Seòmar agus comataidhean

Thank you, convener. This programme for government is set against the backdrop of a cost crisis and is focused on providing help now as well as continuing to build a wealthier, fairer and greener country.

In my portfolio, that has been approached on a number of fronts. On energy, we continue to invest and extend eligibility for the warmer homes Scotland programme to support households’ lower energy costs and help tackle the climate crisis. We are launching the £25 million Clyde mission decarbonisation fund to support zero-emission heat projects. We have published an energy strategy and a just transition plan to guide our path to net zero. The strategy will set out our continued support for the energy sector and plans to maintain Scotland’s position as one of the most advanced nations in the world in the development of wave, wind and tidal technologies. I am determined that we take full advantage of our natural assets and support our burgeoning industries in those sectors.

The scale of our onshore and offshore wind capacity also gives us huge potential in green hydrogen. In the coming months, we will publish our hydrogen action plan, backed by £100 million of capital funding.

The effect of the global climate crisis on nature is also a key feature and builds on the programme that we set out within our Bute house commitments to deliver on Scotland’s climate and nature ambitions. Climate actions range from record investment in active travel, to providing £50 million of funding over the next four years as we move forward with our just transition fund.

To address the nature crisis, we will publish our biodiversity strategy, take steps to meet our commitment on highly protected marine areas and consult on fisheries management measures. We will start the process of developing a new national marine plan, continue work to identify the location of a new national park and develop a land reform bill. We will enhance the forestry grant scheme and introduce a wildlife management bill for grouse. We will introduce a circular economy bill and publish our new national litter and fly-tipping strategy for Scotland later this year. In August next year, we will launch our deposit return scheme, the first of its kind in the UK, which will cut carbon, increase recycling and reduce litter.

On transport, ScotRail fares will be frozen until March 2023 and we will complete the fair fares review, delivering options for a sustainable and integrated approach to all public transport fares. We will also support the continued delivery of free bus travel for those under 22 and over 60, which covers almost half of the population. We will invest in vital improvements in our ferry services and consult on our islands connectivity plan. We will deliver record investment in active travel to continue to support new routes for walking, wheeling and cycling.

Convener, I am of course more than happy to respond to any questions that the committee may have.

In short, yes. Presently, the freeze is until March 2023 and part of our work on the fair fares review is looking at where we go with that. For example, in January 2023, the fares would have gone up based on July’s retail prices index, which was 12.3 per cent for regulated fares. That rise is clearly not sustainable and we are not taking it forward. We are presently undertaking work on where we go with the fare freeze.

We have to keep it in mind that when you freeze fares you create a revenue gap on the rail network that has to be met. The fair fares review and also the work that is being taken forward by the finance secretary for the next financial year is all part of looking at what we should do to help make sure that we minimise the potential increase in any fares.

There are a number of big issues in there. There is absolutely no doubt that the public sector will not be able to pick up all the costs associated with decarbonisation across a whole range of areas within local government, and private sector investment will be critical to help to support that.

It is also fair to say that there is a significant amount of private sector investment available for the right types of propositions. We developed the global capital investment plan, which was published back in March last year. It aims to align the investment opportunities in Scotland with what the private sector is looking to make investments in. The outcome of that is the green investment portfolio, which brings together about £3 billion of potential projects into which private sector investment could be made. Some of those projects are across different local authorities and different parts of the public sector. That is seeking to achieve—this is one of the things that you get from private sector investors—investment propositions of a scale that they believe merits their investment and that they ultimately will get some form of return on in the medium to longer term. Outwith maybe four or five big local authorities—perhaps even them—local authorities might struggle to get propositions together. The idea behind the green investment portfolio is to help to bring together some of the proposals that local authorities have and to try to align them with what private sector investors are looking at.

That could be looking at a whole range of propositions. It could be things such as investment in the provision of district heating, which would be for not just social housing, but private and potentially commercial premises as well. It could be something like what we announced around EV charging and the partnership with the private sector over the course of the next couple of years, doubling the level of investment from the private sector. Again, that was about trying to scale that up across local authorities to align with what private sector investors are looking for.

