Scotland's Budget: Draft Budget 2017-2018

Chapter 11 Rural Economy and Connectivity

PORTFOLIO RESPONSIBILITIES

Rural Economy and Connectivity is a diverse portfolio that has responsibility for developing rural Scotland and wider connectivity (physical and digital) through working with the public, private and third sectors and with local communities. It includes the Scottish Government lead on agriculture, rural development, food and drink, fisheries grants, forestry, digital connectivity and transport.

Our overarching aim is to grow the rural economy and support wider connectivity through an integrated approach to inclusive economic growth. We will do this by:

• delivering a reformed Common Agricultural Policy;
• creating a positive environment for rural businesses and industries;
• building up our world-class food, drink and forestry sectors;
• building growth within our marine and coastal communities through investment in and support of our fisheries and aquaculture industries;
• supporting community empowerment;
• improving digital connectivity, particularly to remote and rural areas; and
• improving physical connectivity and economic productivity through the maintenance and improvement of Scotland's key transport infrastructure.

OUR PRIORITIES

Farming, Food and Drink

We will promote the work of our farmers and crofters in producing high quality food and assisting them in their quest for greater efficiency and levels of sustainability.

We will continue to deliver the reformed Common Agriculture Policy ( CAP) to obtain the best results for Scotland's rural economy, environment and communities.

Rural Services

We will continue to provide support for the food and drink sectors to help sustain the substantial increase in economic activity in those sectors in recent years and provide impetus to Scotland's journey to becoming a Good Food Nation.

Fisheries and Aquaculture

We will continue to build growth across Scotland's marine and coastal communities, supporting employment and securing investment, by delivering sustainable economic growth in the sea fisheries and aquaculture sectors, with due regard to the environment; and maximise the support provided by the European Maritime and Fisheries Fund ( EMFF) to realise sustainable growth opportunities for industry.

We will deliver social and economic benefits to rural communities through continued sustainable fisheries management and protection of fishing opportunities for both inshore and offshore fisheries.

Forestry

Forestry contributes almost £1 billion per year to the Scottish economy and supports more than 25,000 full-time equivalent jobs. Our Programme for Government includes ambitious plans to increase the contribution of forestry to the rural economy, as well as contributing to climate change mitigation and delivery of other social and environmental benefits. Continuing investment and economic growth from the sector depends on confidence in the future availability of timber. We are bringing forward plans to stimulate increased rates of new woodland creation, and the long-term sustainable production of home-grown timber, whilst continuing to support community engagement and ownership and the use of forests for recreation and access.

Digital Connectivity

The Scottish Government has set out ambitious plans to extend access to high quality digital connectivity, supported by a refreshed Digital Strategy. We are committed to building on the success of our existing broadband investment programme, which will deliver fibre access to at least 95 per cent of premises by the end of 2017. We have set a new commitment to extend coverage even further, to ensure that all premises in Scotland are able to access superfast broadband by 2021. We will launch new procurement activity during 2017, to deliver new public investment to achieve this objective.

In parallel, we are working with mobile operators to develop a programme to address 4G coverage gaps. We agreed an action plan with the four UK operators which commits us to developing 'infill' options. These will build on successful pilots, such as the Scottish Goverment-funded project that brought 4G services to Coll. This is a key element of our World Class Digital Infrastructure programme, which is being developed in partnership with Scottish Futures Trust. Other areas of focus include supporting the development of new technologies to help extend connectivity into rural areas, and to establish Scotland as a leading nation for innovation. This includes TV 'White Space' technology and networks to support the emerging 'Internet of Things'.

Highlands and Islands Enterprise

Highlands and Islands Enterprise ( HIE) is our main economic development body operating in the Highlands and Islands, in some of the most remote and fragile areas of Scotland. Recent decades have seen significant change in a number of areas. However, challenges remain in some parts of the Highlands and Islands.

We will continue to invest in our economic and social infrastructure, supporting jobs, businesses and communities including improving connectivity. The budget supports HIE, to develop growth sectors, improve competitiveness, productivity and support fair work, attract new investment and work with the financial sector to improve access to finance.

The budget funds HIE, to provide practical support and opportunities for businesses and communities to grow and invest in the region and financial assistance provided through various funding mechanisms. HIE will develop the economy in the Highlands in partnership with businesses and communities, increase participation in the labour market and move people out of poverty through work which is fairly paid. It also supports community engagement across the Highlands and Islands particularly in the most fragile areas.

