Infrastructure Investment Plan 2021-22 to 2025-26: progress report - 2021 to 2022

Annex A: Infrastructure Commission for Scotland - update on the progress against the broad themes of the Commission's recommendations.

The following information relates to the latest progress of the recommendations made by the Infrastructure Commission for Scotland (ICfS) in its Phase 1 Key Findings report.

Leadership

There are several recommendations focusing on how the Scottish Government delivers infrastructure policy: including a prioritisation framework and the delivery of a 30-year infrastructure Needs Assessment. Work is underway on this suite of outputs which will inform the next Infrastructure Investment Plan (IIP), which we will publish in 2025. These documents, including the 2025 IIP, will be informed by a more dedicated, structured public and stakeholder engagement process and we are working with Scottish Futures Trust (SFT) to develop this.

Place

The ICfS called for a place-based assessment of long-term housing supply, and an "Infrastructure First" approach to the planning system more widely. Through the Draft National Planning Framework 4 (NPF4), published for consultation in November 2021, the Scottish Government set out a proposed new spatial strategy that aligns with our investment programme and principles and seeks to embed an infrastructure-first approach to national planning policies. This has included a strategic assessment of long-term housing requirements to inform local development plans, housing land supply and more detailed place-based housing decisions, including alignment with Local Housing Strategies. Alongside the Draft NPF4 we consulted on draft regulations and guidance to inform the preparation of new style local development plans.

Housing to 2040, published in March 2021, set out the long-term ambitions for the delivery of 100,000 affordable homes by 2032, of which at least 70% would be for social rent, with this ambition being increased to 110,000 in the Programme for Government, including the delivery of 10% in remote, rural and island areas. The Draft NPF4 proposed a policy on Infrastructure First that puts infrastructure decisions at the heart of place making and supports a stronger link between the planning and delivery of infrastructure through the preparation of development plans and delivery programmes. The Scottish Government is working to bring forward a delivery programme, that will accompany the finalised NPF4, which will support the co-ordination of stakeholders and delivery partners to drive forward the implementation and delivery of NPF4.

The ICfS recommended that we should work with partners to develop and harness the skills needed to improve our places. Research into Skills in Planning commissioned by Skills Development Scotland, undertaken by EKOS and published by Partners in Planning in February 2021, provides an independent perspective on the challenges faced in the sector and a series of proposed actions. We are working with the other partner members of Partners in Planning to take forward the proposed actions to help support the future pipeline of planners. We are also leading various work strands to develop resources and capacity in place making.

Finally, the Commission recommended that the "one public sector" outcomes-based approach be developed. As part of the partnership behind the Place Standard tool, we launched a new Our Place website in January 2022. This new resource contains background, guidance and case studies on place-based working, infrastructure investment, spatial and community planning, community participation and provides a framework for embedding the Place Principle in decision making.

Making the most of existing assets

There were also recommendations around making the most of our existing assets, and we responded to this in the IIP with the introduction of our Infrastructure Hierarchy. The Scottish Public Finance Manual (SPFM) property policy updates aimed at addressing more of the ICfS recommendations in this space, are a work in progress, anticipated for publication Summer 2022. As part of these changes to the SPFM, Scottish Government will signpost to work we have undertaken with SFT to develop guidance, and this will also be published shortly. Additionally, we continue to implement the Scottish Climate Change Adaptation Programme 2 (SCCAP2), with annual progress reporting to the Scottish Parliament (in May 2021 and upcoming in May 2022). Following publication of updated Climate Change Risk Assessment evidence in June 2021, we commissioned the Climate Change Committee (CCC) to prepare its first statutory independent assessment of the SCCAP2 programme - which was published in March 2022.

Alongside delivering SCCAP2, we are now also developing the next statutory adaptation programme for publication by Autumn 2024. This programme will respond to the updated UK-wide Climate Change Risk Assessment (finalised in January 2022) and will be informed by the CCC's independent assessment of SCCAP2, as well as other sources of evidence and advice (including the findings of the ICfS).

The Energy Strategy & Just Transition Plan (ESJTP) will refresh the 2017 Scottish Energy Strategy and provide the first Just Transition Plan for the Energy Sector. The ESJTP will take a whole-system view of how the sector must evolve to drive our transition to net zero, with a specific focus on actions needed to meet our 2030 interim target. It will set out a vision for what we want the energy system to look like in the future to give certainty to investors and to wider stakeholders in the energy sector. It will also set out what is needed to deliver a just transition for the sector and will establish the energy system's role in delivering our national Just Transition Outcomes. The ESJTP will look to set out firm policy positions across sub-sectors, mapping out major decision points and infrastructure developments required to enable change. A draft will be made available for consultation later this year.

Heat and Transport

ICfS recommended that the Scottish Government set out proposals to substantially accelerate the development and implementation of incentives, support mechanisms and standards for energy efficient, net zero carbon buildings across Scotland. In October 2021, we published our first Heat in Buildings Strategy setting out our ambition to decarbonise 1 million homes and the equivalent of 50,000 non-domestic buildings by 2030. In addition, we set out a commitment to ensure that all homes achieve a good level of energy performance, equivalent to Energy Performance Certificate C, by 2033. The Heat in Building Strategy set out a package of measures including incentives, delivery programmes and a legislation to create long term market certainty and drive a scaling up in delivery. We are committed to establishing a new National Public Energy Agency with a specific focus on scaling up the delivery of energy efficiency and zero emission heating systems, with responsibility for delivery programmes, funding and finance and public engagement amongst other things. We have also published Heat Networks Delivery Plan that sets out how we will deliver our statutory heat network networks, which require 6Twh of heat to be supplied by heat networks by 2030. We also agreed to work with public sector partners and industry to establish the viability, Incentivisation mechanisms and a route map for the transition to net zero carbon that in combination addresses heating for domestic, commercial and public buildings as well as all surface-based transportation.

