Wellbeing Economy, Fair Work and Energy: FM letter to Cabinet Secretary

Dear Neil,

Thank you for your commitment to the people of Scotland by taking up your role as Cabinet Secretary for Wellbeing Economy, Fair Work and Energy. I look forward to continuing to work together to deliver real, tangible improvements in the lives of the people of Scotland.

We, as a country, have faced incredible challenges over recent years. We are still recovering from the impact of the COVID pandemic. War continues in Europe, and the impact of Brexit and the cost of living crisis have combined to create some of the most challenging economic conditions in living memory. Alongside this, we face the twin crises of climate change and nature loss, which are global threats of existential proportions.

As a Government, we must be unapologetic about supporting those who need help the most. We will collectively deliver on the promises we have made in our Policy Prospectus, including the New Deal for Business, and use the priorities it sets out to drive our decision making, our accountability to parliament and our engagement with partners and the people of Scotland. This will mean that we will need to make tough decisions to ensure that every pound we spend and invest is targeted in such a way that it reaches those that need it most and delivers maximum value.

Our aims as a Government

To ensure we maintain a laser focus on delivery for the people of Scotland, we have set out three critical and interdependent missions in our Policy Prospectus Equality, Opportunity, Community: New Leadership – a fresh start for the period between now and March 2026. These will be underpinned by our refreshed National Performance Framework and our shared policy priorities set out in the Bute House Agreement. These three outcomes are:

• Tackling poverty and protecting people from harm. Continuing to tackle poverty in all its forms to improve the life chances of people across Scotland.
• A fair, green and growing economy Delivering a wellbeing economy through harnessing the skills and ingenuity of our people and seizing the economic and social opportunities from meeting our net zero targets.
• Prioritising our public services. Creating, investing in, and maintaining sustainable public services, to ensure the people of Scotland can access modern, effective, and timely services when they need to.

These missions will define our work as a government. You and I have agreed an ambitious range of wellbeing economy, fair work and energy outcomes that you will deliver over the next three years. We also have a collective responsibility across Cabinet to deliver all of the objectives we have set out in our policy prospectus to succeed in our missions.

Throughout all this, you should ensure you are contributing to Scotland's National Outcomes. Our National Outcomes describe our shared priorities, including the need to respect, protect and fulfil human rights and allow all in Scotland to live free from discrimination.

Having agreed this range of longer-term outcomes, I now ask you to consider what this looks like in terms of outcomes and delivery actions over the next year.

Objectives for your portfolio for 2023/24

As Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, the work of your portfolio is key to meeting these missions. It is imperative that we seize the economic, scientific and social opportunities of a just transition to net zero, respond to the opportunities and challenges of AI and deliver greater prosperity throughout Scotland enabling businesses to thrive with greater fairness and opportunity for all people and communities. I welcomed our recent discussion of the priorities for your portfolio for the remainder of this parliamentary term (listed in Annex A).

For this financial year we have agreed that you will deliver on the following outcomes:

