Infrastructure Investment Plan 2021-22 to 2025-26: progress report 2022 to 2023

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 in implementing the recommendations made by the Infrastructure Commission for Scotland (ICfS) in its Phase 1 & 2 reports.

Phase 1 Recommendations

Leadership

Recommendations under this theme include the introduction of a transparent infrastructure prioritisation framework, a 30-year infrastructure needs assessment and that these should inform the next Infrastructure Investment Plan (IIP).

The IIP prioritises the pipeline of investments against three themes, including enabling net zero emissions and environmental sustainability, driving inclusive economic growth, and building resilient and sustainable places. It sets out a five-year programme of improvements to infrastructure planning, ready to support future Infrastructure Investment Plans. This includes the development of a new infrastructure assessment framework and a system-wide Infrastructure Needs Assessment.

Work is ongoing and remains on track to deliver in time for the next IIP. In particular, progress has been made on scenario development to underpin the Needs Assessment, in conjunction with Scottish Future's Trust (SFT) and external consultants.

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. 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. We will, of course, 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.

Place

Recommendations under this theme include the introduction of National Planning Framework 4 (NPF4), a coordinated and appropriately resourced Infrastructure First approach to the planning system to ensure the effective delivery of a Scotland wide, integrated and coherent outcome-based approach to planning spatial land use.

The ICfS called for the development of a place-based assessment of long term housing supply and demand across Scotland by 2021, supported by the development of a coherent strategy for the labour market and business opportunities arising from an inclusive net zero carbon economy. NPF4 was adopted on 13 February 2023, becoming part of the statutory development plan and being directly relevant to planning applications across Scotland. As part of a dedicated 'Quality Homes' policy, Minimum All-Tenure Housing Land Requirements (MATHLR) are provided for each planning authority in Scotland. This is the minimum amount of land, by reference to the number of housing units, that is to be provided by each authority for a 10-year period. The amount is expected to be exceeded locally in Local Development Plans (LDPs). With NPF4 now in place, we are currently finalising regulations and guidance to inform preparation of new style LDPs. Regulations are expected to come into force and guidance is to be published in spring 2023.

The ICfS recommended that the Scottish Government support the implementation of NPF4 and the new system of development plans, a co-ordinated and appropriately resourced IF approach to the planning system should be introduced by 2021. As stated, NPF4 was adopted in February 2023, and is now part of the statutory development plan and directly influences planning decisions across the country. It includes a dedicated Infrastructure First policy that recognises the importance of putting infrastructure at the heart of place making. The IF approach aligns with other national plans and strategies. Alongside NPF4 we published the first iteration of a delivery programme setting out arrangements for governance, funding and monitoring.

Making the most of existing assets

Recommendations under this theme include maintaining existing infrastructure over new infrastructure and to favour shared facilities over construction of new, single purpose assets. The development of guidance for relevant authorities to infrastructure maintenance and prioritisation; to establish a route map for the implementation of a system of resource use, reduction, collection, treatment and repurposing; and to develop a clear implementation plan, to address critical natural and built infrastructure climate resilience and adaptation need.

There were also recommendations around making the most of our existing assets. We responded to this in the Infrastructure Investment Plan 2021-22 to 2025-26 and the Scottish Government Infrastructure Hierarchy, and this remains a cornerstone of our investment decision making. Our colleagues at SFT have also published a Public Sector Asset Strategy and we continue to work see this embedded across the public sector.^[1]

The Scottish Government continues to implement the Scottish Climate Change Adaptation Plan 2 (SCCAP2) programme, with annual progress reporting to the Scottish Parliament. Following publication of updated Climate Change Risk Assessment evidence in June 2021, the Scottish Government 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. Discussions within the Scottish Government on further approaches in this space are ongoing. Additionally, Scottish Government is developing a route map to reduce waste to meet our waste and recycling targets for 2025. A consultation on the Scottish Government waste route map was published in May 2022.^[2] The final route map will be published later in 2023.

Heat and Transport

Recommendations under this theme include the implementation of incentives, support mechanisms and standards for energy efficient, net zero carbon buildings across Scotland and to establish a route map for the transition to net zero carbon. Transport policy is to work to fully reflect the need to deliver an inclusive net zero carbon economy and consider infrastructure use as part of a holistic system, and to enable a managed transition to an inclusive net zero carbon economy road infrastructure.

