Scotland's Future

Chapter 9 Culture, Communications and Digital

• Under independence, this Government will promote and support culture and heritage, both for their intrinsic value and for the benefits they contribute to Scotland
• Under our proposals, a Scottish Broadcasting Service, providing TV, radio and online services, will be established as a publicly funded public service broadcaster, working with the BBC in a joint venture
• On independence, the licence fee will be the same as in the rest of the UK, and all current licence fee payment exemptions and concessions will be retained
• Existing licences for broadcasters in Scotland will be fully honoured
• If this Government is re-elected in 2016, the Royal Mail will be brought back into public ownership in Scotland, with a commitment to existing service levels including the Universal Service Obligation
• In telecommunications policy, our approach will give greater priority to improving geographic coverage, particularly in remote rural areas
• Under our plans, the National Lottery will continue in Scotland, with Camelot retaining its licence as operator

Why we need a new approach

Scotland's strong and vibrant culture is one of our most enduring and powerful national assets. Our rich heritage gives Scotland its sense of place and underpins our understanding of our past, our present and our future. Scotland's creative communities - our artists, writers, poets, dancers, directors, musicians and designers - provide new insights and drive forward new ideas. They help us see ourselves in new ways and present Scotland in its many dimensions to the wider world.

Culture and heritage are already the responsibility of the Scottish Parliament, and this Scottish Government has focused on promoting Scotland's culture, creative industries and historic environment at home and internationally. For example, we have sought to protect these sectors from the level of cuts made in England by Westminster. This Government does not measure the worth of culture and heritage solely in money - we value culture and heritage precisely because they embody our heart and soul, and our essence.

Under independence, Scotland's cultural strengths will be extended to other areas currently reserved to Westminster, including broadcasting. The BBC is one of the few bodies explicitly reserved in the Scotland Act 1998. However, despite the professionalism of BBC Scotland staff and management, survey evidence suggests that Scottish viewers and listeners register - at less than 50 per cent - the lowest level of satisfaction with BBC services recorded anywhere in the UK^[339]. Evidence also suggests that people in Scotland want more Scottish programming alongside access to the best from the rest of the UK and the wider world^[340].

Broadcasting is a critical part of our creative industries, a key economic sector that is growing rapidly. In 2012, UK television exports are estimated to have grown by 4 per cent compared to the previous year, to £1.224 billion^[341]. It is an industry that provides skilled, well-paid employment with indirect benefits felt widely across our economy. The Scottish Government believes that much more can be achieved to boost the creative economy of Scotland.

Scotland currently stands far behind countries and regions of similar size in terms of the hours of original television production and employment by our national broadcaster. The Scottish Government has successfully pressed for increased production in Scotland: in particular, the share of BBC network production made in Scotland rose from 3 per cent in 2007 to 9 per cent in 2011, slipping slightly to 7.6 per cent in 2012. However, the money we contribute in licence fees should be doing more to service Scottish audiences, and to deliver jobs and opportunities here in Scotland for those involved in our creative sector and creative industries.

In 2011/12, BBC Scotland's total expenditure was just over £200 million on all of its activities, compared to a contribution to licence fee income of £320 million from Scotland. BBC spending in Scotland is likely to fall to around £175 million by 2016 through the ‛Delivering Quality First' programme.

The creation of BBC Alba in 2008, and its availability on digital television since 2011, marked a step change in Gaelic broadcasting. Its weekly audience figures of 637,000 demonstrate an appeal considerably beyond the Gaelic-speaking community, showing the benefit of the Scottish Government's investment in the service^[342].

In 2008, the Scottish Broadcasting Commission recommended the establishment of a Scottish Digital Network funded from licence fee resources. A greater level of Scottish public sector broadcasting would increase production in Scotland, reflect Scotland to itself, and increase plurality in publicly-funded public service broadcasting. The Westminster Government has not agreed to this proposal, and within the current constitutional settlement the Scottish Government has not been able to enhance Scottish public sector broadcasting.