Transport

Transport infrastructure is a key area where improving connectivity between our cities, rural communities and centres of economic activity is vital to boosting productivity and competitiveness.

Our commitment to Scotland's transport infrastructure is clearly visible in the construction of the £1.35 billion Forth Replacement Crossing Project, scheduled to open to traffic in May 2017 - the most significant transport project in a generation.

We will continue our significant investment in Scotland's railways to support a safe and high-performing railway through the delivery of new and better services, new and refurbished trains, and substantial improvements to the infrastructure to increase capacity and reliability. Electrification between Glasgow Queen Street and Edinburgh Waverley will be completed with new electric services due to start from July 2017.

Significant investment will continue to be made into the M8/M73/M74 Motorway Improvements and the Aberdeen Western Peripheral Route/Balmedie to Tipperty projects which are scheduled to open to traffic during spring and winter 2017-18.

The first section of the A9 Dualling programme between Kincraig and Dalraddy is also scheduled to be completed by Summer 2017. In addition, procurement is underway on the A737 Dalry Bypass with work anticipated to commence on this project before the end of financial year 2017-18.

In addition, we will invest in the maintenance and operation of Scotland's trunk roads and motorways to ensure that the safety and serviceability of the network is maintained and best value achieved.

Significant investment will also be made to support ferry services, with two new major vessels being built on the Clyde and earmarked for initial deployment on routes serving Arran and the Western Isles.

We will continue to work with Scotland's airports to support their ambitions to grow. In partnership with VisitScotland and Scottish Enterprise we will continue to pursue new opportunities to improve Scotland's connections with cities around the world that are important to Scottish business or support inbound tourism. We are continuing to support Highlands and Islands air travel through the air discount scheme which offers a 50 per cent discount on core air fares.

Flourishing islands are important and make a significant contribution to Scotland. Our contribution through support for air and ferry services will help support plans for more autonomy for our island communities.

We will empower our island communities further, following a public consultation on an Islands Bill, to provide more power, equality and protection for the islands to allow them to build a more prosperous and fairer future for their communities.

We are working with disabled people's organisations and transport providers to develop, monitor and report on actions derived from our Accessible Travel Framework. This will act as the catalyst for involving disabled people in all aspects of improvement to travel.

We will continue to provide financial support for bus services and those who use them as well as incentives for the take up of greener vehicles through Bus Service Operators Grant and the national concessionary travel schemes. We will also continue to work with bus operators, local transport authorities and organisations representing bus users to improve the functioning of bus services, promote better engagement between operators and authorities, secure the adoption of smart and integrated ticketing across operators and modes on a Scotland-wide basis, develop options to safeguard the longer-term sustainability of national concessionary travel schemes and prepare to implement new concessions for young modern apprentices and job grant recipients.

As part of our efforts to meet our climate change targets, we will continue to support efforts to reduce the carbon emissions from the transport sector. We will review the policies that the funding supports to assess their impact. We will support the European Regional Development Fund ( ERDF) interventions on sustainable transport over the period up to 2020 which would yield match funding of up to £32.5 million. We will also offer further loan support for low carbon vehicles from financial transaction funding.

Table 11.01: Spending Plans (Level 2)

Level 2	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
EU Support and Related Services	178.8	175.3	177.6
Rural Services	36.2	40.5	42.4
Fisheries and Aquaculture Grants	7.4	7.4	6.4
Forestry Commission	61.3	61.1	61.3
Digital Connectivity	116.0	116.8	136.0
Highlands and Island Enterprise	67.5	74.5	67.0
Air Services	60.3	60.3	59.3
Concessionary Fares & Bus Services	261.3	261.3	254.4
Ferry Services	198.6	198.6	181.0
Motorways & Trunk Roads	820.3	820.6	967.0
Other Transport Policy, Projects and Agency Administration	117.7	117.8	138.4
Rail Services	751.3	751.3	775.8
Total Level 2	2,676.7	2,685.5	2,866.6
of which:
DEL Resource	1,382.0	1,387.3	1,458.8
DEL Capital	1,282.7	1,286.2	1,397.8
DEL Financial Transactions	12.0	12.0	10.0
AME	-	-	-
Central Government Grants to Local Authorities	21.9	21.9	27.5

