑established Climate Emergency Response Group showed us the sort of collaboration required, with the Programme for Government setting out clearly how we would respond. We have delivered against all of our commitments, and now we will adapt and scale up our response, ensuring a green recovery is at the heart of economic recovery.

Last year, we set out a Green New Deal to rethink the investments we make, and how we make them. This deal has now been expanded and enhanced to form the basis of our commitment to a Green recovery.

The Deal leveraged the power of public and private sector investment, targeted at the right projects to create and sustain quality jobs. At its heart was harnessing the power of the Scottish National Investment Bank, and launching our £3 billion Green Investment Portfolio. We will also introduce a Green Growth Accelerator to attract green finance to Scotland. While this joint working has been impacted by the need for partners to focus on the immediate response to COVID-19, we are continuing to make progress.

This year we are building on this momentum, ramping up multi‑year investments to send a clear signal to supply chains to prepare to help us deliver the net zero transition, including by investing in the people needed to deliver this significant economic change. This includes setting out how we plan to invest the first tranche of our £2 billion Low Carbon Fund, allocating £100 million in our Green Jobs Fund to boost opportunities in this area, and investing a transformative £1.6 billion over the next parliament to set us on a path to eliminating emissions from heating buildings.

Our statutory Climate Change Plan sets out a clear pathway of policies that deliver and drive the investment, jobs and skills required to transition to net‑zero. The Climate Change Plan that we published in early 2018, was due to be updated in April 2020, but was necessarily postponed as a result of the COVID-19 pandemic - it will now be published before the end of 2020, to incorporate green recovery proposals. This will be accompanied by a new public engagement strategy.

Our Infrastructure Investment Plan, will be published in September, providing the strategic framework for the next five years' pipeline of projects and programmes - with expected value of around £32 billion over five years. This investment will be targeted to boost inclusive economic growth, build sustainable places, and increase delivery of our climate and environmental ambitions.

Our Capital Spending Review, to be published at the end of this year, will further reinforce our momentum on building certainty, supporting supply chains and creating the conditions for a fair and green economy.

As we move into economic recovery, it is vital that we support Scottish businesses to decarbonise to ensure that recovery is green.

Themes: Supporting local economies and community wealth building

Action to date

  • £500 million for bus priority infrastructure over the next five years
  • £17 million Low Carbon Transport Loan scheme
  • £2.5 million LEZs Support Fund
  • £2 million to take ideas for sustainable and zero carbon mobility to fully‑formed propositions suitable for large scale investments
  • £83 million in our Future Transport Fund
  • Increase active travel investment in 2020/21 to over £100 million
  • £35 million Low Carbon transport loan fund
  • £5 million low carbon rail investment
  • Continued £10 million support of Climate Challenge Fund
  • Consult on ambition for zero or ultra‑low emission city centres by 2030

2020‑21 PfG announcements

  • New funding of over £500 million over five years for active travel infrastructure, access to bikes and behaviour change schemes
  • Take forward our ambitions for 20 minute neighbourhoods - the creation of liveable, accessible places, with thriving local economies, where people can meet their daily needs within a 20 minute walk
  • Identify vacant and derelict sites for green infrastructure initiatives
  • £2 million Islands Green Recovery Programme
  • Updated Digital Action Plan and continued work on R100 programme
  • Introduce a network of regional hubs to empower communities to develop local solutions to making the transition to net‑zero and climate resilient living
  • Develop a network of Climate Action Towns
  • Invest £4 million in 2021 in a zero emission drivetrain testing facility
  • Establish a zero emission heavy duty vehicle programme with a minimum investment of £1 million

Themes: Transforming Heat and Energy Efficiency in our homes and buildings

Action to date

  • Launched the Heat Transition Deal, including £20 million to decarbonise heating in social housing, £2 million capital investment for remote and off grid communities through our flagship CARES programmes and targeted support to enable affordable housing to meet zero carbon housing standards
  • Additional funding for domestic energy efficiency, bringing total spending in 2020‑21 to £162 million
  • On track to deliver of £30 million in renewable heat projects
  • By the end of 2021, we will have allocated over £1 billion since 2009 to tackling fuel poverty and improving energy efficiency.
  • The Scottish Government's total investment in domestic energy efficiency from 2013/14 to 2018/19 was £636m. These schemes have helped over 150,000 households throughout Scotland to benefit from energy efficiency measures. Over the lifetime of the measures installed, these Scottish households will cumulatively save over £854 million on fuel bills and reduce emissions by over 3.4 million tonnes of CO2
  • Created steering group of experts from construction, housing and commercial property sectors to advise on introduction of new standard to require new buildings consented from 2024 to use renewable or zero emissions heating
  • Develop a Fuel Poverty Strategy in 2020 to be published in 2021 with a target date of 2040 to tackle the root causes of fuel poverty

2020‑21 PfG announcements

  • Over the next Parliament we will invest nearly £1.6 billion in transforming our buildings to ensure that emissions from heating are eliminated by 2040 to remove poor energy efficiency as a driver of fuel poverty. The deal uplifts Heat and Energy efficiency spend from £112m in 2019/20 to £398m p.a. in 2025‑26 and will include:
    • At least £95 million to decarbonise the public sector estate
    • Opening the £50 million Green Recovery Low Carbon Infrastructure Transition Programme (LCITP)
    • Up to £50 million to invest in significant energy efficiency improvements to the Royal Botanic Gardens in Edinburgh
    • £25 million for zero carbon energy infrastructure and heat networks for residential and commercial premises along the river Clyde's path
    • Additional £55 million to support scale up of energy efficiency programmes
  • Set out our vision and route map for transforming the way we heat Scotland's buildings by publishing a draft Heat Policy Statement and refresh the Energy Efficient Scotland Route Map alongside the updated Climate Change Plan, to set out a clear pathway towards zero emissions from heat in buildings
  • Establish an expert group to make recommendations to Scottish Ministers on the scope of a potential heat pump sector deal
  • Launch a scoping consultation in autumn 2020 on standards for new buildings requiring them to use renewable or zero emission heating from 2024

Themes: Transitioning industrial, manufacturing and energy sectors to net‑zero

Action to date

  • £10 million funding for Hydrogen pilot schemes
  • Additional £10 million funding for Wave Energy Scotland
  • Energy Statement to set out the extent to which renewable and low‑carbon energy will need to combine to meet net‑zero
  • Commitment to decarbonise scheduled flights within Scotland by 2040 and decarbonise Scotland's passenger rail service by 2035
  • Scottish Water to become a zero carbon user of electricity by 2040
  • Decarbonise public sector fleet by 2025
  • New Electric Vehicle funding of £5 million to support transition to decarbonised police fleet
  • Infrastructure Commission will bring a low or zero carbon focus to all our future infrastructure investments
  • Develop the 4th National Planning Framework aimed at radically accelerating emissions reduction

2020‑21 PfG announcements

  • New £100 million Green Jobs fund, investing alongside a range of sectors - such as manufacturing, tech, and land based organisations - to support new and increased opportunities for green job creation across Scotland
  • £60 million to support decarbonisation of industrial and manufacturing sectors including the £34 million Scottish Industrial Energy Transformation Fund and the £26 million Low Carbon Manufacturing Challenge Fund
  • Establish a Grangemouth Future Industry Board
  • Continue to support and invest in the development of CCUS projects in Scotland and commission a suite of research projects for CCUS
  • Develop a Carbon Capture and Utilisation Challenge Fund
  • Publish a refreshed Energy Strategy
  • £6.9 million of funding for SGN's H100 project using green hydrogen to heat homes
  • Deliver a Hydrogen Policy Statement and Hydrogen Action Plan as a companion to the Climate Change Plan Update

Themes: Skills and training for Green Jobs

Action to date

  • Produce and publish Climate Emergency Skills Action Plan
  • Support a new 'Climate Solutions' course and qualification for public and private sector leaders