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 2021, we published a Heat in Buildings Strategy setting out our ambition to decarbonise one million homes and the equivalent of 50,000 non-domestic buildings by 2030, with an update provided in 2022. In 2020, The Net Zero Carbon Public Sector Buildings Standard was approved by ministers – with supporting documentation made available in 2021 – and we continue to roll this out, ensuring new public buildings are net zero ready.^[3] Furthermore, we have published a draft Energy Strategy and Just Transition Plan for consultation January 2023. The consultation was extended and closed on 9 May 2023.

The Hydrogen Action Plan was published in December 2022; policy officials are now working to take forward the commitments it contains. The Climate Change Plan update shows how Scotland will drive down emissions to meet its climate targets up to the year 2032. A draft of the next Climate Change Plan, covering 2024-2040, is due to be laid in Parliament in November 2023. In addition, The Bute House Agreement includes a commitment to invest at least £1.8 billion over the course of this Parliament. This includes the following allocations:

• at least £465 million to support those least able to pay, delivered through our Warmer Homes Scotland and area-based schemes.
• £300 million for Scotland's Heat Network Fund.
• £200 million Social Housing Net Zero Heat Fund, investing in a sector already leading the way in the heat transition.
• £200 million Scottish Green Public Sector Estate Scheme, supporting leadership for energy efficiency and heat decarbonisation right across the public sector.

On transport, there were recommendations that Scottish Government and Transport Scotland should ensure that it's new National Transport Strategy and Strategic Transport Projects Review 2 fully reflects an inclusive net zero carbon economy and consider the infrastructure and the use of it as a holistic system. The second National Transport Strategy (NTS2) fully reflects our need to deliver our ambitious net zero targets, with the Sustainable Travel Hierarchy and Sustainable Investment Hierarchy at its core. The NTS2 Delivery Plan reflects the transport element of the Climate Change Plan Update, including our commitment to reduce car kilometres by 20% by 2030. It also includes a new policy to encourage people back on to public transport, post-COVID-19, when it is safe and appropriate to do so.

The Scottish Government are developing the transport appraisal guidance and decision-making processes. This will include considering changes to the approach to assessing emissions impacts associated with infrastructure projects. We will assess future transport investment decisions through the second Strategic Transport Projects Review; embedding the NTS2 priorities and outcomes and the Sustainable Investment Hierarchy. Powers relating to Vehicle Excise Duty and Fuel Duty are reserved to UK Government. The Scottish Government has written to the Secretary of State and would welcome constructive discussions with UK Government on these issues.

Additionally, the 45 Strategic Transport Projects Review 2 (STPR2) draft recommendations for future transport investment were published on the 20 January 2022. Following a 12-week consultation and subsequent review of the 400 plus responses, the final set of recommendations were published on the 8 December 2022. Work continues on the delivery plan with the intention that this will be published in 2023.

Furthermore, to enable a managed transition to an inclusive net zero carbon economy road infrastructure, the Scottish Government committed in the 20% car kilometre reduction route map to commission research exploring a range of equitable options for demand management to discourage car use, including pricing. The research, which we will publish in the coming months, will allow the Scottish Government to build the evidence base on demand management options and inform our position on the wider reform of reserved motoring taxes. We will continue to press the UK Government for urgent dialogue on its plans for structural reform of motoring taxation, ensuring all areas of the UK are represented – particularly for Scotland's island and rural communities. The UK Government's own Net Zero Review highlighted that revenues from existing motoring taxes will decline sharply this decade, but it has so far failed to set out how it will address this. The UK needs a comprehensive approach to vehicle and road taxation that offers practical solutions to achieving our climate change ambitions.

Finally, 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. Investment Decision Making (IDM) is being considered as part of the ongoing work on the STPR2 Delivery Plan. The intention is that an IDM Guidance Update will follow thereafter.

Regulation

Recommendations under this theme include that Scottish and UK governments should work together in the development of an appropriately devolved regulatory and pricing framework that enables energy and telecoms infrastructure investment to be planned and delivered to meet the future needs of Scotland. Scottish Government are to consider options for longer term implementation and regulatory coherence across water provision and flood management and resilience.

We continue to work with the UK Government and Ofcom on an underpinning framework in telecoms that is responsive to Scottish needs and to ensure any barriers to telecoms deployment in Scotland are understood and acted upon.

Where powers are available, the Scottish Government have taken action to facilitate improved investment in digital infrastructure - such as through 100% non-domestic rates relief for laid and lit fibre - now extended to 2034 and continuing to offer the most extended period of rates relief in the UK. Further, policy development work is in train in 2023 to support a multi-agency agency collaborative approach to surface water management and drive forward the use of strategic scale blue green infrastructure.

