Seòmar agus comataidhean

I am not entirely sure. We could revert to you on that. There might be procurement or state aid issues—

I will bring in Philip Raines to answer that.

Again, it is horses for courses, and what might be a very good solution for one area might not be for others, depending on location. However, as a principle, that can work effectively. It comes down to regional partnerships and regional planning, because aligning all the things that need to be aligned will span more than one local authority. I would have expected ideas like that to be part of discussions among the regional transport partnerships on how they come together to look at modal shift and set clear priorities for the available funding.

Thank you, convener. I take the opportunity to thank the committee for the invitation to give evidence and, additionally, to acknowledge the work of the committee over recent weeks in gathering evidence and scrutinising the draft climate change plan.

I am aware that the Cabinet Secretary for Housing attended the committee last week, as the lead minister for decarbonisation of heating in homes. As you are aware, the Cabinet Secretary for Climate Action and Energy has the overall lead on the climate change plan and will be attending the Net Zero, Energy and Transport Committee on 10 February.

We meet in a crucial period for climate action in Scotland, when the impacts of climate change and the need to confront the challenges through reducing emissions and building resilience are overwhelmingly self-evident. In February last year, the First Minister called on all parts of Scottish society to play their part in responding to the climate emergency, which, he acknowledged, requires the continued leadership of the Scottish Government. The draft climate change plan published on 7 November last year demonstrates that leadership and contains the actions that we must all take—Government, the rest of the public sector, industry, other organisations and individuals—to reduce our emissions and realise the economic and social benefits available from doing so. Scottish local authorities are crucial partners in that effort. For that reason, the draft budget that I delivered to the Scottish Parliament on 13 January included an additional £20 million in capital funding for local authorities to respond to the climate emergency.

My draft budget demonstrates that this Government remains committed to playing our part in global efforts to tackle the growing climate emergency. Despite the current difficult financial circumstances, we will invest at least £5 billion to support our efforts to deliver a just transition to net zero and climate resilience. That includes money for renewable energy development, carbon-free transport, more carbon-free heating for businesses and homes, and funding to restore Scotland’s natural environment.

Delivering climate and nature action at the scale that is needed will incur significant costs, but, as Professor Graeme Roy, chair of the Scottish Fiscal Commission, has said,

“Doing nothing, not responding to the challenge of climate change, will be far more expensive and damaging to the public finances than investing in net zero … it is simply not an option.”

The draft climate change plan will deliver on our first three carbon budgets from 2026 to 2040. The carbon budget levels are in line with advice provided by the Climate Change Committee and demonstrate that the Scottish Government’s ambition and commitment to delivering net zero carbon emissions by 2045 at the latest is unchanged. That is complemented by the Scottish national adaptation plan, which focuses on building resilience to the effects of climate change that are already with us and can no longer be avoided.

This draft climate change plan is the first in the United Kingdom to include the costs and benefits of the policies within it. Those policies can deliver significant advantages for all of Scotland, both in terms of direct financial benefits and wider co-benefits across society—such as cleaner air and reduced road congestion—as more of us switch to using public transport where possible.

The draft plan includes action to boost investment, create green jobs and capture the economic benefits that the green industries of the future offer. Scottish businesses are already realising those opportunities in growing global green markets from our world-leading offshore energy services to new and emerging opportunities in hydrogen, carbon capture and storage, and green finance.

A key focus of the committee has been the buildings chapter of the draft plan. We know that our building practices and heat in buildings policies are essential to the level of emissions that the sector is currently responsible for, but also because that is critically important for the just transition in Scotland.

Public consent for climate action is also crucial for the effective delivery of Scottish Government climate mitigation policy. We know that we risk that consent if we cannot deliver warmer homes and more affordable energy bills, or we risk exacerbating fuel poverty. That is one important reason why the policies in the draft plan have been assessed against the just transition principles. This assessment also contributes to ensuring the deliverability of the policies, and we are looking forward to strengthening that further through discussions with stakeholders and key delivery partners, including local authorities.

Finally, I have to say plainly that the success of the draft plan also depends on action from the UK Government. Most significantly, as the committee has heard previously, steps must be taken to reduce the price of electricity. The Scottish Government has been pressing the need for that, and the Climate Change Committee has also called for it.