2020‑21 PfG announcements

  • £60 million Youth Guarantee including increased opportunities for 'green' apprenticeships across public sector bodies
  • A £25 million National Transition Training Fund aimed at bridging the skills gap between those facing unemployment and sectors with greatest potential for future growth, including focus on provision of green skills in areas of immediate demand like heat and energy efficiency
  • Boost youth employment opportunities and target future skills and capacity requirements in nature and land‑based jobs by expanding existing apprenticeship and undergraduate schemes in public agencies - including Scottish Forestry and Forestry and Land Scotland to double their existing commitments to provide opportunities for young people
  • Develop a Green Workforce and Skills Development Package with an initial skills gap analysis undertaken by NatureScot
  • Publish the Climate Emergency Skills Action Plan

Themes: Investing in our resilience to climate change and future pandemics

Action to date

  • Continue to provide £42 million annually to local authorities for flood protection and increased funding for the Flood Resilience Forum to £189,000 in 2019‑20

2020‑21 PfG announcements

  • Extra £150 million for flood risk management in addition to continuing to provide £42 million annually to local authorities
  • £12 million in coastal change adaptation
  • Create a Supply Chains Development Programme across key sectors of the economy, including where we see genuine sustainable economic potential or resilience for future pandemic waves.

Themes: Investing for a Green Recovery and mobilising private finance

Action to date

  • £230 million "return to work" includes Green recovery package of £66 million
  • A three‑part digital investment package, totalling £35.5 million
  • Committed almost £40 million for local authorities to spend on 'pop‑up' cycle lands and wider pavements
  • £62 million Energy Transition Fund
  • Green Investment Portfolio to identify £3 billion of projects ready for green finance investment
  • committed to invest £220 million of fresh seed funding in 202021 as part of the £2 billion capitalisation pledge to establish SNIB
  • Mobilise £12.6 billion public procurement
  • Green Growth Accelerator £1 million

2020‑21 PfG announcements

  • Committed an additional £2 billion of infrastructure investment over the next parliamentary session to stimulate demand and create jobs in the transition to net zero
  • The Scottish National Investment Bank is on track to open this year
  • Will launch the £3 billion Green Investment Portfolio
  • Continued commitment to developing and launching Green Growth Accelerators
  • Attract global investment by signalling our intent to be ambitious, create first mover advantage and a clear, stable and long term commitment to net zero
  • We will develop tools and guidance to support a green recovery and our wider climate and circular economy ambitions through procurement

Themes: Scotland's land and natural economy

Action to date

  • £20 million for peatland restoration in 2020‑21 with a commitment to invest more than £250 million over 10 years
  • Expand investment in forestry by £6 million in 2020/21 to over £64 million
  • Commitment to plant an additional 12,000 hectares of forest supported by an additional £5 million investment
  • £40 million investment in the Agricultural Transformation Programme
  • Increase funding for Biodiversity Challenge Fund to £5 million
  • Commitment to establish a new virtual centre to co‑ordinate marine climate change science and research in response to the global climate emergency
  • Make use of Regional Land Use Partnerships from 2021

2020‑21 PfG announcements

  • Additional £100 million to Scottish Forestry to increase new planting alongside £30 million to Forestry and Land Scotland to expand Scotland's national forests and land by an additional 18,000 Ha per year by 2024. A further £20 million will go to further increase nursery stocks
  • Committed to significantly increasing the rate of peatland restoration
  • Continue to support biodiversity, including £3 million for the Biodiversity Challenge Fund in 2021‑22 alongside high‑level statement of intent on biodiversity before the end of the year
  • Pilot mini‑forests to trial innovative approach to restoring biodiversity
  • Continuing to develop Agricultural Transformation Programme utilising the Agricultural Transformation Fund, including a capital grant scheme
  • £70 million fund to improve local authority refuse collection infrastructure and develop a new route map to reduce waste and meet our waste and recycling targets for 2025
  • Introduce legislation to increase the carrier bag minimum charge from 5p to 10p
  • Continued funding for the Scottish Land Fund providing £10 million per year to help communities purchase assets
  • We will bring forward recommendations for new mechanisms of agricultural support that secure a productive sector better able to contribute towards delivering Scotland's world‑leading climate‑change outcomes and promote fresh employment opportunities.

Infrastructure and capital investment - driving our net zero transition

Infrastructure investment is one of the strongest levers available to deliver economic wellbeing, good jobs and growth. We have already committed to the most ambitious long‑term level of infrastructure spend ever in Scotland and our National Infrastructure Mission will steadily increase Scotland's annual infrastructure investment until it is £1.5 billion higher by the end of the next Parliament than it was in 2019‑20.

We are also on track for the Scottish National Investment Bank to open this year. It will be uniquely positioned to influence and shape the direction of Scotland's economic recovery. The economic impacts of COVID-19 reinforce the need for the Bank and for mission‑oriented investment. We will capitalise the Bank with £2 billion over 10 years, to deliver it's primary mission of supporting the transition to net zero carbon emissions. Other missions expected to be set for the Bank focus on investing in places to create opportunities, tackling inequalities, and supporting innovation in response to demographic challenges. Investing across these missions will help deliver a wellbeing economy for Scotland, and build greater resilience and international competitiveness in the face of future potential economic shocks. The Bank will hold to the principles of equality, transparency, diversity and inclusion.

We have also already committed an additional £2 billion of low carbon infrastructure investment over the next parliamentary session. This Programme for Government details the first the first tranche of this, providing a multi‑year commitment to funding for heat and energy efficiency, reprioritising road space for public transport use and decarbonising industry, including manufacturing.

We are investing £1.6 billion to transform our heat and energy efficiency programmes

We believe a sustained, long‑term approach to investment in heat and energy efficiency will create and protect good and green jobs, strengthen supply chains, deliver new skills, boost household incomes and reduce fuel poverty. That is why we are now setting out a significant package of investment designed to transform how we heat our homes and buildings.

£1.6 billion to transform heat and energy efficiency in our buildings

Currently over 86% of domestic buildings use fossil fuels for their heating, and over 50% of non‑domestic buildings use fossil fuels. In order to achieve Scotland's net‑zero emission targets, emissions from space and water heating need to be effectively eliminated by 2040‑45. This will require action to continue to reduce demand for heat in homes and buildings through energy efficiency measures, and replacing fossil fuel heating systems with renewable or zero emissions sources.

Current rates of deployment need to rapidly increase, and significant and sustained government intervention is required to accelerate the transition away from natural gas and oil based heating systems to renewable or zero emissions alternatives. We will grow our overall capital investment on heat and energy efficiency year‑on‑year so that from April 2021 and over the next Parliament we will invest an additional £1.6 billion in transforming our homes and buildings, setting us on a clear path to eliminate emissions from heating by 2040-2045 and removing poor energy efficiency as a driver of fuel poverty. We will do this by guaranteeing our existing capital commitments in heat and energy efficiency for the life of the next Parliament - a multi-year certainty of over £900 million - together with a further £425m, bringing our total capital spend on those existing programmes to over £1.3bn. To accelerate our transition to net-zero we will also provide additional capital investment to wider heat and energy efficiency, low carbon, and renewable programmes, with funding of £225 million for specific projects detailed in this section. These funding increases will more than double our annual capital investment investment in heat and energy efficiency by the end of the next Parliament, from £112m in 2019/20 to £398m in 2025/26. Improved energy efficiency brings with it long‑lasting positive outcomes for the people who benefit, not least older people, through warmer, easier‑to‑heat homes, improving health and quality of life.