Communications - telecommunications and mail services - are currently the responsibility of Westminster. As a result, the Westminster Government has gone ahead with plans to privatise the Royal Mail, despite the overwhelming opposition of Scotland's MPs and calls by the Scottish Government to postpone any sell-off until after the people of Scotland have had their say in next year's referendum. This Westminster decision poses a direct threat to postal services in Scotland.

We have also felt the impact of other decisions in communications policy that did not take account of Scotland's circumstances. When 3G mobile licences were auctioned in 2000, an initial coverage target of 80 per cent of the UK population was set. This was increased to 90 per cent of the UK population in December 2010. Despite the efforts of the Scottish Government, a distinct Scottish target was not set. Currently, 3G coverage in Scotland is the lowest of the four UK nations, reaching only 96 per cent on the most optimistic estimates. Furthermore, there is a disparity between urban and rural Scotland. Coverage in rural Scotland drops to as low as 92 per cent^[343], demonstrating that there will always be poorer coverage in rural areas unless these areas are given priority in allocating licences.

An independent Scottish Government would have been able to do more to deliver improved coverage for people across Scotland.

The opportunities available to Scotland

Scotland's beauty, historic attractions and hospitality are famed across the world, and Scotland's commitment to our culture and heritage enjoys international recognition, notably from the United Nations Educational, Scientific and Cultural Organization (UNESCO)^[344].

The inspiration and significance we draw from our culture and heritage, including Gaelic and Scots, are fundamental to shaping our communities and the places in which we live. Culture and heritage make our communities attractive places to live, work, invest and visit. They are powerful forces for both renewal and regeneration. Through their contribution to our social fabric, community cohesion and economic wellbeing, culture and the arts support better outcomes for healthier, safer and more resilient communities.

Scotland hosts more than 200 cultural festivals a year. The 2012 Global Culture Summit, held in Edinburgh and attended by 33 nations from across the world, demonstrated that Scotland can facilitate and shape international cultural dialogue. Scotland is home to five internationally celebrated World Heritage Sites. Sixty per cent of visitors to our best known attractions are from outside the UK. The Forth Bridge has been nominated as Scotland's sixth World Heritage Site, a tribute to Scotland's engineering and industrial legacy which is renowned around the world. Historic Scotland's "Scottish Ten" laser-scanning project^[345] is promoting present-day Scottish heritage and technology on an international stage.

In 2014 Scotland will welcome the world for the Commonwealth Games, the Ryder Cup and the second year of Homecoming Scotland. Staging these major events demonstrates that Scotland is an international cultural and sporting centre and promotes our world-class facilities and attractions.

Scotland's culture and heritage also make a valuable contribution to our economic and social wellbeing. For example, in 2011 creative industries generated £2.8 billion in gross value added for Scotland's economy^[346].

Our historic environment has been estimated to contribute £2.3 billion to our economy, supporting 60,000 jobs in the tourism and construction industries^[347].

Scotland's 360 museums and galleries attract approximately 25 million visitors a year and generate approximately £80 million for our economy whilst sustaining more than 4,400 jobs^[348]. A study of Edinburgh's festivals in 2011 showed that they contributed over a quarter of a billion pounds to Scotland's economy, supporting more than 5,000 jobs^[349].

An independent Scotland will enable culture and heritage to flourish as a driver in our continued development and as an aspect of our everyday lives. The expression, celebration and development of our traditional and distinct Scottish culture will be given further impetus with independence. These strengths will also provide an independent Scotland with unique selling points as we look to promote Scotland internationally.

The Scotland we can create

The present Scottish Government has produced an ambitious cultural programme. We know that public funding of the arts is a fundamental good, and independence will provide the opportunity to take this to new heights. And with independence our cultural and creative life will flourish.