Table 11.02: Spending Plans (Level 2 Real Terms) at 2016-17 Prices

Level 2	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
EU Support and Related Services	178.8	175.3	175.1
Rural Services	36.2	40.5	41.8
Fisheries and Aquaculture Grants	7.4	7.4	6.3
Forestry Commission	61.3	61.1	60.4
Digital Connectivity	116.0	116.8	134.1
Highlands and Island Enterprise	67.5	74.5	66.0
Air Services	60.3	60.3	58.5
Concessionary Fares & Bus Services	261.3	261.3	250.8
Ferry Services	198.6	198.6	178.4
Motorways & Trunk Roads	820.3	820.6	953.2
Other Transport Policy, Projects and Agency Administration	117.7	117.8	136.4
Rail Services	751.3	751.3	764.7
Total Level 2	2,676.7	2,685.5	2,825.6
of which:
DEL Resource	1,382.0	1,387.3	1,437.9
DEL Capital	1,282.7	1,286.2	1,377.8
DEL Financial Transactions	12.0	12.0	9.9
AME	-	-	-
Central Government Grants to Local Authorities	21.9	21.9	27.1

EU Support and Related Services

Table 11.03: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Pillar 1 - Basic Payments	262.0	262.0	262.0
Pillar 1- Greening payments	131.5	131.5	131.5
Other Pillar 1 payments	44.5	44.5	44.5
Business Development	31.2	26.2	30.2
Less Favoured Area Support Scheme	65.0	65.5	65.5
Agri Environmental Measures	46.8	48.3	55.1
Forestry	1.6	1.6	1.4
Rural Enterprise	0.1	0.1	-
Rural Communities	0.1	0.1	-
Leader	4.5	4.5	10.1
Technical Assistance	5.0	5.0	0.7
Broadband	3.6	3.6	6.4
Crofting Assistance	0.3	0.3	0.3
Payments and Inspections Admin	55.6	55.6	62.9
CAP Compliance Improvements	26.2	26.2	42.2
Less EU Income	(499.2)	(499.7)	(535.2)
Total	178.8	175.3	177.6
of which:
DEL Resource	137.5	139.0	121.7
DEL Capital	36.3	36.3	50.9
DEL Financial Transactions	5.0	-	5.0
AME	-	-	-

What the budget does

The EU support and related services budget supports and protects primary productivity in the agricultural and wider rural sector through the delivery of EU funding (European Agricultural Guarantee Fund) under direct support measures. The Scottish Rural Development Programme ( SRDP) provides for National and EU funding (European Agriculture Fund for Rural Development) to support measures which deliver economic, environmental and community benefit for rural Scotland.

The delivery is underpinned by the provision of regulatory inspection functions, scientific and technical advice, monitoring and evaluation as well as new improved business processes and associated IT functionality.

In 2017-18 we will:

• operate the Common Agricultural Policy ( CAP) efficiently and effectively, continuing to invest in the development of new IT and improved business processes to improve customer experience and realise significant operational efficiencies;
• provide customers and staff with clear information, guidance and training on the implementation of schemes and rules under CAP;
• continue to improve the quality of SRDP implementation and the fostering of innovation and co-operation; and
• continue to work closely with partner organisations and the public on broader rural development policy issues, e.g. Scottish Rural Parliament and to inform the public on funding opportunities under SRDP.

Rural Services

Table 11.04: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Crofting Commission	2.6	2.5	2.5
Rural Cohesion	1.6	1.2	1.0
Agricultural and Horticultural Advice and Support	3.6	9.9	9.5
Veterinary Surveillance	5.2	5.2	5.2
Animal Health	18.2	18.2	18.2
Food Industry Support	5.0	3.5	6.0
Total	36.2	40.5	42.4
of which:
DEL Resource	35.4	35.5	40.8
DEL Capital	0.8	-	1.6
DEL Financial Transactions	-	5.0	-
AME	-	-	-

What the budget does

The rural services budget directly supports sustainable rural development through funding measures which deliver economic, environmental and community benefit for rural Scotland, providing direct support to farming, forestry, crofting and rural development projects. It also supports the strong economic growth of the food and drink industry and the empowerment of rural communities. It also contributes to the delivery of our climate change ambitions of reducing greenhouse gas emissions.