Our ambition is - as a minimum - to see the rate of renewable heat installations in new and existing homes and buildings double every year from a current baseline of 2,000 domestic installations per annum in 2020 to 64,000 homes fitted in 2025 - a cumulative total of around 126,000 homes. This pace will enable the sector to continue to maintain high levels of quality assurance for consumers, and see installers recruited and re‑skilled, toward an expected peak installation rate of 250,000 homes per annum in the 2030s. This expansion in installation sends a clear signal that the rate of growth needs to be the maximum possible, building the renewable heat supply chain from its current baseline. Our heat and energy efficiency programmes will include a range of schemes to support that ambition, in addition to the support already available through the Low Carbon Infrastructure Transition Programme, District Heating Loan Fund, Warmer Homes Scotland, Area‑Based Schemes and our non‑domestic programme. This support will provide a mix of grant funding and loans to help businesses and homes across Scotland.

Our investment package will create jobs related to renewable heat and energy efficiency - we expect this to be at least 3,000 jobs supported in the first year of the programme, growing to at least 5,000 in the final year (2025‑26). Beyond that we expect the market, and related jobs, to continue growing. Investment in Heat and Energy Efficiency is, therefore, a critical part of our green recovery and our Green New Deal for Scotland.

We will start by opening a new funding call of the £50 million Green Recovery Low Carbon Infrastructure Transition Programme (LCITP) in September to support low carbon and renewable heat projects in Scotland. This is a capital funding call seeking projects with a broad low carbon infrastructure focus on heat decarbonisation, smart energy systems, local energy systems and demonstrator projects. This funding is available to business, community projects and local authorities and the LCITP has supported a number of successful projects in recent years, including the installation of a new £6 million low carbon district heating system in Stirling. This system uses cutting edge renewable technologies to harness energy from waste water, delivering low carbon heat and energy to a number of public buildings in Stirling.

As part of our £1.6 billion investment we will provide at least £95 million to support the decarbonisation of the public sector estate, up to £50 million to invest in significant energy efficiency improvements to the Royal Botanic Gardens in Edinburgh and £25 million to support pioneering heat network projects on the River Clyde as part of our Mission Clyde.

This investment in the Clyde is part of our work on the Mission Clyde and a good example of our commitment to put 'place' at the heart of economic and green recovery. We are committed to making the Clyde an engine of sustainable, inclusive economic growth for the city, the region and Scotland. Parts of the region suffer disproportionately from deprivation, and are now suffering disproportionately from the impacts of COVID-19. We have already committed £10 million of funding for Mission Clyde projects this financial year and we are committing a further £25 million to support zero carbon energy infrastructure and heat networks for residential and commercial premises along the river's path.

These discrete projects are important examples of the varying challenges of decarbonising heat in buildings and the scale of investment required. They also demonstrate how decarbonising our buildings can have multiple cross‑benefits - from securing a sustainable future for a beloved biodiversity leader and tourist destination to demonstrating the potential for our natural assets to change the way we source our heating.

We were due to publish a Heat Policy Statement and updated Energy Efficient Scotland Route Map in June this year, but this had to be delayed due to COVID-19. We will publish a draft Heat Policy Statement and refresh the Energy Efficient Scotland Route Map by the end of this year, setting out our vision and route map for transforming the way we heat Scotland's buildings on a clear pathway towards zero emissions.

We will also establish an expert group to make recommendations to Scottish Ministers on the scope of a potential heat pump sector deal for Scotland. This group will be established by October and will be tasked with providing an interim report in March and final recommendations before Summer recess.

We will explore the use of statutory mechanisms to ensure existing buildings meet the energy efficient standards we need, and we will launch a consultation on standards for new buildings requiring them to use renewable or zero emission heat from 2024. We will begin work to put in place the necessary regulatory measures needed to drive the transition away from polluting fossil fuel based heating systems in existing buildings. These measures will be set out in the Heat Policy Statement and updated Energy Efficient Scotland Route Map due for publication later in 2020.

We must ensure we adapt our response to meet our twin objectives of reducing both fuel poverty and emissions from heat. In line with the recommendations from the Just Transition Commission, we will continue to build on the successful Energy Efficient Scotland delivery programmes, which have focused on the aim of removing energy efficiency as a driver of fuel poverty. We will provide more 'whole house' retrofits to more fuel poor households, replacing fossil fuel heating and improving insulation to reduce energy costs and carbon emissions.

Taken together, this package of investment provides the foundations for a transformation of how we heat our homes and buildings. We are creating the policy conditions, supported by substantial, long‑term investment, that will provide confidence to our people, businesses and investors to commit as well.

Attracting private investment to Scotland

With around £300 trillion of global capital flows, we know that the market for green finance is burgeoning, and Scotland's natural assets and reputation for innovation make it a highly attractive place for that investment. We will launch a £3 billion Green Investment Portfolio - a package of investable propositions we can take to global investors to secure investment into Scotland. This supports our ethical finance ambitions by matching projects which are reducing emissions with investors so we can fully maximise their potential and promote them globally. We will now launch the first round of projects in September 2020. The value of investment opportunities to projects and companies within this initial portfolio will be £1.16 billion, covering a range of different sectors across Scotland from environmentally sustainable commercial real estate to low emission transportation and green energy.

Decarbonising Scotland

We have already taken significant action to tackle the greatest contributors to carbon emissions, including through our Transport Mission Zero work to phase out petrol and diesel vehicles. We have made an extra £26 million available through our Low Carbon Transport Loan Fund to support Scottish households and business in purchasing ultra‑low emission vehicles. This year we are expanding it to include used electric vehicles, removing more upfront costs for people, and increasing the accessibility of the scheme for lower income households.

We will invest £60 million, to support the industrial and manufacturing sectors during a green economic recovery to overcome private sector investment and transition challenges. This will done through the £34 million Scottish Industrial Energy Transformation Fund, supporting the industrial and manufacturing sectors to fund investment‑ready energy efficiency technologies and deeper decarbonisation studies, and the £26 million Low Carbon Manufacturing Challenge Fund, to support innovation in low carbon technology, processes and infrastructure.

We will provide further details on this as part of our Climate Change Plan update.

By maximising the contribution of manufacturing industries we can make stronger progress towards net zero while also creating opportunities to innovate and create new jobs. Such innovation will be supported by our investment of £75 million in the National Manufacturing Institute Scotland (NMIS). NMIS is already adding to existing services such as the Scottish Manufacturing Advisory Service (SMAS) to enhance the sector's skills, test new processes or technologies and de‑risk investment.

Within the manufacturing industries, we recognise the particular economic strength provided by the Grangemouth industrial cluster, as Scotland's foremost concentration of industrial and manufacturing activity. However, with that economic strength also comes 30% of all Scottish industrial emissions. A specific focus on Grangemouth is therefore key to the Just Transition. In 2020, we will establish a Grangemouth Future Industry Board to coordinate public sector initiatives on sustaining economic activity at the Grangemouth industrial cluster, whilst supporting its transition to our low‑carbon future. Membership will include representatives of Scottish Government, agencies and Falkirk Council, and it will engage closely with those businesses with an interest in this work. It will focus on work to unlock potential investment that boosts economic development, innovation, longevity and competitiveness of the sites, with decarbonisation woven through all aspects of its work.

Carbon capture, usage, and storage (CCUS) represents a clear area of opportunity for businesses to innovate, and support our wider ambitions. CCUS is essential for delivery of Net Zero 2045 and our Green Recovery. We will continue to support and invest in the development of CCUS projects in Scotland. We will also commission a suite of research projects for CCUS, starting in September 2020, including research on regulatory mapping, that will help shape policy to support the development of new CCUS infrastructure.

While the recent publication of the UK Government's position on business models for the deployment of CCUS in the UK is welcome, there is a pressing need for further clarity on this front by the end of this year, in order to give industry confidence to bring forward investment decisions. We will press the UK Government to provide early confirmation of the allocation of funding from the £800 million CCUS Infrastructure Fund to support the development of CCUS projects and low‑carbon hydrogen production, in Scotland and the rest of the UK.