• Lead work across government, and with business, to re-set the relationship with business through implementation of recommendations made by the New Deal Group for Business
• Increase the number of employers who pay real living wage through the introduction of conditionality on grants for Fair Work and sectoral Fair Work agreements
• Ensure that the whole of government is aligned in its action behind the Fair Work agenda, harnessing the contribution of the Fair Work Convention and baking fair work and equalities into choices on strategy, delivery and funding
• Starting with engagement with the Cabinet Secretary for NHS Recovery, Health and Social Care portfolio, ensure that government interventions in the labour market are integrated to tackle Scotland’s entrenched inactivity challenge and improve labour participation for the long term, supporting both growth and wellbeing
• Continue to deliver person centred employability support, helping those who experience barriers to labour market participation towards and into work, with a particular focus on parents, recognising our ambitions around tackling child poverty
• Ensure that the new Techscaler network is fully operational, deliver the 7th Hub, offering high quality education programmes to entrepreneurs and support the development of Scotland’s Universities as “entrepreneurial campuses”
• Drive forward a programme of targeted export support and promotion, implement our Sector Export Plans and attract high quality inward investment
• Work with public and private sector partners to raise levels of investment across the economy and implement the recommendations from the Investor Panel to attract global capital investment and support delivery of our net zero ambitions
• Deliver our innovation strategy, demonstrating growth in key business clusters in life sciences, advanced manufacturing, digital and renewables
• Drive up greater levels of regional empowerment and growth by delivering on the ambitions of the Regional Economic Policy Review, and developing the network of Regional Economic Partnerships
• Establish the Scottish Hydrogen Programme to draw together expertise across government and our delivery partners
• Continue to deliver the Energy Transition Fund (ETF)
• Deliver the Hydrogen Innovation Scheme, and launch the second tranche of the Emerging Energy Technologies Fund (EETF) hydrogen investment programme, the Green Hydrogen Fund
• Agree a Sector Deal with the onshore wind industry, comprising commitments from the Scottish Government and industry to accelerate deployment and maximise the benefits for the people of Scotland
• Continue work on removing poor energy efficiency of homes as a driver of fuel poverty in order to reduce the proportion of households in fuel poverty
• Work with industry to accelerate decarbonisation and create energy transition opportunities at major industrial sites such as Grangemouth
• Run phase 3 of the Scottish Industrial Energy Transformation Fund (SIETF) programme to support decarbonisation in a wide range of industrial manufacturing sectors
• Develop a Strategic Investment Framework for offshore wind, which identifies priority public and private sector interventions that ensure that our supply chain has the capacity and capability to meet economic opportunities arising from our offshore wind potential.

These priorities will not be the only areas of work to contribute, but are some of the key levers we have to deliver the outcomes set out in our policy prospectus. I expect impact and improvement to be key considerations as you deliver these priorities and I expect you to bring forward suggestions for where we may achieve better outcomes if you think there are additional or alternative options. I would also like you to consider the opportunity for public service reform within your portfolio and the efficiency of the institutions and public bodies you have responsibility for to deliver better outcomes for Scotland.

Responsibility for financial sustainability

As we take action together to carefully manage the Scottish Budget to deliver these priorities, you must work within your portfolio to drive efficiency and reform, and identify measures that can be taken to create additional flexibility within the wider Budget and deliver a balanced outturn against agreed envelopes.

We must prioritise, to ensure that we use our finite resources in the most effective way. That prioritisation work is significant, but it will also be demanding, and will require us to make hard decisions. I know you will be guided by our commitment to support those who need the most help and prioritise resources to the policies and programmes which make the biggest difference to our three core missions.

Collaborative working with partners

It is important to recognise this work cannot be achieved in isolation. It requires collaboration with key partners: Local Government, agencies, business (including small businesses), communities and third sector partners, among others. I believe, as I know you do, that the participation of, and collaboration with, these key partners is essential. I ask you to continue to ensure you listen to their ideas, their views, and their lived experience, take into account potential impacts – as well as benefits - on them and put them at the centre of our work. You will also work closely with our colleagues and partners in the Scottish Green Party, to ensure a continued, positive and productive relationship via the Bute House Agreement.

Our Policy Prospectus set out our commitment to resetting important relationships. As well as resetting the relationship with business, our commitment to resetting the relationship with local authorities and working collaboratively with Local Government is central to the delivery of many of the things we have committed to achieve. I ask you to work with your colleagues to support the Deputy First Minister in building on the constructive progress already made in developing our relationship with Local Government. This should include beginning a programme of reform to improve the way that we support businesses, increase investment and realise economic opportunities in every region of the country.