In 2017-18 we will:

• continue to support the Scottish Rural Parliament process as part of wider work to build social and economic capital in rural Scotland;
• monitor for the presence of plant and animal disease, prevent, control or eradicate any outbreaks, and improve the welfare of kept animals; and
• implement the next phase of the national food and drink policy, helping Scotland become a Good Food Nation. This will involve supporting industry to meet its growth targets, local groups to celebrate food from their local area, public caterers to serve fresh, healthy produce and schools and others to help our children understand more about the food they eat.

Fisheries and Aquaculture Grants

Table 11.05: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Fisheries Grants	15.2	15.2	14.2
Fisheries Harbour Grants	0.4	0.4	0.4
Less Retained Income/Capital receipts	(8.2)	(8.2)	(8.2)
Total	7.4	7.4	6.4
of which:
DEL Resource	2.0	2.0	2.0
DEL Capital	5.4	5.4	4.4
AME	-	-	-

What the budget does

The Fisheries and Aquaculture budget supports the sustainable use of the marine environment by providing the domestic funding contribution towards the European Maritime and Fisheries Fund. The budget also provides funding towards harbour repairs caused by storm damage.

In 2017-18 we will:

• continue to support the fisheries, aquaculture and fish processing sectors by maximising the benefits of the new European Maritime and Fisheries Fund to create and safeguard jobs in remote rural areas;
• through the European maritime and Fisheries Fund, continue to develop and sustain markets for premium Scottish seafood products; and
• continue to offer harbours funding towards repairs caused by storm damage.

Forestry Commission

Table 11.06: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Programme Costs	18.5	18.5	16.0
Subsidy to Forest Enterprise	21.7	21.7	20.7
Depreciation	0.1	0.1	0.1
Policy Regulation & Administration	4.8	4.6	4.3
Woodland Grants	36.0	36.0	40.0
EC Receipts	(19.8)	(19.8)	(19.8)
Total	61.3	61.1	61.3
of which:
DEL Resource	59.7	59.5	59.7
DEL Capital	1.6	1.6	1.6
AME	-	-	-
Financial Transactions	-	-	-

What the budget does

Forestry Commission Scotland works to increase the contribution of Scotland's forests to the economy, people's health and wellbeing and the environment. The budget also supports the sustainable management of the Scottish Ministers' National Forest Estate by Forest Enterprise Scotland.

Forestry contributes almost £1 billion per year to the Scottish economy and supports more than 25,000 full-time equivalent jobs. Supporting the contribution of forestry to the economy will continue to be a major focus, with the new woodland creation programme also contributing to the Government's carbon emission reduction targets.

In 2017-18 we will:

• manage the National Forest Estate to deliver economic, social and environmental benefits through programmes to produce timber, empower communities and stimulate rural development;
• support and regulate sustainable forest and woodland management across Scotland, working with others to stimulate planting for multiple benefits, and encouraging investment in the sector by building confidence about future timber supplies;
• continue to support the Strategic Timber Transport Scheme to unlock the economic potential of our forests by facilitating the sustainable transport of timber in rural areas of Scotland and delivering benefits for local communities and the environment;
• bring forward woodland creation schemes on the National Forest Estate, including on vacant and derelict land; and
• continue to provide benefits from Woods In and Around Towns ( WIAT) including from the award-winning 'Branching Out' project which offers a wide range of woodland activities for people experiencing mental health problems in central Scotland.

Digital Connectivity

Table 11.07: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Digital Strategy Capital	92.2	96.4	112.1
Digital Strategy	23.8	20.4	23.9
Total	116.0	116.8	136.0
of which: DEL Resource23.820.423.9
DEL Capital	92.2	96.4	112.1
AME	-	-	-

What the budget does

This budget supports the delivery of Scotland's refreshed digital strategy, which will be published in early 2017. As well as activity to extend digital connectivity, the strategy will set out action to support the development of digital skills, boosting the wider digital economy, get more public services online, encourage digital participation and improve cyber resilience.