We will continue to support the North East CCUS (NECCUS), an industry‑led alliance drawn from industry, academia, membership organisations and private sector bodies to promote CCUS in Scotland. We have provided £300,000 to support its establishment, and activities include delivery of the Scottish Net Zero Roadmap, and representing Scotland at UK and European industrial cluster discussions. We will work with NECCUS and Scottish Government agencies on the development of a Scottish Net Zero Roadmap throughout 2021. This is the second phase of work funded through the Industrial Strategy Challenge Fund. It will identify opportunities for inward investment and how to take advantage of low carbon infrastructure to provide a service for the rest of the UK and Europe.

We will consult stakeholders on the scope, operation and governance of a £5 million Carbon Capture and Utilisation Challenge Fund which will deliver funding to projects from April 2022 for two years. Utilisation of captured CO2 (CCU) is a growing but underdeveloped market with opportunities in the food and drink and agricultural sectors amongst others. A CCU innovation fund would provide a stimulus for innovation and by pump priming projects, it will speed up development of market opportunities in Scotland. Resource and capital investment to support the fund would enable projects to develop and test products and to enable capture infrastructure developments at emissions sources for use in utilisation projects.

We will publish a refreshed Energy Strategy which will collate all these actions into one coherent strategy with the collective aim of transition to net zero and to support our green recovery.

We will publish an updated Offshore Wind Policy Statement. This will build on detailed and rolling consultation with stakeholders, and will set out - alongside the Sectoral Marine Plan for Scotland - a new level of ambition for offshore wind in Scottish waters, which will play a vital part in achieving net zero and driving a green recovery.

Supporting innovation in the North East

The North East of Scotland is recognised globally as a centre of excellence in oil and gas and continues to play an important role in our energy mix. This sector, and the skills and expertise it has to offer, will be key to helping to design the diverse energy system we need for the future, including options such as hydrogen production and the development of floating wind and marine energy, with many businesses already diversifying into these areas. However, we know it will be disproportionately impacted by the crisis, with predictions there may be up to 30,000 job losses in the sector. As part of our economic recovery, and our mission to achieve net zero, we must support the region to find new, sustainable, and green opportunities in energy, boosting skills and employment opportunities.

We have established a £62 million Energy Transition Fund to support businesses in the oil, gas and energy sectors over the next five years as they grow and diversify, and help attract private sector investment in the region. The investment, with a focus on the North East, underpins the region's ambitions to become a world leader in the transition to net zero, helping Scotland meet its ambitious targets on climate change. The investment will also benefit the wider Scottish energy sector and supply chain, working with local businesses to support sustainable jobs and maximise inclusive economic growth across the country.

Hydrogen policy

We know that Scotland will require a diverse and balanced energy mix to meet our emissions targets. In order for the energy transition to be successful, security of supply, affordability and access to viable alternative options need to be combined with innovative and smart emissions reduction action. Against this backdrop, it is clear that hydrogen will play a key role in enhancing, supporting and completing the energy transition across a range of sectors, aiding economic recovery through production for the domestic market and export, and generating jobs.

Scotland has a strong track record of supporting Hydrogen innovation and we are committed to continuing this. We will provide £6.9 million of funding for SGN's H100 project in Fife which will be a world‑first programme using green hydrogen to heat around 300 local homes and create an estimated 100 jobs in its first phase.

To take a more strategic approach to hydrogen to capitalise on the success and innovation so far we will produce a Hydrogen Policy Statement and Hydrogen Action Plan to support the expected growth of the hydrogen economy in Scotland and prepare for the role that hydrogen may play in achieving net‑zero targets. This will be done before the end of 2020, as a companion to the Climate Change Plan Update.

Procurement and supply chain initiatives for sustainable economic recovery

The pandemic has exposed vulnerabilities in global supply chains. This is perhaps most acutely felt in relation to supplies of medical equipment. However, focused collaboration across Government and enterprise agencies meant we were able to successfully meet demand in the NHS. Across many areas - notably testing and PPE - we have seen the benefits of much closer links between the private and public sector and it is vital we learn from and build upon that. Scotland's life sciences sector remains a growth sector for the Scottish economy, employs 41,100 people, and makes a disproportionate contribution to Scotland's business research and development (BERD) figures.

To further strengthen the ability of the sector to innovate and to support Scotland's NHS and Social Care sector, we will work to establish a Scottish Health and Industry Partnership to rapidly coordinate work that can benefit both Scotland's economy and our health and wellbeing priorities. This partnership will accelerate innovation in Scotland to solve real problems in the NHS and Social care, creating jobs and opportunities for businesses as we have done with meeting the PPE challenge. This will deliver innovation at scale, maximising regional, academic, and industrial innovation to support delivery of the Scottish Government's Remobilise, Recover and Redesign Framework for the NHS and Social Care and support economic recovery.

We have seen, through working together on PPE, that government can act as a catalyst for supply chain development in areas of strategic interest. We want that level of collaboration to continue. And learning from this experience, we will roll out Supply Chain Development Programmes across key sectors of the economy, where we see genuine sustainable economic potential. These will be targeted at existing and prospective suppliers based in Scotland, and enhance participant companies' fitness to compete for public contracts, help to secure best value for taxpayers and help Scottish suppliers to grow and compete globally. An immediate priority will be analysis of existing supply chains, identification of opportunities for increased local capability and enhanced resilience.

We will also use our power as a large scale buyer to establish a zero emission heavy duty vehicle programme, accelerating the development and uptake of such vehicles in the public and private sectors and creating new opportunities for Scottish companies through the development of innovative solutions. The programme has been developed in partnership between Transport Scotland and Scottish Enterprise with a minimum investment of £1 million in 2020‑21. We will invest in the establishment of a zero emission drivetrain testing facility in 2021, with a focus on hydrogen fuel cells to accelerate the development of these vehicles. We will also establish a new resource to support research and product development in zero emission mobility through pooling academic capability and enabling collaborations. We will also use our procurement activities as an opportunity to promote fair working practices to ensure that contractors adopt such approaches.

Across the bus sector we have seen bold commitments to zero-carbon fleet renewal, and a number of operators are actively engaged in projects to get to battery electric and hydrogen buses on our streets. One of the challenges for the sector has been the greater upfront capital cost of new technologies and associated infrastructure investments, and COVID-19 has undoubtedly elevated these challenges. But, evidence is building that battery-electric buses are moving towards comparable total ownership costs to diesel vehicles, which means we are reaching a pivotal point for our transition to zero-emission transport.

We have recently made an additional £9m available to support immediate ultra low and zero emission fleet renewal investments. In the lead up to the Scottish National Investment Bank launch, engagement is underway with operators on options to support the net-zero transition, and Scottish Enterprise is also providing proactive support to the supply chain to assist its transition to lean, zero emission manufacturing. But there are still challenges to overcome. We will work with the sector, the supply-chain, energy network companies and financial institutions to co-design creative solutions for tackling the hurdles that remain, while also working to stimulate opportunities for immediate and strategic investment in zero or low emission buses.

Building on our successive Vessel Replacement and Deployment Plans we will produce and maintain a long-term plan and investment programme for new ferries and development at ports to improve resilience, reliability, capacity, and accessibility, increase standardisation, and reduce emissions to meet the needs of island communities and give confidence on our ongoing commitment.

We will also work collaboratively across the public sector developing tools and guidance and a practical approach to influence and empower buyer, supplier and key stakeholder communities to use public procurement to support a green recovery and our wider climate and circular economy ambitions through procurement, embedding climate considerations in organisational procurement strategies by 2021 and reporting progress in annual procurement reports. We will also expect the use of all relevant procurement activities as an opportunity to promote fair working practices for the benefit of those working on public contracts.

