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The reduction in the marine directorate’s budget is, in part, due to the fact that we are not proceeding with the proposal for HPMAs. We have best utilised that funding in taking forward our priorities for marine protection as a whole. My colleague Màiri McAllan led on the HPMA policy and leads on the marine environment.

Our priority remains to deliver the fisheries management measures for the marine protected area network and the priority marine features. That, in and of itself, is no small exercise. We are looking to implement measures at about 160 different sites, so there will need to be extensive stakeholder consultation as part of that process. Our funding for the marine environment is now being prioritised on ensuring that we deliver on those measures and the previous commitments that we have made.

I do not know whether David Signorini wants to add to that.

Thanks very much, convener and committee members, for inviting me to address the committee today.

When I attended the pre-budget session in September, I set out the priorities of my portfolio. I am pleased to come back to outline how the 2024-25 Scottish budget, which the Deputy First Minister presented to Parliament in December, will help to deliver on those priorities within the wider context of the Government’s priorities.

The budget has been set in turbulent circumstances. At the global level, the impacts of inflation, the war in Ukraine and the after-effects of the Covid pandemic continue to create instability. In the United Kingdom, the combined effects of Brexit and disastrous Westminster policies mean that we are uniquely vulnerable to those international shocks. Those Brexit impacts continue to harm Scotland’s rural and island businesses and communities and create new challenges every year for the rural affairs, land reform and islands portfolio to respond to.

Against that background, the decisions that we have taken in this budget are driven by our values and prioritise our three missions. We have chosen a progressive path: to invest in our people, our economy and our public services. Where we can, we have taken action to prioritise support to the most vulnerable in our communities, to attract investment and support a growing, sustainable economy, and to address the nature and climate emergencies.

My priorities are clear. The budgets allocated to my portfolio will continue to make a vital difference to our rural, coastal and islands economy. As I did in the previous financial year, I will prioritise my portfolio’s direct cash injection of over £600 million into the economy for rural, agriculture, marine and island communities.

The Scottish Government is now providing the most generous package of direct support for farmers and crofters anywhere in the United Kingdom. We are also committed to getting money to people and businesses as early as we can every year, to help them to meet on-going inflationary and cost of living pressures. In 2023, the first tranche of direct payments was made in September—earlier than in the previous year—and exceeded forecasts by paying nearly £300 million in basic payments in the first three weeks. We will continue our critical work with the agricultural sector to co-develop and deliver on the agricultural vision, investing to help Scotland to become that global leader in sustainable and regenerative agriculture. We have also committed to deliver agri-environment investment as part of an overall budget of £30 million to support biodiversity.

My portfolio has expanded to include responsibility for peatland and forestry, and we are maintaining our record world-leading investment in peatland. Investment in new woodland creation planting will continue to contribute to our climate change targets and net zero ambitions.

By maintaining the £14 million for the marine fund Scotland, we acknowledge the vital role that our seas play in supporting the economy in coastal communities through fishing and aquaculture, as well as supporting activity to improve and restore the marine environment.

Our commitment to supporting the ambitions for our islands remains strong, with an investment of £6.7 million, which is an increase on the amount in the resource and capital spending review that was published in May 2022, with £4.3 million now allocated in capital.

Members of the committee have rightly taken a keen interest in the ring-fenced money due to return to the portfolio. I welcome the return of the first tranche of £15 million of that funding in the 2024-25 budget. In the draft budget, that funding is allocated as resource funding, but, across the portfolio, the greatest need is capital priorities. I am glad to have received the Deputy First Minister’s agreement in recent days that the portfolio will instead receive that £15 million as capital funding. It will fund vital unfunded capital priorities within the portfolio, which will provide important support to our rural communities, including the agri-environment climate scheme, the agricultural transformation fund, and crofting grants.

The Government will do what we can with all that we have to support our priorities in rural industries and sectors, through this and other portfolios. The biggest challenge that we face is the on-going failure of the UK Government to at least match fund pre-Brexit levels of funding from the European Union, or to provide a multi-annual funding framework that would allow us to take a longer-term view to some investments. Of course, we have no sense of what the funding future holds from the current—or any future—Westminster Government.

I know that you will want to scrutinise carefully our budget plans, but I would ask again that the committee might resolve to work with Government to support our efforts to secure the future rural funding certainty that Scotland needs and very much deserves. Thank you.

If AECS was not there, a lot of the activities that we would like to see would not take place. Farmers and crofters might not be able to undertake certain activities if the funding did not exist for that to happen, which is why it is such an important fund.

AECS will continue until such point as we have the future tiers of the framework in place.

As I have just outlined in my response to Kate Forbes, there will be changes to the budget lines that have been set out to show the overall switch, but this does not change the envelope. We had had the £15 million confirmed at the time the budget was published, but it was included as resource funding rather than capital. That is what I outlined to Kate Forbes. I can outline exactly in which budget lines you would expect to see changes.

Sorry, I—[Interruption.]

To clarify the point about the £61 million, the deferred funding is not a saving from 2024-25. That was from 2022-23 and 2023-24. If you remember back to when John Swinney was the finance secretary and he made the emergency budget review, that was when £33 million was announced, which was savings that had been taken. In her announcement in November, I think, the Deputy First Minister talked about the savings and the path to balance that we had to reach this year. We are waiting for that £61 million in savings to be returned to the portfolio; £15 million of it has been returned this year, but that leaves £46 million. As I said in my response to Kate Forbes, it has been confirmed that that is coming back to the portfolio, but the sequencing of that and when it happens is still to be discussed with the Deputy First Minister.

The fine that was paid initially came from our budget, as far as I am aware. I do not know whether George Burgess or Karen Morley would have the information as to specifically where it came from.

Yes, I would be happy to. As I touched on in my response to Jim Fairlie’s question about business development support, the remainder of that budget is for the crofting agricultural grant scheme. We are also continuing with the croft house grants, which I believe fall under the crofting assistance budget line. I know how important those budgets are for some of the most rural parts of Scotland, particularly our island communities, and that is why we have made it a priority within the budget to maintain that support.

The crofting agricultural grant scheme is a demand-led project. We have about 900 applications to that every year, so, of course, ensuring that we are continuing that support going forward was critical. Alongside that, we have the funding for the Crofting Commission, which we have been able to maintain to a similar level as in the previous financial year. Again, maintaining that funding has been critical so that we see continued improvement. When it comes to the Crofting Commission and the work that it is enabling here and taking forward, that support in its entirety is vital for our island communities.

First, I completely understand your point about the importance of the rural land-use partnerships. You will be aware that we have a number already established across Scotland and have been looking at how the development of them has been going. That falls under a different line in the budget as it is presented and it falls under the land reform element of that as well. We provided funding of up to around £400,000 a year for the RLUPs themselves, so they are continuing on at the moment, but we, of course, want to carefully evaluate how they have been performing so far to determine how we take that work forward.

You have mentioned community-led local development and the funding that we have available for that. Again, I will provide the committee with the breakdown of the £15 million and where that has been allocated. Some of it has been allocated to community-led local development to ensure that we have a capital element of funding in there. That has funded vital work across the country and, of course, is the legacy to the LEADER scheme that we had previously. It is about development in our rural and island areas. The local action groups across Scotland are the delivery bodies for that.

In my constituency, we have the Angus Rural Partnership. It has become a charity to enable it to drive forward work with the funding that it receives. I know how critical that is for our local areas and rural communities in particular, which again is why we have prioritised that in the budget and have ensured that there is funding there going forward.