In 2017-18 we will:

• deliver the final phase of the Digital Scotland Superfast Broadband ( DSSB) programme, which will extend fibre broadband access to at least 95 per cent of premises across Scotland;
• launch the first phase of our Reaching 100 per cent programme, which over time will deliver our commitment to extend superfast broadband access to all of Scotland by 2021; and
• deliver the initial stages of a programme, developed and delivered in conjunction with industry, to address gaps in 4G mobile coverage.

Highlands and Islands Enterprise

Table 11.08: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Highland and Islands Enterprise	67.5	74.5	67.0
Total	67.5	74.5	67.0
of which:
DEL Resource	41.3	48.3	40.8
DEL Capital	26.2	26.2	26.2
AME	-	-	-

What the budget does

This budget relates to Highlands and Islands Enterprise ( HIE). In 2017-18 we will take forward work in relation to Phase 2 of the Enterprise and Skills Review. Without pre-judging the outcome of this, our areas of focus continue and the resources will be used by HIE to provide similar support in the Highlands and Islands to that provided by Scottish Enterprise in other parts of Scotland, including supporting businesses expanding into new markets and developing growth sectors, including those where there are distinctive regional opportunities. In addition to its key role of supporting sustainable and inclusive economic growth in the Highlands and Islands area, HIE also plays an important role in strengthening local communities, particularly in some of Scotland's most fragile areas. This includes working with social enterprises to help shape and realise their growth aspirations.

Our enterprise agencies ( HIE and Scottish Enterprise) are key to ensuring Scotland creates more, better-paid jobs to boost the economy and remain a wealthy and productive country and will develop our economy in partnership with businesses and communities, increase participation in the labour market and move people out of poverty through work which is fairly paid.

In 2017-18 we will:

• continue to focus efforts on Innovation, Investment, Internationalisation and Inclusive Growth;
• continue to support growth sectors, growth companies and growth markets through our enterprise bodies and economic development networks; and
• continue to strengthen local communities, particularly in some of Scotland's most fragile areas.

Air Services

Table 11.09: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Highlands and Islands Airports Limited	39.0	39.0	35.1
Prestwick Airport	9.3	9.3	9.4
Support for Air Services	12.0	12.0	14.8
Total	60.3	60.3	59.3
of which:
DEL Resource	40.4	40.4	42.9
DEL Capital	19.9	19.9	16.4
AME	-	-	-

What the budget does

The budget supports Highlands and Islands Airports Limited ( HIAL) and Prestwick Airport. It includes resources for capital investment and sustains the operation and development of airport services throughout the country.

It also supports the Air Discount Scheme ( ADS) which provides discounted fares on eligible routes, the provision of lifeline Public Service Obligation ( PSO) air services which cannot be provided commercially and international route development.

In 2017-18 we will:

• ensure that HIAL has the necessary resources to maintain its 11 airports at current levels of operational ability;
• continue to fund the Air Discount Scheme and the lifeline PSO air services to Barra, Campbeltown and Tiree;
• continue to support the re-positioning of Prestwick Airport; and
• continue to support Route Development opportunities.

Through continuing to invest in these air services we will help to ensure that Scotland is a cohesive nation where all its people are able to access the services and amenities that they need and are connected to the opportunities provided by the global economy.

Concessionary Fares and Bus Services

Table 11.10: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Smartcard Programme	2.8	2.8	1.9
Concessionary Fares	207.8	207.8	198.3
Support for Bus Services	50.7	50.7	54.2
Total	261.3	261.3	254.4
of which:
DEL Resource	259.3	259.3	252.4
DEL Capital	2.0	2.0	2.0
AME	-	-	-

What the budget does

The budget provides support for bus services across Scotland, primarily through Bus Service Operators' Grant ( BSOG), and funds national concessionary travel schemes for older, disabled and young people and the smartcards used to access concessionary travel. BSOG is paid to bus operators based on mileage and helps keep fares lower and the network more extensive.

This budget also provides funding for a number of organisations working to improve public transport, including Bus Users Scotland and the Community Transport Association Scotland.

In 2017-18 we will:

• continue to support bus services and the use of greener, less-polluting vehicles while ensuring funding arrangements are efficient, effective and affordable;
• constrain payments under the concessionary travel scheme for older and disabled people as a result of a negotiated settlement with the bus sector and develop options in consultation with stakeholders to safeguard the scheme's longer-term sustainability;
• prepare to deliver free bus travel to young modern apprentices and three months' free bus travel to young recipients of the proposed new Job Grant;
• continue to make efficiency savings in the operation of the scheme and the validation of bus operator claims; and
• continue to ensure Scotland's electronic ticketing machine estate is maintained to the appropriate standard required to deliver concessionary travel and commercial smart ticketing.