Culture and heritage can enrich and empower our communities, transforming places and lives, through projects like Sistema Scotland^[350]. Our national collections - the National Galleries of Scotland, the National Museum of Scotland and the National Library of Scotland - provide access to the best of Scottish and international arts, culture, and history. We have also created the first ever overarching Historic Environment Strategy^[351] to ensure that the people of Scotland gain the full benefit from our rich historic environment. We are establishing a new lead body to work collaboratively with local government, the third sector and private interests to place our historic environment at the heart of a flourishing and sustainable Scotland.

Culture, heritage and creativity also contribute significantly to our engagement with the world. We have maintained funding for orchestras, the National Theatre of Scotland, Scottish Opera and Scottish Ballet, which all develop and showcase Scottish talent on a world stage. We support the outreach and educational work undertaken by our national companies and collections, and the development of our new National Conservation Centre which will revitalise and sustain traditional building skills.

We plan to create a secure future for Gaelic in Scotland by increasing the numbers learning, speaking and using Gaelic, through Gaelic education in all sectors and all stages such as early years, primary and secondary education. We will continue our support for the work of Bòrd na Gàidhlig in promoting the use of Gaelic in Scottish public, cultural and community life. In addition, we will maintain our support for MG ALBA, which has brought significant benefits for Gaelic.

Independence, bringing new powers over broadcasting, the economy and international representation, will provide a range of new opportunities. The process of becoming independent will in itself stimulate new creativity and energy in Scotland. We will have the eyes of the world upon us and there will be greater international interest in Scotland as we emerge as a state in our own right.

Culture and broadcasting

The choices open to us

In an independent Scotland we will build on our cultural ambitions for Scotland^[352]. Our approach has been, and will continue to be, distinct from that of Westminster in that we recognise the intrinsic value of culture and heritage in and of themselves. Our ambition is to build an independent nation where they can continue to flourish.

With independence Scotland will have new powers over the economy to encourage our culture and creative sectors. For example, with new powers over taxation, we can explore a VAT reduction on repairs and maintenance work.

An independent Scotland will enjoy increased opportunities to build our international reputation for culture, heritage and creativity. The development of a Scottish overseas diplomatic and trade network will provide Scotland with the opportunity to promote and share our culture and traditions with nations across the world. The winter festivals either side of Christmas - St Andrew's Day, Hogmanay and Burns Night - are already internationally recognised, celebrated by the Scottish diaspora, and provide ideal platforms to develop Scotland's public diplomacy abroad, whilst showcasing Scotland's customs and produce to new audiences.

Independence will directly affect broadcasting, which is currently reserved to Westminster. The BBC's current charter runs to 31 December 2016, after the planned date for independence in March 2016. Channel 3 and Channel 5 licences are being renewed to 2025. The Channel 4 licence is also likely to be renewed to 2025 in the near future. As part of the Channel 4 renewal process, the Scottish Government is pressing for increased production from Scotland more in line with our population share.

Scotland's cultural life and heritage take many different forms, as diverse as the land, peoples and places of our country. Already they are being stimulated by the prospect of independence. As a nation we have the unique opportunity to build a society that nurtures and is nourished by songs, poems, stories, drama, dance, paintings and sculpture, and that welcomes people from all over the world to come, to inspire and to be inspired, to innovate and to create.

Our priorities for action

This Government's immediate priority for broadcasting on independence will be to develop a broadcasting policy for Scotland based on three principles:

• there should be an increase in production opportunities for Scottish producers, and an increase in productions that reflect life in Scotland and of Scots
• Scottish viewers and listeners should continue to have access to all their current channels
• there should be no additional cost to viewers and listeners as a consequence of independence

Existing arrangements will therefore form the starting point for broadcasting services in Scotland. The licence fee payable in Scotland at the point of independence will be the same as the licence fee payable in the rest of the UK. All current licence fee payment exemptions and concessions, including those for people aged over 75 and for people who are sight-impaired, will be retained.

This Government will also respect existing charters and licences to broadcast when Scotland becomes independent.