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. Work on the Water Resilient Places Policy Framework and the Flood Resilience Strategy continues to increase the collaboration between water industry, local authorities and other relevant stakeholders. The recommendations of the Water Resilient Places Policy Framework are being considered with a view to making legislative proposals for drainage and surface water management. The 2022-2023 Programme for Government requirement to consult on the flood resilience strategy for Scotland is being progressed. Close collaboration between the two workstreams continues.

Digital and Technology

Recommendations under this theme include the delivery of a full fibre network and to enable the transition to 5G across the whole of Scotland. The Scottish Government are to increase Scotland's international presence and connectivity resilience. Furthermore, the Scottish Government are 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.

The ICfS recommended the Scottish Government provide leadership to ensure the delivery of a full-fibre network by 2027 to enable the transition to 5G. Our Reaching 100% (R100) Programme, which is over £600 million investment in digital infrastructure, continues to deliver at pace across Scotland. In 2022-23 we extended the investment and reach of the programme that will enable us to deliver to more premises in some of the most rural parts of Scotland.

The vast majority of R100 contract build will be full fibre, capable of delivering download speeds of 1,000 megabits per second (Mbps) – over 30 times faster than our superfast commitment of 30 Mbps. Full fibre is the most future-proofed broadband technology available so this outcome will put rural Scotland ahead of the curve, even compared to many urban areas. The programme delivered on time to lay 16 subsea fibre optic cables by the end of 2022. These cables will enhance Scotland's digital infrastructure resilience and connect 15 Scottish islands.

Furthermore, ICfS recommended that to ensure Scotland's place in the world and increase its international presence and connectivity resilience, the Scottish Government should prioritise support for an indigenous data centre market and investment in direct international fibre optic cables. Since the Green Datacentres and Digital Connectivity Vision and Action Plan was published, Scottish Enterprise (SE) has undergone a review of its approach to cluster building and strengthening – their main recommendation being to focus on outcome based procurement and not core funding of Cluster Management Organisations (CMOs).

The focus of attention is now on commencing ecosystem and supply chain strengthening activity to support the Scottish datacentre industry rather than setting up a specific and separate organisation. SE has allocated a Project Manager and Senior Responsible Owner to this activity and it is expected the internal SE approval process will be complete by June 2023, with ecosystem strengthening activity commencing in July 2023. As part of the Vision and Action Plan we are currently engaging with Network Rail Telecom (NRT), Transport Scotland and Scottish Water to explore opportunities to exploit existing infrastructure owned and operated by the various agencies.

The Scottish Government are currently refreshing the Datacentre site selection reports which have identified suitable sites spanning the country which are located close sources of renewable power generation and serviced by appropriate levels of fibre connectivity. These reports will be actively promoted to industry, both nationally and internationally, upon completion in summer 2023. These reports are a step-change over previous iterations with increased transparency over the scoring criteria used and how they are applied.

Lastly, the ICfS was 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. A Data Standards and Open Data Community of Practice has been established to collaborate and drive the adoption of standards. We are incorporating our Standards and Data Maturity offers into the Scottish Government's Digital Program, along with other measures to ensure these offers extend into major new data infrastructure projects.

The role of the public

Recommendations under this theme include the development of an informed approach to public engagement and participation, to ensure that short- and long-term outcome trade-offs are effectively debated, understood and taken into consideration.

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, the Scottish Government has committed to build on previous engagement and best practice to develop a multi-stakeholder approach to the next Infrastructure Investment Plan. We continue to work, in conjunction with colleagues at the Scottish Future's Trust, to develop a comprehensive multi-stakeholder engagement approach. We are engaging internally to understand best practice and are active participants in the Scottish Government Open Government Working Group, to help embed best practice into our thinking.

Phase 2 Recommendations

Prioritisation and Decision Making

Recommendations under this theme include prioritising an inclusive net zero carbon economy in infrastructure decision making by ensuring implementation of phase 1 recommendations, and the introduction of a prioritisation approach that incorporates and balances spatial and sector needs, assesses affordability and budget allocation of infrastructure funding.

As outlined above, Scottish Government continue to implement and report updates on these phase 1 recommendations.

Systems and Behaviours

Recommendations under this theme include a need to implement the use of the Place Principle; establish a cross-portfolio approach, which vertically aligns national, regional and local needs; implement the "one public sector" approach, to co-produce and co-deliver on spatial plans; to co-ordinate national upfront utility investment via changes to guidance, legislation or regulations.