18,000 hectares of new forest per year by 2024

Nature based Investment

Investment in forestry infrastructure and the domestic supply chain offers a real opportunity for growth. Forestry presents an important commercial natural resource, provides spaces to improve personal health and wellbeing, and through an ambitious programme of planting can contribute towards Scotland's net zero commitments. Having created over 22,000 hectares of new woodland in the last two years, we will continue to invest in nature‑based solutions to climate change, and to increase overall forest cover in Scotland. As part of our low carbon fund investment, Scottish Forestry will receive an additional £100 million to increase new planting and Forestry and Land Scotland will receive an additional £30 million to expand Scotland's national forests and land. We will also provide £20 million to further increase tree nursery capacity, investing in new and redeveloped facilities to support higher production. This investment will enable us to increase tree planting and woodland creation from the current level of 12,000 hectares in 2020/21 up to 18,000 hectares in 2024/25.

We want to see wood and forestry based markets grow in Scotland. This includes growing the woodland carbon market by 50% over the next 5 years through the Woodland Carbon Code, and working with partners to support new approaches to financing private sector investment in nature‑based solutions. We are committed to increasing the annual volume of Scottish timber going into construction from 2.2 million cubic meters (2018) to 2.6 million cubic meters in 2021/2022. We will collaborate with the Scottish Forest and Timber Technologies Industry Leadership Group to deliver this target by supporting research into timber engineering, increasing the understanding of timber as a building material among architects and supporting efforts to increase customer demand.

Our land and natural resources already contribute to Scotland's economy, however we could do more to fully realise economic opportunities to support recovery whilst protecting biodiversity. We will commission advice from the Scottish Land Commission on how we can ensure our land is factored in to our economic thinking and to explore new policy levers that could shape land markets in a way that will help us support recovery and build resilience. This includes reviewing the housing land market, advice on legislative measures addressing concentrated land ownership, and consideration of tax and fiscal reforms to support greater diversity of land ownership, particularly among communities, and ensure that is used for the benefit of greener, thriving local areas.

Restoring our peatland

Peatland restoration has a key role in responding to the linked climate emergency and biodiversity challenge, and is a key component of a green economic recovery post‑COVID-19. Since 2012, 25,480 hectares of peatland have undergone restoration in Scotland at a cost of £31.4 million. Looking ahead we are committed to significantly increasing the rate of peatland restoration as one of the transformative changes needed to meet the our emissions targets. In the 2020‑21 budget we announced funding of £20 million as the first step of a 10 year £250 million commitment to restore 20,000 hectares of Scottish peatland annually, towards a total of 250,000 hectares by 2030. Investment of £20-£25 million per annum is estimated to build towards the creation of around 200 jobs over 3-5 years, mostly in rural and remote areas.

Investing in biodiversity and ecological health

We will continue to support biodiversity, including through the Biodiversity Challenge Fund, with £3m funding in 2021‑22 to augment a wide array of other biodiversity delivery activity as we seek to improve the state of nature in Scotland. This will also help support green skills and job opportunities. We will also publish a high‑level statement of intent on biodiversity before the end of the year. We also intend to commission pilot 'Miyawaki' mini forests to trial this innovative approach to restoring biodiversity and fighting the climate crisis. These have the potential to improve urban biodiversity and green space for local communities and to involve people as part of citizen science.

Climate change will increasingly affect the demand for water resources and the ability of our water environment to accommodate water use. We are already experiencing increased periods of water scarcity in certain parts of Scotland. Our River Basin Management Planning process will continue to make a positive contribution to protecting these valuable water resources, and, through our Water Environment Fund, easing the pressures on migratory fish such as Atlantic salmon.

The health of our uplands and the importance of effective deer management in supporting a green recovery and in contributing to addressing the challenges of climate change and biodiversity loss is well understood and recognised. We will publish our response to the Werritty report on grouse moor management this autumn to be followed later by our response to the Independent Working Group report on deer management. We will also bring into force protection for mountain hares as provided for in the Animals and Wildlife (Penalties, Protections and Powers) (Scotland) Act 2020, alongside licensing arrangements which will allow proportionate and responsible management of the species where necessary. While plans to legislate on the control of foxes had to be postponed due to COVID-19 we remain committed to taking the proposals forward in the next parliament.

Improving land management, and protecting our rural economy

Our rural economy must also be at the forefront of our economic and environmental recovery. Farming contributes around 67,000 jobs and a GVA of around £1.3 billion to our economy. It is at the heart of rural Scotland and has a potential to contribute to our national recovery from COVID-19 through both job creation and a truly green recovery. We will bring forward recommendations for new mechanisms of agricultural support that secure a productive sector better able to contribute towards delivering Scotland's climate change outcomes and promote new employment opportunities. We will co‑develop new ways of working with our farming and crofting communities through farmer‑led groups supported by scientific and economic expertise from SRUC and our main research providers. These will build upon the work of the Walker Committee for sustainable beef farming aestablish groups such as arable, dairy and hill farming. We will ensure that there is a flexible approach across regulatory regimes to maximise the benefit to the rural economy.

Across many rural areas, crofting delivers valuable local benefits, providing jobs and income for some of our most fragile communities. A successful crofting sector helps our rural communities to thrive, and it can be at the forefront of developing new and innovative practices which support our progress to net zero. We will extend the work of the Scottish Land Matching Service to encourage uptake of vacant and/or underutilised crofts by new entrants. Bringing these crofts into use will provide opportunities for jobs, housing, and economic growth in those communities.

We will better enable the sector contribute to the Scottish Government's wider climate change commitments and to contribute to a green economic recovery by continuing to develop of the Agricultural Transformation Programme utilising the Agricultural Transformation Fund to introduce a £10 million capital grant scheme that will enable farmers and crofters to purchase equipment that should assist in reducing their greenhouse gas emissions, and support practice change.

We will publish our third Land Use Strategy, setting out how we will maximise the contribution our land will make to tackling climate change. We will also work towards the establishment of a statutory national Nitrogen Balance Sheet, with a programme of stakeholder engagement expected to begin in Autumn 2020. This will enable a better understanding of the flow of nitrogen within the economy and support our national greenhouse gas emissions reduction targets.

In recent years, Scotland's food and drink industry has been one of our strongest economic performers, particularly for our rural economy, but the pandemic has hit it hard with models suggesting a 20% reduction in turnover this year. Recovery is vital and must help create resilience, create opportunities for renewal, and safeguard jobs and businesses in some of our most rural and fragile communities. We will work with the sector to launch our joint recovery plan focussed on stimulating demand for Scottish products in key markets and supporting businesses to capitalise on that demand, including a new Local Food Strategy for Scotland and work to transform Scotland's convenience store sector to maximise local promotion and purchase of fresh, healthy Scottish produce.

Scotland's natural larder sits at the heart of our food and drink success - the impact of COVID-19 on our food and drink industry also threatens our producers. As part of our joint recovery plan with the food and drink industry to build back better, we will support the creation of new agriculture producer organisations to strengthen the position of farmers, food producers and crofters in the supply chain. We will also begin developing farmer‑focused supply chains, developing new models in a range of markets, with farmers and food producers at their core, with clear contracts and terms - helping to make farming more sustainable and profitable in the longer term.

We will develop a Blue Economy Action Plan to launch a programme of collaborative projects across the public sector, Scotland's science base, marine industries and the marine environmental sector. We will set out clear actions to strengthen the resilience of our marine industries ranging from renewable energy to fisheries (and the marine science, research and innovation which underpin them) and to support coastal communities, recognising the vital importance to our marine economy of the abundant natural capital in Scotland's seas and rivers. This will include supporting the sustainable growth of aquaculture - which provides many jobs in the most remote locations and island communities - by improved regulatory processes, based on the application of available evidence and continued enhancements in the scientific base, to provide more benefit to the communities where aquaculture is based. Our Blue Economy Action Plan will harness and bolster Scotland's international profile as a successful, modern and innovative maritime nation.

Our approach will encompass work across the broad range of marine sectors, including seafood, tourism, energy, transport and science. We will work with stakeholders to strengthen the resilience of our fishing industry and local fishing communities through our Future Fisheries Management Strategy and our Inshore Modernisation Programme. This will include bringing forward firm plans to encourage greater landing of catch into Scottish ports.

