Seòmar agus comataidhean

If we look at agriculture as an example of this—indeed, the term “agflation” has been used—we will see a tremendous increase in input costs across the bit, whether for feed, fuel or fertiliser. For some of those areas, it is not possible for us to make meaningful interventions, because the main levers rest with the UK Government. We have tried to do what we can, both within the portfolio and across the Scottish Government, to mitigate those pressures, but, without those full powers, I am unable to do everything. It is just not possible to take the meaningful action that we know is needed. Obviously, we welcome the package that the UK Government has introduced—that is, the package of energy reliefs—but, unfortunately, it is for only six months. We do not know what is going to happen after that, which will be of little comfort to those who are really struggling at the moment.

Yes, that is why it is not possible for us to do that. We get indicative allocations.

I should make it clear that what we see through the capital and resource spending reviews are not budgets; those figures are based on a number of assumptions, and we still have to go through the normal annual budget cycles. I should also emphasise that we do not have any clarity on funding beyond 2025; it is therefore not possible for us to plan in detail beyond that point, because we do not know what our allocations will be. What we have set out in the capital and resource spending reviews are the overall funding envelopes, but we will still have to work through the detail when we know what the actual allocations will be.

It was interesting to go through the evidence that the committee heard last week. We ran the competitive model for funding this year and the direct allocation process the year before. It is important for us to hear feedback and find out how local authorities are finding the process.

As with anything, there are pros and cons to both approaches, but it is all learning that we can take forward as we look to develop the islands programme in future years. I know that some local authorities will probably have received less through the competitive process than they would have received through the direct allocation process, whereas other local authorities will have received more. In some instances, it was quite a significant chunk of funding. Orkney Islands Council, for example, was allocated £1.5 million, which was over and above what it would have received through a direct allocation model. It is important for us to listen to the feedback to determine how we take the programme forward.

We decided to go with the competitive funding model this year to ensure that we delivered the funding as effectively and efficiently as we could within the available timescale. I know from evidence that the committee has heard that there were concerns about the local government elections, but we want to ensure that there is enough time to develop bids and that those bids are going to be successful and deliverable in the timescale to which we are working.

The model that we are using was built on the model for the regeneration capital grant fund, with which local authorities are familiar. That is why we adopted it. However, it is important that we take this learning into future years.

I would not want anyone to think that the work that has been undertaken in relation to those projects has been wasted. I do not underestimate for a moment how much work goes into preparing and submitting such bids. There were various issues around that, which the committee heard about last week.

One of the key aspects of our work with the SFT has been ensuring that there is on-going dialogue to see how we can get bids that were not successful this time into a position whereby they could potentially be successful in future rounds of the programme. It is important that we continue that work and that dialogue.

I absolutely recognise the issue. Whenever I have been out and about on visits, I have not found one area, whether it relates to my portfolio, the wider economy or society, that is not struggling at the moment. The issue is felt particularly acutely in rural and island areas, given some of the challenges that we have talked about—particularly energy costs. The cost of living crisis is affecting everyone, but I think that it affects our rural communities more because of some of the factors that we have talked about.

We have tried to help as much as possible. I have talked about what we have done through agriculture payments to try to ensure that there is at least cash flow to aid businesses as much as possible. We have continued to develop and deliver other schemes, which will have a positive impact. Funding of more than £14 million is available through the marine fund Scotland this year. There is also the food processing, marketing and co-operation grant scheme, on which announcements will be made soon, I believe.

We know how critical such projects are. I hear all the time about what they have delivered in the past. It is important that we have been able to continue schemes, to ease the burden on businesses and communities as best we can with the resources that are available to us.

Again, only a small part of that sum has been allocated for spend in this financial year. We have to see what the allocations will be for forthcoming financial years before we take further decisions.

Yes. I have had meetings with the cabinet secretary to discuss those issues. I engage with a lot of stakeholders, including community groups and housing organisations, due to the nature of my role. Those issues are relevant to almost all policy areas, so my engagement with ministerial colleagues is really important.

There is also a ministerial task force on population, which is about those cross-cutting issues. I lead on the rural and islands strand of that work, which is led, overall, by the Cabinet Secretary for Constitution, External Affairs and Culture. We try to ensure that we deliver on those objectives, and we are engaging with stakeholders, because it is critical to do so if we are going to deliver the changes that our island communities need.

On your first point, that is not a budget cut to farming. As I said earlier, it does not impact on any current schemes or on what we are delivering through the national test programme. Again, it is ring-fenced funding that must come back to the portfolio. I want to be clear on that point.

We are restricted with regard to the changes that we can make and what we can deliver in that interim time, because of the legislation that was passed in 2020 and because of our previous commitment that we would deliver stability and simplicity throughout that time. It has been a really important piece of work to ensure at least as much stability as we can provide, given all the different crises and upheaval over the past few years.

I absolutely understand and take the point that people are planning for the future—they want to know what future policy will mean for their business and they want to see the detail of that. The consultation was not going to deliver that detail, because it is about the enabling powers that we need for future legislation.

However, set out within that is the broad framework of what we are looking at, and we also have our commitment that we will continue to support food production through direct payments. That is the conditionality bit, but, of course, the co-development that I mentioned is critical here, because we want to ensure that we get that right. That is why that work is important. We want to deliver something that will deliver on all our targets and that is, ultimately, workable.

I am absolutely committed to that work, and, of course, we want to provide as much detail as we can. More detail will emerge in due course.

Essentially, we listened to the people who live on our islands. We had extensive consultation, and the islands team went out and engaged with different island communities. Although, overall, the consultation results with regard to how people felt about the issue were finely balanced, the resounding response from island communities was that they did not want the policy to go ahead. To be honest, that is what we listened to. I do not want to thrust anything on to islands or island communities that they do not want or put in place a policy that would not end up working.

However, even though we are not going ahead with that policy, the consultation events that took place were really helpful. It was, in fact, really important that we undertook them, given how much came out of that engagement, and we are looking at all of that now and will, I hope, be in a place to take some of that work forward.

That is the thing—the people in these communities know them best, and all sorts of different suggestions came out of the consultation events about what could help to retain populations in island areas. We are really focusing on that feedback to find out what learning we can take and whether there might be any other pilot projects that we can take forward.

It is a case of taking on that learning. As I have said, there are pros and cons to both the approaches that we have taken.

It is important that we work with local authorities on the projects that have not been successful this time round. We had 15 applications to the fund, 11 of which were successful, and we should see what work can be done to ensure that we continue to take those important projects forward.

The Scottish Futures Trust’s work with local authorities throughout the process has been really important. As I hope the committee picked up in last week’s evidence session, our local authority partners find its expertise and advice to be very helpful. We can take on that learning as we move forward; in any case, I want to do a full evaluation of the past year’s scheme in comparison with the previous year’s to determine how we take these things forward in future years.