ICfS recommended that Scottish Government should enshrine the use of the Place Principle within planning practice, through guidance, legislation or regulation as appropriate. As stated, NPF4 was established in February 2023 and is now part of the statutory development plan and directly influences planning decisions across Scotland. NPF4 embeds the Place Principle within planning and states that Local Development Plans should be place based and created in line with it and put at the heart of our local living and 20-minute neighbourhood policy.

Additionally, ICfS were keen for Scottish Government to build on Phase 1 needs-based recommendations, in the development of National Planning Framework 4, and should establish a cross-portfolio, and robust evidence-based, land use appraisal and prioritisation approach by end of 2021, which vertically aligns national, regional and local needs. This will involve co-produced industrial, settlement (including housing) and labour & skill strategies for each spatial level, which will manage the difficult trade-offs and maximise the potential of an inclusive net zero carbon Scotland. NPF4 was adopted on 13 February 2023. We will shortly be establishing a new cross-cutting external advisory group focusing on the relationships between planning, infrastructure and place (PIPAG). Research was undertaken on planning obligations and has now been published.^[4]

Furthermore, ICfS recommended that the "one public sector" outcome-based approach should be developed for our places by the end of 2021. This would build on changes within the Planning Scotland Act (2019), establishing a clear duty to co-produce and co-deliver existing and proposed spatial plans and includes the necessary shared accountability measures. How this effectively compliments and learns from Community Planning Partnerships, Local Area Improvement Plans, Locality Plans and Local Place Plans should be reviewed, to make as efficient and streamlined as possible, while ensuring collaboration becomes a required practice.

The Planning (Scotland) Act 2019 (Commencement No, 12 and Saving and Transitional Provisions) Regulations 2023 have been laid in the Scottish Parliament, coming into force in May 2023.^[5] This includes activating legislation requiring local place plans to be taken into account in the preparation of local development plans.

Enabling Digital Technology

Recommendations under this theme include to establish a digital data system to support the efficient and innovative development and use of data for the infrastructure sector; and to develop a centrally held data resource that will meet the needs for an inclusive net zero carbon economy.

There were recommendations for Scottish Government to establish a digital data co-ordination, standards and facilitation role, by the end of 2021, to support the efficient and innovative development and use of data for the infrastructure sector. Rather than taking this role into Scottish Government, we have put in place a number of initiatives that together meet these needs, including the establishment of Research Data Scotland (RDS) in late 2021. RDS will provide a new way of organising data for research and making it discoverable and ensure access to this, whilst maintaining public confidence in appropriate use of that data and making access quicker by providing a clear service for researchers who want to access data. RDS is also transforming how public sector data in Scotland is curated, accessed and explored, so it can deliver its full potential for policymakers. RDS can harness wider resources than Scottish Government alone and secure the momentum for a wider partnership between public sector and academia, building on and developing further existing data infrastructure, and Scotland's reputation for how we manage and use data and trustworthiness in what we do.

Furthermore, ICfS were keen for a centrally held data resource to be developed by the end of 2021, 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 Data Strategy for planning commenced in December 2022 and will complete in spring 2023. The strategy will provide a full analysis of the current data landscape for planning and building standards related data along with a delivery roadmap to implement data standards and governance.

Resources

The ICfS recommended Scottish Government, in partnership with the private sector, third sector and communities, by the end of 2021, should further develop and harness the essential skills to develop and improve our places. This should include establishing and directly supporting an appropriately experienced and co-ordinated skill resource for the prioritisation, planning and delivery of infrastructure, which is available to all local authority stakeholders, across spatial levels. We continue to work with Partners in Planning to take forward the actions from the Research into Skills in Planning. Later this spring we will publish a consultation on statutory elected member training in planning.

Delivering a Thriving Construction Sector

Recommendations under this theme include to develop, resource and implement a "Construction Accord" between all Scottish public bodies and the whole of the construction sector. This should include measures that improve the capacity, capability and diversity of the workforce and ensure those working in the construction sector are employed under the principles and conditions of Fair Work.

ICfS recommended that by building on its work to date, the Scottish Government and Construction Scotland Leadership Group should, by Quarter 1 2021, jointly lead, develop, resource and implement a "Construction Accord" between all Scottish public bodies and the whole of the construction sector. Its purpose is to set out an inclusive, shared vision for, and commitment to create, the market interface conditions to support a high performing construction sector for the benefit of all Scotland, that contributes to the achievement of an inclusive net-zero carbon economy and underpins the delivery of the National Infrastructure Mission. The Construction Accord was launched in October 2022 and encompasses commitments to all of the measures in the recommendation. More information can be found on the Construction Leadership Forum website. Work is now underway to co design a Transformation Plan with the sector to deliver on those commitments by June 2023.

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.