Seòmar agus comataidhean

Absolutely there is. If that did not come across in the reply, it should have. The supply chain development programme that we are taking forward is very much focused on identifying areas of the economy and supply chains in which we can build more resilience and shift to having more capacity and capability in Scotland, particularly in manufacturing. That covers a wide range of programmes, including the work in Scotland to support the building of indigenous local supply chains for floating offshore wind technology.

On hydrogen, we recently published a report that identifies opportunities for manufacturing businesses in the upcoming hydrogen supply chain.

There are opportunities in construction, the timber supply chain, offsite manufacturing for the construction sector, and in life sciences around medicines manufacture. We are, of course, about to open the medicines manufacturing innovation centre in Inchinnan. We recognise that there are opportunities across a whole range of sectors for Scotland to further strengthen our indigenous supply chains and to encourage and support Scottish businesses to take advantage of those.

Of course, the committee will recognise that global supply chains are complicated and that, clearly, with regard to the raw material supply situation and many manufacturing processes, we are not in a position to be able to take over all supply chains, and it would be foolish to attempt to do that, given the complexities that are involved. However, of course, for reasons of economic development and resilience, where we can engage with supply chains, we seek to do that.

Much of our approach is built on the response to the pandemic. As you know, we were successful in building up an indigenous Scottish supply chain for personal protective equipment during that time.

As I said, the priority with regard to supply chains is to look at where there are opportunities for us to be competitive because we have the necessary capability and technology to maximise the opportunities for the manufacture of products within Scotland.

On the food supply chain specifically, Scotland has a thriving food and drink sector, which we are proud of. The Cabinet Secretary for Rural Affairs and Islands is focused on what we do to continue to develop that sector. There are many factors that relate to agriculture more broadly, including climate change and financial support, but the supply chain is a big issue, and, where there are opportunities for us to grow more produce in Scotland in order to support resilience, and where that makes sense for the agriculture sector, that is something that we are focused on.

That is correct.

I will let Dermot Rhatigan talk specifically on timber and the broader stuff that we are doing in that regard. Timber is one of the areas of focus in the supply chain development programme. In Scotland, we manufacture more of our housing stock from timber than is the case in the rest of the UK. We see opportunities to do more of that and to increase embodied carbon. There are technical issues, but Built Environment-Smarter Transformation, or BE-ST, which is the construction innovation centre over in Blantyre, is leading the way on research, and is working with universities and others on mass laminated products and other products that can be utilised more extensively in the supply chain.

I have engaged with sawmills and others on what they can do to increase output. One of the challenges that we have with timber is that it has probably the longest lead time of any item—it has a 30-year lead time—which means that we will not see the results of any decisions that are made now for a very long time. I should say, though, that Scotland’s forest coverage continues to increase, which is to be welcomed.

It is perhaps worth mentioning other factors that highlight the complexity of this issue. For a start, there is the clear biodiversity challenge of which species you choose to grow, given that what you grow in order to mass produce housing stock, say, might not be what you need to grow for other purposes or might not be part of the balance that you would want from a biodiversity point of view. Those things have to be considered, too, and they are part of what we need to think about with regard to native species. We are all committed to getting that balance right.

Further downstream, there is also the work that is being taken forward by my colleague Patrick Harvie and others on heat in buildings and the decarbonisation of property as part of the net zero agenda. Making changes to regulations to encourage the Scottish supply chain will, of course, be a factor, but the primary concern will be changes that deliver the best cost-effective solution to the net zero challenge. Getting that balance right is something that we are working on across Government, but all of that work is happening so that we can move forward as fast as we can within the current constraints.

That is absolutely done. I worked in manufacturing for 30 years, and I understand how this stuff works. We are 100 per cent focused on that, relentlessly.

You will know that it is illegal to specify what you have just asked us to specify because of the World Trade Organization’s agreement on Government procurement, or GPA, rules and our international free trade agreements—the European Union trade agreement and so on. We must have an open market.

We do everything that we can to ensure that as much of the product as possible is manufactured in Scotland. We make that visible. We produce guidelines on that, and we work—I refer to the importance of the investment in Alpha Solway—to ensure that businesses and supply chains have the capacity, capability, expertise and technology to compete in a global market and win contracts.

Alpha Solway has done a great job in winning contracts. It did that fair and square, and it beat competition from around the world. That is because of the support in training, investment and so on from the Scottish public sector.

As I said, all of that has to be done within the rules. That is the legal reality of the system in which we operate. However, as Graeme Cook said, our success in that regard has been quite significant. In Scotland, 47 per cent of the spend in public sector procurement goes to SMEs. That is significantly in advance of anything that is happening in the rest of the UK, where the percentage is in the 20s, and across the EU, where the average is somewhere in the high 20 per cent range.

We have made significant progress in that regard, and the results demonstrate that. However, the focus on that continues to be relentless. We look for every opportunity through the supplier development programme; our round-table discussions with SMEs to understand the challenges for them in accessing the public procurement process; working with partners across the public sector; and the work that we are doing on the Scotland innovates portal, which we have just launched. That invites Scottish businesses with innovative solutions to public sector challenges to put those online so that we can assess them and find a public sector procurement route for them. We look for opportunities through the work that CivTech does in putting out public sector challenges.

We are relentless on all that stuff. We have tremendous focus on it, and I regularly meet procurement officials to take work forward. As members understand, all of that is, of course, done within our legal restrictions.

We do not have the power to tell a local authority, for example—

I will respond to the committee and let it know the outcome of that inquiry. As I have said, if a local authority decides to purchase something, we are not in a position to tell it where it should buy it from. If we did that, others would say that we should not be doing that. I have written very clearly and strongly to make those points to all public sector authorities, and I would be very happy to update the committee on any responses that we receive in that regard.

A big focus of the transition is on the modal shift in transport and the net zero impacts of that. In our recent report on Scotland’s electric vehicle charging market, we identified what needs to be done, but we also very much recognise that that needs to be done in partnership with the private sector. Given the investment required, the public sector can do part of the work, but the bulk of it will need to be done by the private sector.

As a result, “A Network Fit For The Future: Draft Vision for Scotland’s Public Electric Vehicle Charging Network” not only sets out our ambition to work with the private sector to develop the charging network but makes clear what would be commercially viable for the private sector to pick up itself and the gaps that the public sector would then need to fill. We have also, as part of that work, announced the electric vehicle infrastructure fund, which has £60 million of target investment.

However, you are right to suggest that that work needs to move forward if we are to enable that modal shift to happen. We absolutely understand that, and we need to work with the private sector to ensure that the investment is in place to deliver on that.

Does Andy Park want to comment?

Yes, of course I am. We are focused on doing everything that we can but, as we already identified, many of the levers for Scotland’s general energy policy are reserved, so the challenge is what we can do there. It is about building those supply chains in an environment where there is uncertainty at a macroeconomic level, a lack of support and challenges on the skills side. Cost pressures are obviously difficult, but we are in this for the long haul and we are working with those businesses to strengthen the supply chains and take advantage of the significant spend that is coming Scottish businesses’ way, through the work that we have done with developers to roll out the ScotWind projects.

Aye, so—