On transport, there were recommendations that Scottish Government and Transport Scotland develop a new investment appraisal and decision-making process, incorporating necessary changes to the current Scottish Transport Appraisal Guidance (STAG) and Investment Decision Making Guidance. An update to the STAG Manager's Guide was published on 20 January 2022. This incorporates the Sustainable Transport and Investment Hierarchies and elevates Climate Change to be a primary STAG criterion rather than a sub-criterion of Environment. Work is ongoing on the technical database part of the guidance.

Furthermore, to enable a managed transition to an inclusive net zero carbon economy road infrastructure, the Scottish and UK Governments were asked by the Commission to commit to work together to establish a charging/payment regime alternative to the existing fuel- and road- taxation-based structure. In our route map to reducing car kilometres by 20% by 2030 we committed to commission research exploring equitable options for demand management to discourage car use. The commissioning process is underway and will provide the basis for the development of a Demand Management Framework, by 2025. The research will help inform the development of our own policy measures.

The second Strategic Transport Projects Review (STPR2) published its draft recommendations in January 2022 and takes account of the post pandemic impacts on travel demand across the various modes. In considering the 45 recommendations for future transport infrastructure investment the STPR2 appraisal process has taken full cognisance of the National Transport Strategy's (published in February 2020) - Sustainable Investment Hierarchy which underpins the decision making process, where we will aim first to reduce the need to travel unsustainably, make better use of and enhance existing infrastructure, before investing in new capacity. The appraisal also used the latest STAG guidance and consideration of a potential option's impact on "Climate Change" as a key element within the decision making framework.

Regulation

There were also recommendations regarding formal regulation around water provision and flood management. Both the Water Resilient Places Policy Framework published February 2021 and the new flooding strategy for Scotland, currently under development, focus on bringing water industry and flooding objectives together to deliver climate resilient places, consistent with these recommendations.

Digital and Technology

The ICfS recommended the Scottish Government provide the leadership required to ensure the delivery of a full-fibre network by 2027 to enable the transition to 5G. The Scottish Government continues deployment of its flagship £600 million Reaching 100% (R100) programme that is actively delivering access to full fibre across the country and is working closely with the UK Government to maximise gigabit investment in Scotland. Similarly, there was a recommendation to prioritise support for indigenous data centre markets and investment in fibre optic cables – Scottish Government and partners launched their Green Datacentres and Digital Connectivity Vision and Action Plan in March 2021.

The ICfS were keen for Scottish Government to consider the future data requirements and data potential for all new publicly funded infrastructure, as well as the potential for the use of digital services associated with the assets. We are developing a Data Transformation Framework for Scotland to enable public bodies to understand their data maturity and the actions they need to take in order to adopt data standards to improve interoperability and make data available openly. We have established a Data Standards and Open Data Community of Practice to collaborate and drive the adoption of standards. The Open Government Action Plan further commits us to making data open with a focus on open data as an enabler: to align and implement the ambitions within these strategies in line with Open Government principles 2021-2025.

Finally, the ICfS recommended a centrally held data resource be developed, to provide open-source data that will inform place need and demand, including effective asset development, refurbishment and use, for an inclusive net zero carbon economy. The Scottish Government has built an online Data Atlas that contains 100 open-source geospatial data layers covering People, Economy, Energy, Environment, Built Environment, and Transport themes. This contributes to the evidence base for the National Planning Framework 4 and will continue to be developed as a resource for regional and local development planning. Additionally, working in partnership with the Improvement Service, we have developed a data quality measurement methodology. Initially used to assess development planning data, this is now being expanded to include development management data that will inform place need and demand. In 2022, we will develop a Data Strategy for the Planning and Building Standards sectors in Scotland along with a high-level delivery roadmap to ensure consistency and quality in place related data.

The role of the public

As mentioned above, the Scottish Government are working with SFT to develop a public and stakeholder engagement process to improve the way we engage on infrastructure improvement work. This has strong links to the Open Government Action Plan 2021-25, which has fiscal openness and transparency as one of its five core commitments. As part of this, Scottish Government has committed to "build on previous engagement and best practice to develop a multi-stakeholder approach to the next Infrastructure Investment Plan." Our work with SFT to respond to the ICfS recommendations is consistent with this commitment. Our annual updates provided via this report are a further example of our commitment to improve the accessibility and usability of our data and information about public finances, to enable better understanding and scrutiny for a wide range of users, including citizens.

Long-Term Independent Advice

The ICfS recommended a long-term, independent infrastructure advisory body in both its Phase 1 and Phase 2 reports. At the time of publishing the IIP, the Scottish Government committed to considering the recommendation further. Work on this continues – and is being jointly developed with our Programme for Government commitment to explore the options for a Scottish National Infrastructure Company (SNIC). Following the publication of the Resource Spending Review and the commitment to agreeing the optimal public body landscape for achieving improved outcomes, we do not expect to set up a new, independent body at this time, but will continue to work to improve the way infrastructure advice is provided to ministers, and to harness and best deploy existing public sector expertise in infrastructure delivery to fulfil the functions expected of a SNIC. This is consistent with our ambitions around SNIC, and further updates will be provided in due course.

We are thankful to the Commission for their work and their recommendations and, as set out above, we continue to work to implement the recommendations. We will update on progress in this report annually, as well as at other appropriate times in the year – e.g., around publication of key documents.