We believe that Scotland's publicly-funded public service broadcaster should strengthen our democracy and foster cultural production and participation. It should be a trusted, reliable, impartial source of information. It should reflect the diversity of the nation and our world to the people of Scotland, and should seek opportunities to collaborate beyond our borders to pioneer innovation in entertainment, education and journalism.

To deliver on these ambitions under independence, we plan to create a new public service broadcaster, the Scottish Broadcasting Service (SBS). The new broadcaster will initially be founded on the staff and assets of BBC Scotland, and will broadcast on TV, radio and online.

The SBS will offer a wide range of programming and content on TV, radio and online. It will reflect the variety of our nation in terms of geography, ethnicity, language, belief, lifestyle and taste. The SBS will be independent of government, impartial in its editorial view and given creative freedom in production. An expert panel will devise the SBS charter and propose governance arrangements to ensure that the SBS focuses on quality, serves the interests of the people of Scotland, and works in partnership with staff. These principles will subsequently be enshrined in legislation.

The SBS will inherit a proportionate share of the BBC's commercial ventures, including BBC Worldwide Ltd, BBC Studios and Productions Ltd and BBC News Ltd, and of their associated ongoing profits. Scotland's population share of those profits ranges from around £13 million to £19 million per year^[353].

The SBS will receive licence fee revenue from Scotland, which is of the order of £320 million; £13 million from BBC commercial profits; and around £12 million from the Scottish Government for Gaelic broadcasting - a combined total for publicly-funded public service broadcasting in Scotland of £345 million. By comparison RTÉ in Ireland spends approximately £286 million on providing full TV, radio and online services. The level of funding for public service broadcasting in Scotland means that there will be no necessity for the SBS to raise revenue from advertising. In addition, as the BBC's spend in Scotland in 2016/17 is estimated to be only around £175 million, independence will mean almost doubling the level of public spending on public service broadcasting and production in Scotland.

The SBS will start broadcasting when the current BBC charter comes to an end on 31 December 2016. On TV, the SBS will begin with a new TV channel and take on the responsibility for BBC Alba. On radio, the SBS will begin with a new radio station in addition to taking on responsibility for Radio Scotland and Radio nan Gàidheal. The SBS will also provide online services, including a catch-up player and news website. Over time, the SBS will develop its services to reflect the broad interests and outlook of the people of Scotland.

Currently, BBC Scotland delivers a range of original programming for the BBC network. We propose that the SBS should enter into a new formal relationship with the BBC as a joint venture, where the SBS will continue to supply the BBC network with the same level of programming, in return for ongoing access to BBC services in Scotland^[354]. Through this new relationship between the SBS and the BBC, existing BBC services will continue, with the SBS having the right to opt-out of BBC 1 and BBC 2 - when appropriate - as BBC Scotland can already. Current programming like EastEnders, Doctor Who, and Strictly Come Dancing and channels like CBeebies, will still be available in Scotland.

The SBS will continue to co-commission, co-produce and co-operate with the BBC network. The SBS will commission or produce a share of BBC network original productions reflecting the Scottish population share, in terms of both hours and spending. These arrangements will shift commissioning power and resources from the BBC to Scotland, while providing continuity for the BBC, consistent with its recent moves to decentralise from London.

The SBS will be encouraged to explore the opportunities with other broadcasters for co-production and co-commissioning, beyond the joint venture agreement with the BBC, to build on the strengths that the Scottish production sector has in comedy, drama, natural history and factual entertainment programming.

BBC charters are generally set for 10 years, with the new charter due to begin on 1 January 2017. SBS co-operation on this basis with the BBC will be predicated upon there being a Westminster government that shares our commitment to publicly-funded public service broadcasting. Should it become clear in the future, potentially after the 2015 UK General Election, that there is a risk to the licence fee at Westminster, then the Scottish Government would establish a contractual agreement with BBC Worldwide Ltd to secure continued access to BBC Services for the people of Scotland. BBC channels are already broadcast live in Ireland, the Netherlands and Switzerland through contractual arrangements with BBC Worldwide.