The Scottish Government will continue to engage widely throughout the consultation period of the draft plan, and I hope that all interested parties will have a chance to share their views on the plan and the action that it includes.

I am grateful for the opportunity to make this statement to the committee, and I would be happy to take questions from you.

That is a fair comment about the bus network in rural areas—lack of availability can be a challenge. That issue has been raised with me, and the Cabinet Secretary for Transport is very aware of it.

Interestingly, we have been working very closely with Shetland, Orkney and the Western Isles on a new accelerator model for the islands. The accelerator model, which is a way of generating funding for infrastructure investment, has been used successfully in many parts of Scotland. For example, the model has been used in Granton, in Edinburgh, in relation to housing, with the Scottish Government contributing to the revenue costs of borrowing.

We have not yet used the model in an island context, but it is really important that we do so, because our island communities, particularly those in Shetland, host a lot of renewables infrastructure and there is the sense that communities need to get something back for hosting it. The accelerator model that we are exploring is a good way of providing for that, because the priorities will be determined by those on the islands—we expect the local authority to discuss the priorities with the local population. “Payback” is probably not the right term, but that model acknowledges the pressure on infrastructure from hosting major offshore wind farms, for example, and we are being up front about the need for investment in infrastructure, housing, roads and so on. Some of that work will relate to decarbonisation and reducing bills.

I am quite excited about applying the accelerator model, and the three island authorities have been keen to work with us in developing it.

We give support to local authorities through the local government settlement, which underpins local government finance. In my opening statement, I mentioned the £20 million of additional capital that we are providing in the budget, which builds on the funding that local government got last year.

We also support local government to develop its plans. I mentioned some of the supports that we provide, which include the climate delivery framework and the Scottish Climate Intelligence Service. There is also the public sector heat decarbonisation fund, the heat network support unit and the Sustainable Scotland Network.

In addition to the settlement, we provide various funds to support local authorities to get on with their work in this area. I do not know whether any of my officials has anything to add.

That is a challenge across the whole of the public sector, given the varying, competing demands upon it, of which tackling the climate emergency is one, and social care, which you mentioned, is another. In the 2026-27 budget, we will provide local government with a real-terms increase in the settlement, bringing it to almost £15.7 billion. As I said earlier, the budget will also allocate time-limited capital funding of £20 million to support councils in responding to the climate emergency. How that funding is allocated is a matter for councils. We have also given councils a lot more discretion, baselining of funding and reductions in ring-fenced funds, which can help local authorities to meet the demands that they face. No one is saying that it is easy. However, like the rest of the public sector, councils will have to ensure that they can manage, using the levers that they have—which include full discretion over council tax—to set their budgets and meet the priorities of local people.

Yes, definitely. I would agree with that.

That model could work. I go back to my earlier point, which is that some local authorities will have more capacity than others. Glasgow and the surrounding conurbation would potentially have more capacity and more ability to enter into potential contracts to deliver on big ambitions, if we think about tenement properties as an example. Other local authorities that are much smaller and may have very different housing stock will be in a different position.

One of the reasons that Glasgow is so far ahead with its district heating plans is because it has a view on how it can move forward in a way that suits multi-tenure properties and different business requirements. Potentially, district heating could be a good, affordable solution. Through public-private collaboration, you could have ready customers through a hub that is run by the public sector, which could help to move things forward. It could also provide an option for businesses to come on board. Glasgow is looking at a hub-and-spoke model.

Gareth Fenney may want to say something about retrofitting. I expect that Màiri McAllan touched on that last week.

I am happy to write to the committee with more detail about the role of the planning hub, but my understanding is that it will support local authorities. I am not talking about support with the small developments that are local planning departments’ day-to-day meat and drink; I am talking about support with some of the complex, large-scale applications that some local authorities will deal with more than others, depending on their location—there are obvious reasons for where some of those developments are happening, and the planning hub should be in a position to give that additional support.

Ivan McKee is overseeing the hub, which was set up with that approach very much in mind. I am, however, happy to furnish the committee with a bit more up-to-date information about what is happening and what practical support the hub might lend to local authorities that are trying to deal with things that could consume all their time because of the complexity. We will set that out in writing.