A National Mission with Local Impact - draft infrastructure investment plan 2021‑2022 to 2025‑2026: consultation

Chapter 2 - Responding to Covid-19 And Long-Term Trends

The COVID-19 pandemic has had a profound impact on our whole way of life. A clear priority is to reduce the economic, health, and social harm that the virus has brought. Infrastructure can help businesses and communities rebound.

The pandemic is a public health crisis, with unprecedented global economic consequences. Whilst we are starting to see gradual and cautious signs for optimism across the economy, Scottish GDP fell by 19.4% in the second quarter of 2020 – this has been a dramatic shock to our economy.

Over the period of the crisis to June 2020, business turnover in Scotland continued to decrease in almost all sectors as a result of lockdown. That has particularly our hit construction, tourism and hospitality, food, arts, entertainment and recreation sectors. Even where sectors have continued to trade, turnover is down, resulting in precarious cash flows. Consumer demand, how we travel, where we work, purchasing habits, and decision-making will have, perhaps, changed forever. Effects are particularly stark in retail and aviation, for example. How we invest in infrastructure can help our recovery.

COVID-19 has had a dramatic impact on all of our communities and people, but particularly those who were most at risk to start with. Our rural and island communities have faced a particular challenge, especially as a result of lockdown and the disruption to tourism and hospitality. Concerns around digital exclusion have become even more acute, and the crisis has shone a light on the increased need for different systems to exchange and make use of information. Coupled with the withdrawal from the EU, we are aware that the recession caused by COVID-19 has the potential to reduce the economic participation and wellbeing of the most disadvantaged in our society.

Alongside the harmful consequences, we have seen a number of positive shifts, for example, growth in community support, reduced commuting and increased cycling, more flexible working arrangements and making more use of digital services. We now have a unique opportunity, not simply to go back to how things were, but to harness the scale and pace of such changes to drive positive outcomes and ensure our investment plans are founded in fairness and dignity, safeguarding equality.

We will build back better by focusing on the following shifts in our capital investment, to seek to address the economic, health and social impacts of COVID-19:

• Investing in digital connectivity to help businesses and users wherever they live and work, and accelerating digital service provision, reducing the need to travel
• Supporting safe active travel and local, accessible public services in vibrant places
• Supporting green and blue spaces to provide access to nature
• Supporting positive social change such as new approaches to rehabilitation, and reduced homelessness
• Whilst not all is infrastructure, we will invest in job-creation to preserve and generate employment to support economic recovery

Long-Term Trend

Infrastructure, once built, lasts for many years. As such, it is important to try to project ahead to consider likely future community needs and how the places we live in and the way we live might change. Before the pandemic, Scottish Government had considered three key long-term trends which impact the provision of infrastructure:

• Climate change
• Technological developments
• Demographic change

Climate Change

The UK Climate Projections (UKCP18)^[10] illustrate a range of future climate scenarios for Scotland until 2100, suggesting that:

• Rainfall is projected to become more seasonal, with an increase in average winter and autumn rainfall (as illustrated in the figure below). Average summer rainfall may decrease.
• Average temperatures will increase in all seasons, with the greatest increase in summer.
• Winter storms with extreme rainfall may become more frequent.
• Sea levels will rise.

Figure shows projected changes, relative to the 1981-2000 average, in Scottish winter rainfall under high and low global emissions scenarios. The shaded envelopes represent the uncertainty ranges for each scenario.

These changes will lead to a range of impacts, including:

Increased risk of flooding and disruptive storms: With climate change likely to alter rainfall patterns and bring more heavy downpours, we can expect flood risk to increase in the future, impacting on transport and energy networks and properties.

Change at our coast: With sea level rise set to accelerate, we can expect to see more coastal flooding, erosion and coastline retreat, with consequences for our coastal communities and supporting infrastructure.

Availability and quality of water: As our climate warms and rainfall patterns change, there may be increased competition for water between households, agriculture, industry and the needs of the natural environment.

An increase in the frequency and intensity of weather events is likely to impact infrastructure planning and operation. For example, our energy, transport, water, and ICT networks may face disruptive flooding, landslides, drought and heatwaves. Generating some types of renewable energy is weather-dependent. Climate also impacts on raw water quality which necessitates different and higher levels of treatment to meet drinking water quality standard. We need to adapt current infrastructure and design future assets to be more resilient to the effects of climate change.

Technological Change

While technological change has been continuous over time, the size, speed and scope of technological change in recent years is unprecedented. The main trends we are seeing, related to infrastructure, are:^[11]

• Digitisation of services, systems and solutions and a clear trend towards automation
• Significantly more data creation, requiring common standards and increased cyber security
• A need for greater resilience and scale through cloud hosting
• Decentralised models of utility provision (eg energy) and services (tele-health)

This trend toward decentralisation, underpinned by digital services, has been accelerated in response to the COVID-19 crisis, where digital applications have proved their worth – for example, digitisation of some court procedures, greater use of video consultation in primary care, and online learning and teaching in schools and tertiary education. Many businesses have also made greater use of technologies or shifted to digital modes of provision.

Demographic changes

Scotland’s population has increased in past years, and is projected to continue to rise. The largest medium-term trends relate to the significant increase in our older population, and changes in where and in what household size people choose to live.^[12]

• All Councils will see an increase in pensioners with implications for services such as health, or the nature of housing required
• The biggest change is a 71% increase in the number of people aged over 75 in the next 25 years.
• There is a trend of predominantly older households in the West and South West areas.
• Migration has been the main driver of population growth, and all the projected future increase is projected to come from migration (both overseas and rest of the UK).
• Numbers of working age population and children are reducing in the West, South West and Islands, and increasing in the East and North East.
• Cities experience most population growth through overseas in-migration, whilst seeing outward migration of Scots to surrounding areas.
• Single adult households are increasing at a much faster rather than all others.
• Dedicated university accommodation has reduced housing pressure in cities.

Source: National Records of Scotland, Population Projections (2018-based)

Shifting our approach in response

Our approach to infrastructure is shaped by an understanding of the challenges and opportunities these trends bring:

Climate

• Adapting to climate change as well as Mitigating emissions

Technology

• Enhanced digital infrastructure and storage
• Increased support for data sharing
• Promote digital inclusion

Demography

• Meeting the needs of older people
• Services and homes where people choose to live
• Regenerating areas of working-age population decline