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As per previous Climate Change plans, it must contain policies and proposals, by sector, for meeting the economy wide annual emissions reduction targets for each year. The Plan will also set out for the first time the costs and benefits (including financial cost, emissions and jobs) of the policies it contains, as well as setting out how it will affect different sectors of the Scottish economy and different regions in Scotland.

The Cost of Living (Tenant Protection) (Scotland) Act 2022 is a response to the impact of the cost crisis on those living in the rented sector. The Scottish Government has made clear provisions in the Act must be expired or suspended if they are no longer considered necessary and proportionate in connection with the cost of living.

As set out in our first report to Parliament on the operation of the Act, the social sector rent cap expiry follows the development of an agreed approach on rent setting for 2023-24, taken forward on a voluntary basis, with social housing landlords. Social housing landlords are “not for profit” organisations and all rental income is used to support the delivery of housing and associated services for tenants. Under the Scottish Government’s Social Housing Charter, social landlords are required to set rents and service charges in consultation with their tenants so that a balance is struck between the level of services provided, the cost of the services and how far current and prospective tenants and service users can afford them.

The private rented sector has a high quantity and range of landlords, as well as a very different statutory regime governing its rent increase process. It was therefore not feasible to replicate the Task Group that formed in respect of the social rented sector, where all landlords could be effectively represented by membership bodies.

Whereas social sector rent setting practice involves rents being set annually and in consultation with tenants, with further rent increases typically not taking place either inter- or intra-tenancy, the latest data shows high levels of recent private sector rental growth.

The Scottish Government Private Rent Statistics (primarily based on advertised rents) show a 6.2% annual increase in average 2 bedroom monthly rents across Scotland in the year to end September 2022, while data from letting agents (which relates to new let rents only) show high growth: Rightmove reporting an annual increase of 13.0% and Citylets an increase of 8.3% in Q3 2022 in Scotland, and Zoopla reporting an increase of 11.4% for Scotland in October 2022.

In light of the updated economic analysis recently undertaken – and as set out in the recently published Statement of Reasons – the Scottish Government is of the view that it would be proportionate to raise the rent cap in the private rented sector to allow within-tenancy rent increases of up to 3%.

The voluntary approach to rent setting taken by landlords in the social sector is intended to equate to an approximate average rental increase of less than £5 a week (or less than £22 per month) across the country. As rents in the private rented sector are generally significantly higher than those in the social rented sector, allowing a maximum rent increase of 3% for rents in the private rented sector equates to a similar average rent increase for tenants in two-bedroom properties (the most common property size in the private rented sector). There will be variation around these averages, with higher increases for three-bedroom and four-bedroom properties and lower increases for one-bedroom properties.

The Scottish Government considers that this will give a measure of parity to landlords in the private and social sectors in monetary terms, while continuing to protect tenants from unaffordable rent increases during the cost crisis. The increase to the rent cap will mitigate against a disproportionate impact on private landlords who may also be experiencing increased costs due to the cost crisis, allowing them to maintain their properties and meet other expenses. We are also proposing that private landlords could, alternatively, opt to apply to Rent Service Scotland for a rent increase of up to 6% if they have had an increase in their defined, prescribed property costs within a specific period.

Scotland leads the way in the delivery of affordable housing across the UK, and we have committed to delivering 110,000 affordable homes by 2032, of which at least 70% will be available for social rent. Enabling continued investment in the delivery of high-quality social housing is therefore crucial. Social sector representatives have set out that the current cost crisis poses an enormous threat to this progress, with inflation rates having a far greater impact on the poorest 10% of the population, and living standards and real incomes expected to fall across the UK. The volatility of the economic environment also has significant consequences for housing associations, and the services they provide to tenants.

The Scottish Government has therefore been clear from the introduction of the Cost of Living (Tenant Protection) (Scotland) Act 2022 that we want to work with the social rented sector to seek an agreed way forward as an alternative to the continuation of the Act’s rent cap beyond March 2023.

The outcome of discussions led by COSLA, in respect of local authorities, and the Scottish Federation of Housing Associations (SFHA) and Glasgow and West of Scotland Forum of Housing Associations for Registered Social Landlords, has reached an agreed position with their members that would see increases of 6.4% and 6.1% respectively, as an average across Scotland.

The agreement of an average figure, rather than a fixed cap, is only possible due to the nature of the social rented sector and the opportunity to reach agreement with sector representative bodies. This approach has the advantage of allowing a degree of flexibility to recognise social landlords' priorities for investment such as new supply, refurbishment and services to tenants. We anticipate that the majority of rents will be increased at a level below the agreed 6.4% (for local authority landlords) and 6.1% (for registered social landlords) but there may be some social sector landlords who will, for specific reasons, go beyond these levels. This approach recognises that in some cases tenant feedback to the statutory rent consultations may be in favour of an increase higher than the overall averages agreed, for example to allow planned improvements or maintenance to proceed.

The Scottish Housing Regulator is monitoring and collating social sector rental data presently, and will report in due course.

The initial approach for the Single Building Assessment pilot involved giving grants to homeowners through a property factor. Sixteen Single Building Assessments were commissioned through this approach, which is referred to as Pathway 1. In May I confirmed to Parliament that the Scottish Government would move to directly procuring Single Building Assessments, an approach termed Pathway 2. Eight Single Building assessments have been, or are in the process of being, commissioned through the Pathway 2 route. In addition three Single Building Assessments are being commissioned in partnership with developers. Fourteen Single Building Assessment reports have been submitted to the Scottish Government and remediation has started on one building.