Channel 4 is also a public service broadcaster, similar to the BBC although on a much smaller scale, but it is funded from privately raised funds from commercial exploitation of assets, as well as from advertising and sponsorship. Channel 4 currently commissions around 3 per cent of its original output from Scotland^[355]. Ofcom is currently consulting on Channel 4's quota of programmes produced outside England, with a proposal that the volume could increase over time to a minimum of 9 per cent of original production by 2020^[356].

Although on independence Channel 4 will have a licence extending to the end of 2024, this Government will work to ensure that a structure is in place by 2016 that recognises the need for an appropriate minimum level of original production, in terms of both value and hours, that reflects Scotland's population size.

In Europe, there are examples of channels that operate across different countries, including those with public service obligations. For example, ARTE operates in Germany and France, with two shareholders, ARTE Deutschland and ARTE France, who each have a 50 per cent share of the group and provide 50 per cent of the content. One possible long-term model for Channel 4 might be a company part-owned by a Channel 4 Scotland which controls a shareholding proportion matching Scotland's population share, with the number of hours and proportion of spend also matching this level.

We will also encourage inward investment in film and television production in Scotland, and use our new overseas network to promote Scotland as a location for film and television production. We plan to continue the existing fiscal incentives for such production, and, within the first term of an independent Scottish parliament, we propose to look at ways to encourage further development in the sector, through incentives, infrastructural investment and support for development, skills and training.

Regulation of broadcasting is currently carried out by Ofcom, which also regulates telecommunications and postal services. The Scottish Government proposes that the economic regulatory functions of Ofcom should be included in a combined economic regulator^[357]. Appropriate measures would also be put in place to recognise the cultural significance of broadcasting within Scotland's new regulatory arrangements. An independent Scotland will also co-operate with the rest of the UK on managing the spectrum, just as Ofcom and Ireland's ComReg co-operate at present.

The National Lottery

On independence the National Lottery will continue to operate in Scotland. People will still be able to play National Lottery games, and the infrastructure enabling them to do so will remain in place. At present the licence to run the National Lottery is held by Camelot Group plc, and is in place until 2023.

We will ensure that Scotland continues to receive our fair share of funding from the National Lottery. At present the Big Lottery Fund, sportscotland, Creative Scotland and the Heritage Lottery Fund distribute good cause money across Scotland. However, many decisions are still made at a UK-wide level. In an independent Scotland, all decisions about the distribution of good cause money will be made in Scotland to ensure that the needs of local communities are met.

Communications

The choices open to us

Independence provides the opportunity to deliver the Scottish Government's vision of a strong, stable and modern digital economy within a regulatory framework that meets best practice, delivering benefits for citizens, communities and the economy, and reducing the digital divide. Providing continuity of service to citizens, clarity for industry and stability for investment will also be a key aspect of the Scottish Government's approach to telecommunications policy in an independent Scotland.

Currently, telecommunications policy and regulation are reserved to the Westminster Government, and mobile and broadband initiatives are fragmented at a UK level. For example, the Westminster Government is currently delivering a number of programmes: a £530 million rural broadband fund (with a further £250 million on which they recently consulted); a £150 million super-connected cities fund; and a £150 million mobile infrastructure fund. All of these projects are being administered separately - they have different aims and objectives and are not fully aligned with each other. The overall investment made by Westminster is not being utilised to maximum impact. With independence, we will have the opportunity to direct these resources more effectively within Scotland to achieve good connectivity across Scotland.

In an independent Scotland, governments will have the ability to align policy, taxation and regulation to deliver a coherent overall approach, and design broadband and mobile initiatives more effectively and specifically targeted at the needs of Scotland. Independence would also provide the opportunity for the Scottish Government to look at options for bringing telecommunications and broadcasting regulation closer together to deliver a more integrated market.