Developing the circular economy

Creating a more circular economy promotes sustainable and inclusive economic growth and is fundamental to our transition to becoming a net zero society. An estimated 80% of our global climate emissions are currently linked to the production, consumption and waste of products and resources. This must involve a fundamental re‑think about how we use and reuse materials and how we handle waste. We must ensure that we do not export environmental harm to other countries in pursuit of our own recycling targets.

We know that poor quality recycling and contamination are linked to confusion about how best to recycle. We need to make it easier for people to do the right thing by ensuring clearer information and labelling; promoting more consistent collection services; and providing stronger incentives for recycling. We will therefore establish a £70 million fund to improve local authority collection infrastructure, and develop a new route map to reduce waste and meet our waste and recycling targets for 2025. We will work with the Convention of Scottish Local Authorities (COSLA) in the coming year to evaluate the Household Recycling Charter and its Code of Practice as a key step in developing a future model of recycling collections. We will continue to work with the UK Government and other devolved administrations on reforms to the packaging extended producer responsibility regime, which we expect will deliver improved funding for local authorities in the future.

£70 million to improve local recycling

Scotland's Recycling Summit in December 2019 recognised that Scotland has come a long way over the last 20 years. Recycling is now part of everyday life and our collection and treatment infrastructure can recycle nearly 60% of our waste. However, Summit participants identified a need for further interventions - if we are to accelerate progress and meet our ambitious recycling targets for 2025.

Around 14% of Scotland's waste is currently processed outside Scotland, representing a lost economic opportunity. A key priority is to stimulate the development of reprocessing infrastructure within Scotland to deal with future waste and materials, particularly plastic, as close to source as possible. Implementation of our Deposit Return Scheme (DRS) for single‑use drinks containers will provide improved quantity and quality of materials. We will work with Local Authorities and the future DRS scheme administrator(s) to explore options that will unlock reprocessing investments, including pricing and incentive schemes, to create jobs and a ready supply of recycled material for new packaging.

We intend to encourage more sustainable consumer purchasing by introducing legislation to increase the carrier bag minimum charge from 5p to 10p in this parliamentary session. We will consult on banning a number of problematic plastic items identified in the EU's Single Use Plastics Directive, and outline how we will give effect to the wider requirements of the Directive before the end of 2020. We also plan to take further steps to consult on a charge on single‑use disposable beverage cups.

The pandemic has meant we have had to rethink our legislative agenda in the final year of this Parliament, necessitating a delay in a number of areas. As part of this, we took the difficult decision to delay introduction of our Circular Economy Bill. However, we remain committed to achieving circular economy outcomes and will continue to work with stakeholders to pursue these.

We will continue to take the necessary actions to manage the risks to our environment from the UK's exit from the EU. Guided by our Environment Strategy's vision and outcomes, we will make all necessary adjustments to our laws and policies to maintain or improve environmental standards in Scotland. We will implement measures in the Continuity Bill, so that our environmental policies continue to keep pace with EU environmental principles and to ensure we have proportionate, effective environmental governance for Scotland. This will include our new environmental governance body, Environmental Standards Scotland.

Taking national and local action on climate change

As part of our plans, government must lead by example and we must also ask the same of other public bodies. We will further strengthen our legislative framework by shortly bringing forward regulations requiring public bodies to set a date for when they will become net zero emitters and introduce science based targets for their emissions.

To support the plan we will undertake a significant programme of stakeholder engagement, ensuring we use the talents available in Scotland to inform our approach and promote public understanding of the role they can play. Subject to COVID-19 restrictions we will hold the first meeting of an independent, representative citizens' assembly on climate change in late autumn. We will also continue to work with the UK Government, Glasgow City Council, Police Scotland and other partners to deliver a safe, inclusive and successful COP26 that supports a global transition to net zero in a way that is fair and just. To ensure national‑level expertise, we are committed to seeking the establishment of an office of the UK Committee on Climate Change in Scotland, to ensure Scotland has access to the best possible independent expert advice.

While much of our action must be national, ensuring our actions are at the scale required, we have seen across Scotland the power of communities to harness local action for national results. We will introduce a network of regional hubs across Scotland that will empower communities to develop local solutions to making the transition to net zero and climate resilient living. We will also develop a network of Climate Action Towns targeted at small towns with little historical involvement in climate action. This will support them to reduce what they use, recycle more, and cut their emissions and become carbon neutral, as part of our aim to ensure that Scotland's response to the global climate emergency is a truly national endeavour.

Climate justice recognises that the poor and vulnerable at home and overseas are the first to be affected by climate change, and will suffer the worst, yet have done little or nothing to cause the problem. Our world first Climate Justice Fund will continue to support communities in our partner countries of Malawi, Zambia, and Rwanda become more resilient to climate change. The powerful work done to date will help inform how we best support climate justice initiatives beyond 2021.

Whilst reaching net zero emissions is at the heart of Scotland's approach to tackling climate change, we must also prepare for the impacts of global change which are already locked in. We are already seeing warming in Scotland, with more extreme weather events and rising sea levels. The consequences of these changes can be tragic and as a nation we must adapt to these changes. In support of enhanced adaptation and climate resilience as part of a green recovery, we will invest an extra £150 million in flood risk management, over a five‑year period from 2021/22. This substantial investment complements the £42 million provided annually to local authorities to support investment in vital flood protection schemes throughout the country. To help us adapt to the threat of sea level rise and protect our natural coastal defences from erosion we will invest £12 million in coastal change adaptation.

Strengthening links with the global economy

Attracting inward investment

Our internationalisation agenda continues to focus on strengthening links with the global economy to maximise opportunities for trade, attract investment, share skills and expertise, and collaborate to support innovation and job creation through sustainable inclusive economic growth.

Create 100,000 jobs through inward investment over the next ten years

Before the end of 2020, we will publish our vision for trade, that sets out the principles and values that will shape the trading relationships we want Scotland to have in the future. This vision will underpin how we take forward implementation of our three cornerstone international economy plans and crucially will be used to influence the approach the UK Government takes in developing trade agreements with other countries and blocs. It will reflect the Scottish Government's aims of fair work, inclusive growth, supporting the wellbeing of people and communities and of course, making the transition to net zero, as well as including a set of indicators which future trade‑related decisions - both import and export related - can be tested against.

Inward investors represent just 3% of businesses in Scotland but contribute disproportionately to our economy - providing 34% of employment, 50% of turnover, and 77% of exports. They also support Scottish businesses to innovate, grow and develop through competition, by building and sharing knowledge through local supply chains, and by bringing fresh talent and capital investment.

We have already published A Trading Nation, our export growth plan, which we will refresh in 2021 to take account of Scotland being outside the EU. This year we will also publish Shaping Scotland's Economy, our inward investment plan that will take a targeted approach to driving the creation of highly skilled jobs in key sectors for Scotland's future economy. The collective measures to be outlined in the plan, including increasing our annual spend on Inward Investment support to £20 million a year, could deliver 100,000 high value jobs in Scotland over the next decade, with the potential to deliver an increase in government revenue of £680 million by 2040 and grow GDP by £4.2 billion. This creates a strong proposition for Scotland, working in partnership with our enterprise and skills agencies, in particular Scottish Development International, to market its future‑facing skills internationally, as well as helping to retrain and re‑employ people at risk of redundancy in other sectors.

By the end of 2021 we will publish our Capital Investment Plan, our third inter‑linked plan, setting out how we will attract more private sector investment to Scotland and deliver more effective leverage of private investment into projects that provide public good, grow our economy and create jobs.

Attracting Talent to Scotland

Scotland, along with most Western countries has clear demographic challenges: an ageing population; declining birth rate; and rural depopulation. The impacts of Brexit and the end of freedom of movement of people could have a devastating impact on our population and demography, with localised challenges felt most strongly in rural and remote communities. Attracting the necessary level and skills of migrants to Scotland is crucial to our economic prospects and demographic sustainability. Inward migration benefits our nation through the skills and expertise of people who choose to come and live in Scotland, boosting our ability to attract global companies looking to invest.