Ferry Services

Table 11.11: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Support for Ferry Services	153.4	153.4	165.8
Vessels and Piers	45.2	45.2	15.2
Total	198.6	198.6	181.0
of which:
DEL Resource	153.4	153.4	165.8
DEL Capital	45.2	45.2	15.2
AME	-	-	-

What the budget does

The budget supports the Scottish Government's Ferries Plan, published in December 2012 and provides subsidy for the:

• Clyde and Hebrides Ferry Services ( CHFS) contract;
• Northern Isles Ferry Services contract; and
• Gourock-Dunoon Ferry Service contract.

It also provides for loans to Caledonian Maritime Assets Ltd ( CMAL) for the procurement of vessels used on the CHFS network and grants to ports - other than those owned by local authorities - for improvement works to piers and harbours that support lifeline ferry services.

In 2017-18 we will:

• maintain ferry services on the Clyde and Hebrides, Gourock to Dunoon and Northern Isles routes in line with the Ferries Plan;
• protect the Road Equivalent Tariff ( RET) to all routes in the Clyde and Hebrides, and take action to reduce fares on ferry services to Orkney and Shetland;
• continue to support construction of the two new 100m vessels; and
• progress the Brodick Harbour redevelopment project, due for completion in mid-2017.

Motorways and Trunk Roads

Table 11.12: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Structural Repairs	27.4	27.4	27.9
Network Strengthening	40.8	40.8	56.0
Private Finance Initiative ( PFI) Payments	98.0	98.0	141.6
Routine and Winter Maintenance	80.6	80.9	85.1
Other Current Expenditure	10.0	10.0	10.0
Roads Improvement	16.3	16.3	16.3
Capital Land and Works	285.5	285.5	425.6
Forth Replacement Crossing	134.1	134.1	77.0
Roads Depreciation	111.3	111.3	96.9
Forth and Tay Road Bridge Maintenance	16.3	16.3	30.6
Total	820.3	820.6	967.0
of which:
DEL Resource	306.7	307.0	340.4
DEL Capital	513.6	513.6	626.6
AME	-	-	-

What the budget does

In addition to major roads construction projects and other road improvements, the budget delivers routine, cyclical and winter maintenance to maintain the safety, environment and amenity of the trunk road network. It includes road safety improvement programmes, information for road travellers and an emergency response facility to deal with emergencies and incidents on the network. This investment supports the delivery of our three key strategic outcomes for transport - improved journey times, reduced emissions to tackle climate change and improve air quality and health, and improved accessibility and affordability.

In 2017-18 we will:

• continue construction of the Queensferry Crossing as programmed, scheduled to be open to traffic in May 2017;
• continue construction of the M8/M73/M74 Motorway Improvements project and the Aberdeen Western Peripheral Route ( AWPR)/Balmedie to Tipperty project;
• continue to progress construction of the A737 Dalry Bypass;
• continue to progress design and development work on dualling the A9 and A96, conclude construction of the A9 Kincraig to Dalraddy project and commence construction of the A9 Luncarty to Birnam project;
• commence procurement of the A90/A96 Haudagain Junction Improvements, A77 Maybole Bypass and improvements on the A9 at Berriedale Braes (subject to completion of statutory procedures); and
• continue to progress design and development work on a range of projects including improvements to the A82 between Tarbet and Inverarnan, the grade separation of Sheriffhall Roundabout on the A720 and also a new grade-separated junction at Laurencekirk on the A90.