We have created a mechanism that allows local authorities and other public sector organisations to come together to create propositions, and there is some funding available from the Scottish Government that can help to do some of the pre-capital investment work in developing such propositions in a form that could make them attractive to private investors. We have a mechanism for doing some of this. The key thing is starting to make some of that become a reality and to see some of that investment start to flow into local authorities.

It will not have an immediate impact, because the money was not ring fenced specifically for that purpose, and the Deputy First Minister also said that the money would be returned to the ScotWind pot in the next couple of years when the finances allowed for it.

However, the decision is a recognition of the very serious and difficult financial circumstances that we are facing. The Deputy First Minister took the decision on the basis of the financial pressures that we are facing, but he also committed to returning that money in the years ahead as we look to use the ScotWind investment not just for just transition but to support us in meeting our climate change targets. Indeed—and this brings me back to the inquiry that you have been holding over the past year—it will also be for effecting these things at a local level and for supporting our local authority colleagues and partners in meeting their climate change obligations. In short, the decision is a reflection of the challenging financial environment in which we are operating.

The way in which offshore wind lease options operate is that, if a development is within 12km of a local authority area, the revenue generated from that lease option goes to that local authority. The difference with ScotWind is that many of the developments are beyond that point, so the money will go into what is intended to be a central fund, and we want to work with local authorities and use that money to support them in achieving their climate change objectives. That is the purpose behind what we are trying to achieve with ScotWind; we want to ensure that it provides a wider community benefit right across the country.

The importance of buses in tackling some of the challenges that we face in getting folk to move to public transport is often underestimated. After all, 80 per cent of public transport journeys are by bus, and buses play a huge role in getting folk out. That said, I recognise the challenges that communities face; indeed, I suspect that we all have the same challenges in our communities with regard to the quality of bus services, services being withdrawn and so on. I certainly have those challenges in my own constituency.

We want our bus services to be sustainable. One of the provisions in the Transport (Scotland) Act 2019, which the convener will be very familiar with, was a suite of options for local authorities to play a more effective regulatory role in managing and delivering bus services, whether that be through bus improvement partnerships, running bus services on their own or a franchise model. I sense that a number of local authorities are looking at franchises, which give them much more direct control over specifying the services that will be delivered within their communities.

I want buses to play an important part in the public transport offer in urban and rural areas, but I recognise the challenges in that respect. As I have said, though, there are now regulatory provisions that will allow local authorities to start looking at the models that might work best for them in delivering bus services in their area and which will be more reflective of what the local community is looking for as well as the council’s expectations for those communities. We still have some work to complete on the statutory guidance that will go alongside that, but we hope to do that this year.

Potentially. I would just point out that what works in Edinburgh will not necessarily work in west Stirlingshire, and a community bus model for somewhere like west Stirlingshire might look very different from what you might want to provide in Edinburgh, Glasgow, Aberdeen or Dundee. However, the community bus fund could support some of the work on that.

Anne Martin might want to say a bit more about the operation of the community bus fund but I have to say that I do not want it to be used for only this purpose and no other purpose beyond this particular model. There will be different models, and different approaches will work in different areas.

Are you referring to the idea of community asset transfer from local authorities to communities and how that fits into the circular economy process and how we make sure that investments made in asset transfers are consistent with the circular economy approach?

I cannot profess to be an expert on EPCs from a technical point of view. I know that we require them for a range of matters. For example, for social housing landlords, letting properties and at the time of sale of properties, EPCs must be completed. I am afraid that I will have to take some technical advice on whether they are the most effective technical way to provide that assessment to an individual household. I am not particularly versed in that.

We have seen recovery in real patronage, although not to the levels that we want. That has been affected by industrial action. I do not know whether Anne Martin can say a bit more about the process of the fair fares review. I am not entirely sure exactly what has happened to that petition but drawing it up into the fair fares review would seem to be the most appropriate way to deal with it. Anne Martin may be able to say a bit more about how we take forward the fair fares review and what its timescale is.