Through the Population Programme and Ministerial Population Taskforce, we will work closely with partners to develop and publish a Population Strategy in early 2021. This will set out Scotland's demographic challenge and the actions we will take to address it, identifying which actions will fall to local partners and which to the Scottish Government. The Strategy will bring together the different strands of activity across Scottish Government and make the case for further powers to develop a tailored approach to migration.

The end of freedom of movement presents a distinct risk for employers and communities across Scotland. We will however, ensure Scotland remains a welcoming, open, and competitive nation. As we come to the end of the transition period and the deadline for applying to the EU Settlement Scheme nears, we will support people who have chosen to make Scotland their home. We will maintain the Stay in Scotland campaign to provide information, advice and support to those navigating the Scheme. We will launch a Welcome to Scotland resource before the end of 2020, providing practical, accessible information for people who have either recently moved or are considering moving to Scotland.

The ending of freedom of movement is also a particular concern to many rural areas and rural economies where reduced rates of inward migration can have huge impacts. Many employers in these areas cannot afford to offer the high salary rates required to meet the UK Government's threshold to qualify for a visa, or to pay the immigration costs and fees set by the UK Government. We will therefore develop and publish proposals for a rural migration pilot in Scotland, working with our partners, local government and the Expert Advisory Group for Migration and Population. We will publish advice from the Expert Advisory Group on a rural migration pilot by the end of 2020 and develop a delivery model and proposal to present to the UK Government in early 2021. A key element of attracting people to live in rural Scotland is the availability of housing, and this will require a flexible approach to the planning system.

The UK Government's proposals for a future immigration system do nothing to address the needs of Scotland's communities or businesses, or those who want to call Scotland home. We will continue to fund TalentScotland, providing information, guidance and support to Scottish‑based companies seeking to employ or retain international staff, and to inward investors considering Scotland as a location for their business. We will continue to argue for a migration system tailored to Scotland's needs, including a Scottish Visa, and work with partners and employers to develop proposals that suit their requirements. We will also support the roll out of an overseas skills recognition framework, to help employers recruit qualified migrant workers into jobs, including those in priority sectors such as health and social care.

Scotland as a global leader

Scotland is committed to participating as a proactive international partner, including our future approach to European engagement following the UK's withdrawal from the EU. We are ready to engage and support others as we continue the global effort against COVID-19. We are also committed to working with others to tackle the global climate emergency. In the course of the next year, we will update Scotland's International Framework and Policy Statement in light of the COVID-19 crisis to ensure it clearly articulates our international position and priorities.

Through the global crisis, we have collaborated with international partners, using our networks to secure insights into best practice in reducing transmission and the other harms caused by the virus. Our teams around the world have worked hard to secure vital supplies of PPE and other equipment. We will build on this internationally networked approach to COVID-19 to tackle other global challenges. The impacts of the pandemic increase the need for ambitious and cooperative action in areas such as climate change. But it also brings challenges to areas already expected to be impacted by the UK's damaging withdrawal from the EU. We will work collectively across all areas of government and particularly in our strengthened overseas network to ensure recovery reinforces Scotland's diplomatic reputation and keeps Scotland open, connected and able to make a positive contribution internationally.

Scotland's commitment to being a good global citizen is part of its attraction as a destination for inward migration. Delivering on Sustainable Development Goals (SDGs), not just as a nation but as a partner for developing countries, is important as we move into the recovery phase. Our work on Policy Coherence - considering not just our needs but the needs of others overseas - is vital as we strive to build a green economy and "leave no one behind" in line with the ethos of the UN SDGs.

That approach, of working with others collaboratively, has been a key feature and strength of our international development work to date. We have worked closely with our partners to deliver projects in areas such as health, education, justice and renewable energy, despite the recent and ongoing challenges of COVID-19. Our peer‑to‑peer projects (involving NHS Scotland, Police Scotland and Scottish Water) support the development of our partner countries. We have continued to commit to Scotland being an outward‑looking, good global citizen, making distinctive contributions towards addressing global challenges and injustices, by sharing our knowledge, skills and technical expertise in our partner countries, and learning from them.

It is clear COVID-19 will remain a threat for some time to come. We will therefore also begin to review and open a discussion on our approach to international development, ensuring that we are focusing our contribution on areas where we can make the biggest difference against the backdrop of the new reality of COVID-19, and ensuring that as much of our funding as possible reaches our partner countries which need it most. We will ring‑fence £2 million of the International Development Fund in this year to contribute to COVID-19 efforts in our partner countries.

Our international connections are important to us. They bring us fresh perspectives and provide the opportunity for us to share our knowledge and expertise. We established the Wellbeing Economy Governments group because we know we can gain a lot from working with like‑minded countries to promote sustainable and inclusive growth to raise living standards for all. Scotland House Brussels was established over 20 years ago, and continues to provide a strong platform for engagement with EU institutions and other stakeholders, promoting Scotland and the exchange of expertise and ideas. Scotland has broadened its reach globally by significantly enhancing our international network which now includes offices in London, Dublin, Berlin, Paris, Ottawa, Washington DC, and Beijing.

Building strength in our local Economies

Community Wealth Building

COVID-19 has had a profound impact on the way that we work and has changed our perceptions of the communities around us. It has forced us to look local. That theme runs throughout our Programme for Government with new commitments around local supply chain development and 20 minute neighbourhoods. This is also the time to build on the progress we have been making on Community Wealth Building (CWB). This is a way of working that looks to reorganise our local economies to maximise local opportunities and resilience - ensuring that local people and businesses have a genuine stake in producing, owning and enjoying the wealth they create.

Our approach considers how the financial, land and property assets of our major employers, so-called 'anchor institutions', in communities, whether they are public, private or third sector, can be used to support local economic opportunity. There are different ways to do this. The procurement aspect looks at how sustainable procurement techniques can lock value into the communities that public money is there to serve, encouraging and supporting more local businesses to secure contracts; protecting and creating local jobs; and working with our contractors to adopt Fair Work practices.

Communities can be anchors too. Community Trusts play key roles in the resilience and wellbeing within communities; and their impact in helping communities weather the COVID-19 emergency has been documented by Community Land Scotland. We only need to look at the current crisis to understand the critical value community power and local economic energy can have on a place and the people who live there. We want to harness the energy of communities to ensure they are a core part of how we do economic development in Scotland.

Building on work already underway in places like Ayrshire, which has secured £3 million for Community Wealth Building through their regional growth deal, we will now work with 5 additional areas - Clackmannanshire, South of Scotland, Glasgow City Region, Western Isles and Tay Cities to produce bespoke community wealth building action plans for each area. We will deliver the first three action plans within the coming 3 months with the final two following early next year. There will be no one model that fits every part of Scotland and it is vital that communities, public services and businesses are involved in designing and building their local economic and community wealth building solutions.

We have given an unwavering commitment, as part of our community empowerment and land reform work, to support groups across Scotland to tap into the potential resources around them, through land and asset purchases, helping tackle the inequalities of land ownership and the 'democratic decision deficit' that afflicts so many of our communities who are often excluded from participation in local decision making about their places. We will ensure funding for a new Scottish Land Fund - currently in its final year - providing £10 million per year to help communities purchase assets. We will also ask the Scottish Land Commission to advise on options for communities to complement funding from the Land Fund with other funding approaches in order to ensure land and asset ownership is a normal option for communities.

To further promote localism and community wealth building, we will build on the momentum of the current successful Scotland Loves Local campaign by providing an additional £1 million funding. This will be available to a range of locally based community and third sector groups similar to the Towns and Business Resilience and Recovery Fund to develop local marketing and infrastructure projects in their communities.