Collaborative working across Cabinet

It is your responsibility to engage, timeously and appropriately, with your Cabinet colleagues and their junior Ministers as we seek to deliver on these objectives and ensure that the voice of business is heard within other policy areas. In addition to those objectives laid out above, you are also expected and required to work on cross-cutting government objectives, which will contribute to our priority outcomes. These include, but are not limited to, the transition to Net Zero; work to meet our child poverty targets; Keeping The Promise; and the incorporation of human rights treaties into Scots law, as far as possible within devolved competence. I know you will also continue to work closely with the Minister for Independence to provide the people of Scotland the information they need to make an informed choice about whether Scotland should become an independent country. 

In considering what issues to bring to Cabinet, I want you to prioritise those issues which most clearly support the delivery of our three core missions and therefore most significantly engage the collective responsibility of this Government. This will ensure that Cabinet is focused on long term delivery, on the most critical issues of policy and on what matters most to the people of Scotland.

Cabinet Sub-Committees and Ministerial Working Groups also play a key role in ensuring leadership and accountability of cross cutting issues to support delivery of our three core missions. They are critical for providing a space for oversight on delivery of our commitments thereby helping us to maintain our outcomes focus. I expect all members of the Cabinet Sub-Committees to play a proactive role in them, recognising that there will be a number of challenging decisions to be taken by the Cabinet Sub-Committees in the coming months.

Planning and accountability for delivery

I ask that you ensure that thorough, evidence-based and financially assessed delivery plans are in place for these commitments, to support the ongoing and effective monitoring of progress and impact. This plan should contain baseline performance measures for each commitment and highlight which commitments you are prioritising for early implementation, alongside related timelines, dependencies and assumptions. It will be my expectation that this articulates your agreed programme for the year ahead, with outcomes which represent best value for money for the resources you have at your disposal and that they demonstrate your balanced portfolio budget. This will in turn allow the Deputy First Minister and I to ensure all portfolios deliver within our overall budget the prioritised set of outcomes we are seeking.

I have asked the Deputy First Minister to consider these plans from all portfolios and to join me in six monthly discussions with you on progress against out agreed objectives. The Deputy First Minister will be in touch separately with you around reporting arrangements as part of her role in co-ordinating cross government delivery.

I look forward to working with you to deliver on our shared ambitions for Scotland.

Yours sincerely,

First Minister

Wellbeing Economy, Fair Work and Energy Policy Prospectus Priorities

• Support the creation of more high quality jobs, stronger businesses, and vibrant communities by working with businesses and other partners to raise the rate of investment in productive assets.
• Increase the number of people earning at least the real living wage, working in jobs that meet Fair Work principles, and contributing to society through fulfilling and increasingly productive work, narrowing the gender pay gap.
• Help more people, including parents, into work, through employability support, skills support and high quality early learning and school age childcare provision, with fewer people unable to work due to ill health or disability.
• Put Scotland on track to become a leading European start-up nation, in which more businesses are created and grow to scale.
• Support the emergence of internationally competitive clusters of excellence – including in green technologies, health & life sciences, digital and advanced manufacturing – driven by investment and innovation.
• Work closely with regional and local partners, including Local Government, to drive regional economic empowerment and ensured that our programme of community wealth building is improving resilience and seizing economic opportunities that exist across the country.
• Support the sustained growth of international exports while diversifying into new markets; with more, higher-quality, inward investment, and Scotland’s attractiveness as a location for inward investment improving.
• Seize the major opportunities to attract a pipeline of investment across sectors to secure the economic and community benefits from the just transition to net zero, and ensure we continue to tackle fuel poverty, working with our advisory panel, to progress towards our statutory fuel poverty targets.
• Maximise the economic, supply chain, and employment opportunities of renewable hydrogen projects, and onshore and offshore wind, with up to £1.4 billion of developer supply chain commitments on average across ScotWind.
• Lay the foundations for delivering 5 gigawatts of hydrogen production by 2030 and the development of a hydrogen supply chain in Scotland.
• Work with industry to accelerate decarbonisation and create energy transition opportunities at major industrial sites such as Grangemouth.
• Engage widely with business leaders to develop and agree a ‘New Deal’ with the private sector, for how we will work with business to deliver a growing economy that increases wellbeing.