Our priorities for action

The Scottish Government is already building the foundation for world-class digital infrastructure in Scotland. We are making a significant investment in the Step Change programme which will see investment of over £410 million, from a range of funding sources^[358], to make available fixed fibre broadband to 85 per cent of Scottish properties by the end of 2015 and around 95 per cent by the end of 2017. This will significantly enhance digital connectivity and is essential for bridging the digital divide in coverage that exists today between urban and rural areas. Under our proposals, this initiative will continue after independence.

Future wireless and mobile technologies will also play a key role and have the potential to provide high-speed broadband to rural areas at a more affordable cost. Forthcoming spectrum releases, such as the 700 MHz band, could offer significant benefits for mobile broadband coverage, in particular in rural areas. After independence, our approach will be to ensure new spectrum licences in Scotland deliver maximum availability of mobile services throughout Scotland as a whole - not just our urban areas.

Roll-out of 3G in Scotland has been slow, particularly in comparison to European counterparts such as Sweden. 3G services were introduced in both the UK and Sweden in 2003. By 2004, coverage in Sweden was around 85 per cent^[359] - while in Scotland, according to figures published by Ofcom^[360], even by 2010 3G coverage was only at 66 per cent. Rural 3G coverage in Sweden today is 98 per cent, and 99 per cent overall^[361].

A recently published report from Ofcom states that outdoor 3G coverage in Scotland is at 96.6 per cent^[362], but there is still a disparity between urban and rural areas, and these high figures do not reflect the reality of the user experience in rural areas. Recent research into mobile performance commissioned by the Scottish Government confirms that the user experience of 3G services across rural areas does not always reflect the headline coverage figures reported^[363]. For example, research indicates that for the Highland Council region, around 84 per cent of the geographical area is without a 3G signal, compared to Ofcom data (using data underpinning Ofcom's 2013 UK infrastructure report^[364]) which indicated that only 63.6 per cent is without a 3G signal. Other local authority areas with large discrepancies include Scottish Borders (58.5 per cent compared to 39.7 per cent) and Perth and Kinross (60.2 per cent compared to 42.6 per cent). Factors such as poor in-building coverage - even in urban locations - contribute to this finding as 3G signals typically revert to 2G when signals are poor, worsening the user experience.

The recent auction for 4G mobile services requires one licensee, Telefónica UK Ltd, to provide 95 per cent indoor coverage across Scotland, which is likely to provide 98-99 per cent outdoor coverage. However, parts of rural Scotland are still likely to endure poor 4G coverage. The target date for fulfilment of the 95 per cent Scottish coverage target is 2017, and it is likely that the more rural areas will be left to the end. In contrast, 4G coverage in Sweden is already at over 90 per cent.

It is clear that auction design is critical in countries with large geographical areas with sparse populations, to give consumers access to service and choice. The auction design and allocation of licences is currently outwith our control in Scotland.

With independence, we can learn from the regulatory and policy regimes of countries like Sweden to achieve greater coverage targets. We will explore the feasibility of setting higher obligations - such as at local authority level - as was our request during the 4G consultation process.

The optimum regulatory framework to support the delivery of world-class digital services is particularly important in the context of the geographical challenges faced by Scotland. This will be a priority for this government on independence. Regulation of telecommunications was considered in the Scottish Government's paper Economic and Competition Regulation in an Independent Scotland^[365]. The paper recognises that it is vital that the design and delivery of regulation is effective and efficient, and meets the principles of better regulation: that it is simple, transparent, proportionate, consistent, accountable and targeted only where needed. It must generate confidence among investors and customers, and offer stability to the market, recognising the long-term investments that are made, and offering certainty to the market that investors will get return on their investment.

A Scottish telecommunications policy will be designed with these principles in mind, and will continue to comply with the responsibilities of all EU member states.

Providing continuity of service to citizens, clarity for industry and stability for investment is central to the Scottish Government's vision for telecommunications services. Telecommunications markets currently operate on a GB-wide basis, and will continue to do so. We will put in place arrangements consistent with EU rules to deliver continuity for regulation, telecommunications infrastructure and services in the short-term. This will ensure a seamless transition to independence and will give confidence to customers and investors. Any changes to the current regulatory framework will be fully considered and discussed with stakeholders, and designed in the best interests of citizens, industry and the economy.