We are confident that this work can deliver tangible local benefits quickly, and early work with partners will focus on specific interventions required to circulate more public sector spend locally, supporting SMEs to create additional, secure, well‑paying jobs. We will also deliver stronger and more co‑ordinated business support for new and existing local businesses that sets out the benefits and operating requirements of different business models (such as employee owned enterprises, cooperatives and community ownership), maximises shared workspace access and clearly signposts to available finance.

Supporting The Third Sector and Social Enterprise

Within our communities, the third sector and social enterprises play a crucial role - supporting community development, inclusive growth, and providing lifeline services, facilities, and employment. A thriving third sector and growing volunteering is vital to Scotland. Its economic and social contribution is vast and as such it is an essential partner to Government. The Scottish Government invests around £500 million annually in the third sector, leveraging a turnover estimated at £6 billion in normal times. However, these are not normal times and the trading environment for social enterprise in particular has been severely constrained during the crisis.

Beyond the immediate need our role must be to create the best conditions for the third sector and volunteering to thrive and contribute to a recovering economy and society. As we move from the immediate response to recovery we will now refocus part of the Communities Fund into a £25 million Community and Third Sector Recovery Programme. This will include business support and investment to help organisations adapt their operations and income generation to increase sustainability. This funding will support our third sector to continue to support people and communities in responding to the ongoing impact of the pandemic.

We will begin work to explore other strands of social investment including capital loans to support the sector to work together and co‑locate as the demand for office space declines, whilst leaving organisations with an asset in future years to enhance sustainability, and ensuring that this benefits all areas, particularly those hardest hit by the crisis.

We will also build upon our existing and extensive work to support social enterprises and Credit Unions which provide vital financial services for some of our most deprived communities. We will launch the next Social Enterprise Action Plan, by the autumn, and the Credit Union Strategy by the end of the parliamentary term - both of these are essential to a wellbeing economy.

The legal environment within which Scotland's 29,000 charities operate is critical to all of our ambitions for the third sector. Delayed by the crisis, we will now re‑start our process of co‑production with the sector to review Charity Law and publish our proposals by the end of this parliament.

Transforming places

Communities across Scotland- particularly those in remote and rural areas as well as in urban regions - have benefitted significantly from European Structural Funds, with the current 2014-2020 programme worth over £780 million. The UK's exit from the EU means that we will lose access to this vital funding, hindering the progress that has been made in supporting the economic and social wellbeing of these communities. The UK Government has committed to replacing this support with the UK Shared Prosperity Fund, but as of now, we have not been given any clear detail on how this will operate in practice. We will therefore continue to move forward on the assumption that an appropriate allocation of the Shared Prosperity Fund will be devolved to the Scottish Government to disburse in line with our own policies and targets. We will work quickly to establish a Scottish Programme that will be focussed on promoting place‑based economic development and cohesion, helping communities across Scotland to improve key economic, social and wellbeing performance indicators.

To support economic recovery and boost long term inclusive and sustainable growth, we will continue to deliver the city region and regional growth deals. The Scottish Government has committed over £1.9 billion to this key programme to boost regional economic development through investing in strategic projects developed and delivered by local authorities and their partners in the public and private sectors. This includes recently announced £50 million investments for both the future Falkirk and Islands Deals.

Our rural and island communities have faced a particular challenge, especially as a result of lockdown and the disruption to tourism. But even before now, we know there were issues of poverty of opportunity, and a need to ensure high quality jobs to allow young people to remain in their communities. We will establish a £2 million Green Recovery Programme for our islands, opening in October 2020, to help deliver on low‑carbon related commitments in the National Islands Plan. This will complement existing funding for the previously announced PfG commitment to support repopulation of our rural and island communities. This will include specific ring‑fenced funding for capital projects on islands relating to net‑zero and green recovery objectives, creating high‑quality, skilled, green jobs in some of our most remote and vulnerable communities. Building on our response to the Advisory Group on Economic Recovery, we will also take forward our commitment to work with our partners to capitalise on existing investment in the rural leadership programme, supporting micro and SME businesspeople to develop new skills and grow their businesses through a programme of professional and self‑development.

Many of our communities - particularly those in the highlands and islands - are dependent on tourism and culture, sectors which have been particularly hard hit by the crisis. While accommodation providers have been able to reopen since 15 July, initial reports indicate significantly lower occupancy rates, average daily rates paid for rooms sold and revenue per available rooms compared to the same week in 2019. For associated sectors - including hospitality and recreation providers - there will be ongoing concerns which may affect reopening, including adapting to social distancing. A safe and strong recovery for tourism will be vital to economic recovery, inclusive growth and wellbeing.

Our new tourism strategy, Scotland Outlook 2030, will form the framework for our recovery. We will work with VisitScotland to develop an appropriate recovery marketing strategy, to identify short, medium and longer term market opportunities to support tourism and increase visitors. Understanding the severe impact on our rural communities, we will build on the work of the Rural Tourism Infrastructure Fund, and the £9 million we have already committed, by exploring how we can provide continued support for our most vulnerable locations.

Having a skilled workforce is important for our recovery and we will work with Skills Development Scotland, through the Tourism Recovery Taskforce, to ensure that the sector has the right skills in the right places to support our recovery. Part of that will be consideration of support for the most skilled within the sector who are at risk of redundancy or reduced working hours and helping those who have lost their jobs to find new roles.

As recommended by the Advisory Group on Economic Recovery, we will also create a 'Culture Collective'' to harness and maximise the contribution of Scotland's creative workforce to the building of a wellbeing economy. In alignment with the Culture Strategy for Scotland - informed by the National Partnership for Culture and other national stakeholders - we will take an inclusive, partnership approach to supporting the communities, individuals and organisations hardest hit by the pandemic to fully participate in Scotland's social, economic and cultural life.

We will work with the creative industries to help ensure we have the skills to build a strong, resilient future. Building on work already done by the sector, we will work with the creative industries to ensure that the right skills to support creativity and to enable a more business‑focussed and entrepreneurial approach.

The UK's withdrawal from the EU means that Scotland can no longer contribute to Creative Europe. It is vital that we continue to have access to European creative networks and that Scotland's contribution can continue. We will partner with the UK Government to develop a successor to Creative Europe, ensuring that Scotland continues to benefit from a productive reciprocal relationship with Europe.

Scotland's events sector continues to be particularly hard hit by the impact of the pandemic restrictions. Working with input from the Events Industry Advisory Group established at the outset of the pandemic, our immediate focus is to support the recovery of the sector. £10 million of funding has been made available specifically to help event organisers, festivals and supply chain businesses through this difficult period.

We also want to support and encourage innovative approaches to event delivery in light of COVID-19 and will help pilot events that might not otherwise be viable. We will also support a strong marketing and communications programme to regain public confidence when the time is right, in attending events, big and small.

We will also take a medium term focus which aligns with our stated intention to review the national events strategy. This piece of work was scheduled to complete during 2020 but commencement has been delayed due to the pandemic. This is, however, an opportunity to rethink how we support events in Scotland, how we build upon our established international reputation as an innovative host and how events can support our wider government priorities around economic and environmental sustainability. Our success in securing the 2023 Cycling World Championships will be used as a driver to deliver positive policy outcomes across several portfolios.

The response from Gaelic bodies to the COVID-19 crisis was excellent and support was provided in education, in broadcasting and in the arts. The Scottish Government will continue to invest in Gaelic initiatives and projects with the aim of increasing the numbers of people speaking, using and learning the Gaelic language. The focus of support will continue to be the Gaelic bodies such as Bòrd na Gàidhlig, MG ALBA, Storlann and Sabhal Mòr Ostaig but also with the recognition in our Faster Rate of Progress initiative that a number of public authorities can also contribute to Gaelic development. The priorities will continue to be Gaelic in education, broadcasting, publishing, adult leaning and the arts with an emphasis on language use and economic benefits in areas of low population.



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