I provided an update on progress on cladding remediation to Parliament on 2 March and remain committed to arranging a more detailed technical briefing and making a full statement to Parliament at the appropriate time. Information on the Single Building Assessment programme has been provided to Parliament through responses to Parliamentary Questions. Data on spend and information on the numbers of buildings in the Single Building Assessment Pilot is published on the Scottish Government website Single Building Assessment programme: spending information - gov.scot (www.gov.scot).

To respond to the emergency situation caused by the impact of the cost crisis on those living in the rented sector, the Cost of Living (Tenant Protection) (Scotland) Act 2022 introduced a temporary, variable rent cap, initially set at 0% and in place until 31 March 2023.

Our recently published first report to Parliament on the emergency Cost of Living Act, and Statement of Reasons , provided updated economic evidence demonstrating the continued pressure being placed on private rented households due to the ongoing cost crisis. In light of this, the Scottish Government have brought forward regulations to extend the rent cap for the private rented sector for a further six months, along with the moratorium on enforcing evictions – which will continue to apply across all sectors.

While the focus of the emergency measures continues to be on protecting tenants, the Scottish Government recognises that the ongoing impacts of the cost crisis may also be being experienced by some private landlords. Mortgage interest rates, which had been on an upward trend since the end of 2021, experienced a further sharp increase after the UK Government Growth Plan / Mini-budget on 23 September 2022. The average advertised five-year fixed rate rose from 4.75% on 23 September to 6.51% on 20 October, before falling to 5.95% on 22 November.

The Scottish Government is of the view that it would therefore be proportionate to raise the rent cap in the private rented sector to allow within-tenancy rent increases of up to 3% from 1 April.

The voluntary approach to rent setting taken by landlords in the social sector is intended to equate to an approximate average rental increase of less than £5 a week (or less than £22 per month) across the country. As rents in the private rented sector are generally significantly higher than those in the social rented sector, allowing a maximum rent increase of 3% for rents in the private rented sector equates to a similar average rent increase for tenants in two-bedroom properties (the most common property size in the private rented sector). There will be variation around these averages, with higher increases for three-bedroom and four-bedroom properties and lower increases for one-bedroom properties. The Scottish Government considers that this will give a measure of parity to landlords in the private and social sectors in monetary terms, while continuing to protect tenants from unaffordable rent increases during the cost crisis.

While there may be some households where even the modest rent increase allowed under the 3% cap causes an increase in financial hardship, we consider that the amended rent cap will ensure that rent increases are proportionate and therefore continue to protect households against high rent increases while the cost crisis is ongoing. The increase to the rent cap will mitigate against a disproportionate impact on private landlords who may also be experiencing increased costs due to the cost crisis, allowing them to maintain their properties and meet other expenses. We are also proposing that private landlords could, alternatively, opt to apply to Rent Service Scotland for a rent increase of up to 6% if they have had an increase in their defined, prescribed property costs within a specific period.

The Scottish Government maintains regular contact with Circularity Scotland Ltd (CSL) at both Ministerial and official levels.

Business can continue to register with CSL. If they are concerned about being able to meet their obligations, including those who have concerns about the producer agreements or other matters related to the registration process, should contact CSL for advice and guidance as soon as possible. They can do so via their dedicated helpline or through their website.

 I urge producers to begin their registration for the scheme if they haven’t already and contact the scheme administrator, Circularity Scotland, for advice and guidance.

CSL has recently run a series of information workshops across the country to enable business affected by DRS to learn more about the scheme and an online webinar is available for those who could not attend. CSL also has a trained team of advisers who can support individual businesses in getting registered and ready for DRS.

Currently consented oil and gas extraction is a reserved matter and, therefore, associated impact assessments would be the purview of UK Government.

It is disappointing that the Climate Compatibility Test proposed by the UK Government is limited to new exploration. That is why we are consulting on what factors should be considered in assessing the impact of new oil and gas production and if this test should be applied to fields that are already consented but not yet in production as well as new exploration (if exploration continues) in the context of the global goals of the Paris Agreement.

Furthermore, the draft Energy Strategy and Just Transition Plan outlines actions to accelerate the transition and is out for consultation until 9 th May. Our final Energy Strategy and Just Transition Plan will take account of the consultation response and be published in due course.

Independent analysis on the energy system and just transition, published this month, includes a detailed assessment of oil and gas production in Scotland. Our forthcoming Climate Change Plan for Scotland, a draft of which is due in November, will set out our pathway to meeting our emissions reductions targets to 2040 alongside the costs and benefits of policies within the plan.

We are working to ensure that the important role of our ocean in mitigating and adapting to climate change is recognised. Scotland’s Indicative Nationally Determined Contribution to the Paris Agreement sets out our commitment to developing the evidence base to support inclusion of two blue carbon habitats, saltmarsh and seagrass, in the UK Greenhouse Gas emissions inventory as soon as it is appropriate to do so. We are working with the Scottish Blue Carbon Forum and UK Blue Carbon Evidence Partnership to identify and address key evidence gaps and develop a road map to inclusion. However, while we are considering how the next Climate Change Plan can include current and future policies on wider issues, it is unlikely that either habitat will be included in the UK inventory ahead of the next Climate Change Plan and therefore will not contribute directly to delivery of Scotland’s statutory emissions reduction targets which the Plan is designed to meet. We are also seeking to better understand the risks to blue carbon habitats and how to protect and enhance them within marine planning, marine protection and enhancement policies.