One specific issue that has been raised by the Westminster Government is roaming charges for mobile telephone users after independence^[366]. Roaming charges are currently applied at the discretion of companies and up to specific European limits. The European Commission (EC) limits have already cut charges for voice calls, texts and internet access by 75 per cent since 2007.

There is no reason, in a competitive integrated market, for companies to frustrate customers on both sides of the border by introducing roaming charges after independence. The EC recently published an ambitious package for telecommunications market reform^[367]. When approved, the proposals will ban incoming call charges while travelling in the EU from 1 July 2014, and abolish all other mobile roaming charges by 2016. There is therefore no question of mobile phone users in an independent Scotland facing such charges.

For similar reasons, there is also no question of calls from land-lines in Scotland to other parts of the UK being subject to international call rates, as the EC has also proposed to make international fixed-line calls the same price as domestic calls.

Postal Delivery Services and Royal Mail

Postal services are of great importance in Scotland. Over recent years, under successive Westminster governments, there has been a reduction in the number of post offices, increases in the price of postage, and high parcel delivery charges in rural areas.

On independence, responsibility for regulating postal services, such as the Royal Mail will transfer from Ofcom to a Scottish regulator. This will provide the opportunity to ensure a universal postal service is in place which suits Scotland's needs, in particular the needs of our remote and rural communities.

The EU requires postal deliveries and collections to be made five days per week in a member state. In an independent Scotland, there will be a service to match, as a minimum, the level of service provision inherited from the UK on independence, which is currently a six days per week service for mail.

Regulating postal services will also allow an independent Scottish government to take steps to address the high cost of parcel delivery in remote and rural areas.

Royal Mail

The Scottish Government and the majority of Scottish MPs at Westminster opposed the privatisation of the Royal Mail. The Royal Mail was a shared asset that belonged to all parts of the UK. The refusal of the Westminster Government to delay privatisation or to reconsider in light of Scotland's opposition to privatisation demonstrates the importance of Scotland having responsibility for services in Scotland.

A privatised Royal Mail threatens the quality of service and risks further increasing the price of postage. On independence, the Scottish Government will begin the process of renationalising the Royal Mail in Scotland. Our approach to renationalisation will be considered in the light of circumstances at the point of independence, including the prevailing structure of the Royal Mail. At present, the Royal Mail is predominantly in private ownership, with around 10 per cent owned by employees and around a third remaining in public ownership. Bringing the Royal Mail into public ownership will require negotiation with the UK on Scotland's share of the government stake, and establishing a new publicly-owned postal service in Scotland. Costs arising from this process will also require negotiations with Westminster, recognising that it proceeded with the sale of Royal Mail after the Scottish Government had made clear our intention to bring the mail service in an independent Scotland into public ownership.

Post Office

On independence, Scotland will inherit our share of the state-owned Post Office Ltd, which provides a range of services through crown offices and sub-postmasters. Westminster has been responsible for the separation of the post office network from Royal Mail, thereby risking the long-term future of post offices if Royal Mail chooses not to renew the inter-business agreement with Post Office Ltd once the current contract expires in 2022.

Sub-postmasters operate as independent businesses: many receive a subsidy to ensure a network of post offices in remote and rural locations. The Scottish Government has also invested in the post office network through the Post Office Diversification Fund and the Rural Rate Relief Scheme.

Independence will allow post office services to focus on what is best for communities and businesses across Scotland, including:

• greater use of post offices for delivery of government services, increasing footfall and income for sub-postmasters and providing improved and more efficient public services to individuals and communities
• redirecting resources within the Post Office to support local post offices which deliver frontline services, particularly in the context of post offices which are community hubs
• enhancing the link between a publicly owned Royal Mail and post offices in Scotland