Other Transport Policy, Projects and Agency Administration

Table 11.13: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Transport Information	1.2	1.2	1.2
Agency Administration Costs	17.8	17.8	17.4
Strategic Transport Projects Review	1.0	1.0	3.6
Support for Freight Industry	0.8	0.8	1.3
Scottish Canals	10.0	10.0	11.1
Support for Sustainable and Active Travel	35.9	36.0	33.9
Future Transport Fund	20.2	20.2	25.3
Travel Strategy and Innovation	25.3	25.3	40.1
Road Safety	3.0	3.0	3.0
Edinburgh Tram Inquiry	2.5	2.5	1.5
Total	117.7	117.8	138.4
of which:
DEL Resource	54.6	54.6	54.7
DEL Capital	56.1	56.2	78.7
DEL Financial Transactions	7.0	7.0	5.0
AME	-	-	-

What the budget does

The budget contributes to the delivery of our climate change ambitions as set out in the Climate Change Plan, reducing the impact of transport on our environment and health, and supporting a shift to more sustainable transport modes. It will facilitate provision of impartial travel information services, road safety, encourage the freight industry to reduce emissions and, through the Future Transport Fund, provide the infrastructure necessary to enable the uptake of low emission vehicles and other sustainable forms of transport.

The budget provides resources to begin the Strategic Transport Project Review 2, the purpose of which is to undertake an appropriate Scotland wide appraisal of strategic transport priorities in order to inform investment priorities over the next 20 years. A key feature will be an assessment of how it helps deliver the Government's Economic Strategy.

In 2017-18 we will:

• invest £35 million in the Glasgow Subway modernisation;
• invest in charging and refuelling infrastructure and other measures to accelerate adoption of ultra-low emission vehicles;
• continue to invest in a range of transport initiatives that will support a shift to more sustainable transport modes;
• Support the Scottish Disability Equality Forum to develop and host an accessible travel hub and engage with disabled people;
• continue to invest in infrastructure and behaviour change initiatives to encourage cycling and walking;
• continue to support maintenance and operation of Scottish Canals;
• continue to fund Traveline and other transport information provision and the running of Transport Scotland;
• promote measures to transfer freight from road;
• continue to support Regional Transport Partnerships and the Scottish Road Works Commissioner;
• undertake research, analysis and stakeholder engagement to inform strategic transport initiatives;
• continue to support Road Safety Scotland and the Edinburgh Tram Inquiry; and
• continue to provide loan funding to support the uptake of low emission vehicles.

Funding for active travel will total approximately £39 million. The investment in sustainable and active travel will help to reduce the local and global environmental impact of our consumption and production and will also help us to live longer and healthier lives.

Rail Services

Table 11.14: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Rail Franchise	265.9	265.9	310.7
Rail Infrastructure	463.3	463.3	426.5
Rail Development	2.0	2.0	3.0
Major Public Transport Projects	20.1	20.1	35.6
Total	751.3	751.3	775.8
of which:
DEL Resource	267.9	267.9	313.7
DEL Capital	483.4	483.4	462.1
AME	-	-	-

What the budget does

The budget supports the delivery of passenger rail services through the ScotRail and Caledonian Sleeper franchise contracts, including the ongoing procurement of new trains, and Network Rail's operation, maintenance and renewal of the rail infrastructure in Scotland as well as the delivery of major enhancement projects.

Rail infrastructure funding is split between a direct grant paid to Network Rail from the Scottish Government and track and station access charges that are payable via the ScotRail and Caledonian Sleeper operators to Network Rail and subsidised through rail franchise contracts. This split in funding is determined independently by the Office of Rail and Road ( ORR) and can vary significantly between financial years.

In 2017-18 we will:

• complete the electrification between Glasgow Queen Street and Edinburgh Waverley as part of EGIP and introduce full electric services;
• continue delivery of key improvements to the route between Aberdeen and Inverness, including the relocation of Forres Station, and on the Highland Main Line between Inverness and Perth;
• deliver a range of fare offers and other benefits to customers;
• continue the delivery of the rolling programme of electrification, including the Falkirk Grahamston, Stirling, Dunblane and Alloa, and Glasgow to Edinburgh via Shotts routes; and
• complete the redevelopment of Dundee Station, support the redevelopments planned for Aberdeen, Inverness and Stirling Stations, and continue to support the delivery of new stations at Robroytson and Kintore.

Central Government Grants to Local Authorities

Table 11.15: Detailed Spending Plans (Level 3)

Level 3	2016-17 Draft Budget £m	2016-17 Budget £m	2017-18 Draft Budget £m
Regional Transport Partnerships	16.0	16.0	20.1
Cycling, Walking and Safer Routes	5.9	5.9	7.4
Total	21.9	21.9	27.5
of which:
DEL Resource	-	-	-
DEL Capital	21.9	21.9	27.5
AME	-	-	-