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I can only reiterate what I said in previous responses. I appreciate the inflationary impact, but it comes back to the fact that we have not seen increases in allocations from the UK Government. We should compare that to the overall spend that the UK Government is now putting into the Department for Environment, Food and Rural Affairs, which I believe is heading on a downward trajectory. We have passed on the baseline allocation of funding that we get from the UK Government and have added our own funding on top of it, as well as having the other schemes to support our farmers and crofters.

I disagree with that. I am sure that my officials will correct me if I am wrong, but the overall funding that has come through in the spending review is about £820 million or £840 million over the course of the period covered by the review, which reflects about a 1.1 per cent increase in resource terms. Capital funding is also falling. In a moment, I will hand over to George Burgess, who can talk more about the impact of the funding settlement coming through the Barnett formula, as opposed to the way in which it worked before.

It is a bit unfair to lay the blame at the Scottish Government’s door when we have provided funding that is over and above the baseline allocation. Previously, we received funding from the EU, and we were told by the UK Government that it would replace that funding in full, but none of those promises ever materialised. We rely on the funding for the payments that we are able to provide to our farmers and crofters.

It is important that we work through the budget process first, but I expect the plan to come in short order after that.

I mentioned big changes, but all the information that we have about when we expect schemes to change is already published in the route map. We have made the promise about there being no cliff edges, and we absolutely stick to that. We published as much information as possible to provide a line of sight and comfort about what potential new schemes could look like. There are no big surprises.

There are a few important things to bear in mind when you look at the AECS line. What we have allocated in the budget for 2026-27 covers the previous year’s contracts, which run on a five-year basis. We not only have the funding to provide for those contracts but have enough to allow all the approved projects from the most recent round of AECS in 2025 to be funded, too.

AECS is a demand-led scheme, so you are not necessarily comparing like with like. We are able to fund all the previous contracts as well as any new ones that are entered into following the success of the 2025 round. By its nature, the line will fluctuate from year to year, depending on the demand.

In previous years, we have had to restrict the items that are available in some rounds of AECS funding because of the capital that was available at the time. From what I remember, in 2025, we expanded that slightly and we are looking to see what improvements or further expansions we could make for 2026, so you could expect that line to change in future years. However, it is important to remember that it is a demand-led scheme, which is why we see those fluctuations.

That is where we have been engaging with stakeholders over the past year—we have been considering how we make improvements and how we make the process less cumbersome for people. Those are the kind of things that we are looking at, because the scheme can deliver so much. It has been one of the key climate delivery mechanisms—whether for tackling emissions or for nature restoration. We want to make those improvements where possible while trying to address some of the challenges that you have identified.

If you consider that in terms of AECS, as you were pointing out—although I cannot remember which figures you were basing your point on—that looks like a fault. It is hard to say, as the process is demand led, which I hope that I have been able to explain. However, that could well change over time.

I am sorry: I have perhaps not been able to explain that fully, but we are not necessarily comparing like with like, as I have explained, given how AECS operates. That will be the key mechanism through which we would look to deliver tier 3, until we get the future framework fully operational.

That would be a consideration for next year’s budget, because we have not opened the 2026 round.

Yes. As I said, what we have in the budget for 2026-27 covers the previous year’s contracts, and it means that we will be able to award all the successful applications from the 2025 round.

We have had to look at that closely in previous years. We have ended up restricting rounds or the support that is available purely because we are trying to focus that support on the measures that we believe will do the most for climate and nature. The scheme was quite expansive and it funded quite a lot of different areas. I know that some people would like to see that approach return. However, as we have had less capital available, we have had to target it as best we could.

It is not possible for me to predict what will happen next year. When we open the round, we could well see more applications, because we are trying to make improvements to the scheme. However, as I said, we certainly have enough this financial year to cover the most recent round of applications.

I would be happy to, because they are not always apparent. Some of the budget lines can be unhelpful in their descriptions and they do not necessarily outline all the details of the schemes that run under them.

One of the key lines in the budget that delivers on the skills aspects that you are talking about is the business development line, which has had an increase on the previous year. Through that line, we provide funding for the Farm Advisory Service, new entrants and the next generation, and the pre-apprenticeship programme. Some of the funding that is earmarked for new entrants and the next generation has been used for practical training funds, which have been well utilised and broadly welcomed by the sector.

09:45

I should also mention the monitor farm network and the knowledge transfer and innovation fund, which have been critical for peer-to-peer learning. We know that those are important, as that came out strongly in the evidence that we heard during the passage of the Agriculture and Rural Communities (Scotland) Act 2024.

That is the business development line, but there are other lines across the budget where there is funding for skills, although it might not be so apparent. There is the funding of £600,000 that we provide to Lantra, which does incredible work. It led the work that we did on the land-based learning review, and we are still committed to implementing the recommendations that came out of that. We have funding for Women in Agriculture, some of which has been used for a practical training fund for women and girls.

More broadly, funding is available through the food and drink budget. This is more about education, but we provide funding through those lines for the likes of the Royal Highland Educational Trust, the food for life scheme and other areas involving food education and skills, such as the food for thought education fund.

It is quite hard, because it seems like the funding is a bit all over the place when you consider the budget lines. However, I hope that that is helpful in outlining some of the schemes that are available and that we are delivering.