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Scottish Budget Draft Budget 2013-14

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© Crown copyright 2012

ISBN: 978-1-78256-016-6

This document is available from our website at www.scotland.gov.uk.

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w w w . s c o t l a n d . g o v . u k

The Scottish Government, Edinburgh 2012

Scottish BudgetDraft Budget 2013-14


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ISBN: 978-1-78256-016-6

The Scottish GovernmentSt Andrew’s HouseEdinburghEH1 3DG

Produced for the Scottish Government by APS Group ScotlandDPPAS13304 (09/12)

Published by the Scottish Government, September 2012

CONTENTS

FOREWORD by the Cabinet Secretary for Finance, Employment and Sustainable Growth iv

Chapter 1. Strategic Context for Draft Budget 2013-14 1Chapter 2. Portfolio Plans 21Chapter 3. Health and Wellbeing 23Chapter 4. Finance, Employment and Sustainable Growth 38Chapter 5. Education and Lifelong Learning 52Chapter 6. Justice 64Chapter 7. Rural Affairs and the Environment 83Chapter 8. Culture and External Affairs 99Chapter 9. Infrastructure, Investment and Cities 111Chapter 10. Administration 134Chapter 11. Crown Office and Procurator Fiscal Service 138Chapter 12. Local Government 142

ANNEXES

ANNEX A Departmental Expenditure Limits by Portfolio 151ANNEX B Annually Managed Expenditure by Portfolio 152ANNEX C Departmental Expenditure Limits:

Capital/Resource Split 153ANNEX D Comparison 2008-09 to 2014-15 156ANNEX E Estimated Payments Under PPP Contracts 159ANNEX F Glossary 160

iv | SCOTTISH DRAFT BUDGET 2013-14

This document sets out the Scottish Government’s proposed spending plans for 2013-14, for consultation with the Scottish Parliament and the people of Scotland.

In publishing this Draft Budget, the Government renews its commitment to addressing the impact on Scotland of current global economic conditions, directing all our efforts to making Scotland a more successful country, with opportunities for all to flourish through increasing sustainable economic growth.

As a result of decisions taken by the UK Government, the Scottish Budget is being reduced by over 11 per cent in real terms over four years. Within that, our Capital Budget is being reduced by one third. The Scottish Government continues to argue that this is the wrong approach and that a fiscal stimulus is required now to boost economic recovery.

Focusing on economic recovery

In last year’s spending review and the Government Economic Strategy, we set out substantial and positive plans to support Scotland’s economy:

● boosting conventional capital investment through the £2.5 billion pipeline of infrastructure projects that will be delivered through the Non-Profit Distributing model, switching over £700 million from resource budgets to support capital spending and delivering a range of innovative finance initiatives;

● sustained investment in skills and post-16 education, including through our Opportunities for All initiative and the provision of a record 25,000 Modern Apprenticeships;

● offering the most generous package of business rates reliefs in the UK, including the Small Business Bonus Scheme, which is providing support to over 85,000 business properties;

● significant investment in the low-carbon economy, to cut emissions, create jobs and secure Scotland’s leadership in the green economy; and

FOREWORDby the Cabinet Secretary for Finance, Employment and Sustainable Growth

FOREWORD | v

● supporting household budgets at a time of financial pressure and delivering the key commitments we have made to the people of Scotland, including:

❍ real terms protection for the NHS revenue budget, supporting frontline services;

❍ maintaining the 1,000 additional police officers commitment;

❍ working with our local government partners to uphold the council tax freeze;

❍ supporting Scottish students into higher education through our policy of no tuition fees;

❍ improving the quality of our schools through Curriculum for Excellence and maintaining teacher numbers in line with pupil numbers;

❍ free prescriptions;

❍ support for concessionary bus travel; and

❍ ensuring a Scottish Living Wage for workers covered by Scottish Government pay policy.

Each of these commitments will continue to be delivered by the spending plans set out in the Draft Budget 2013-14.

Decisive further measures to support economic growth

Scotland is an open economy and with the world economy struggling to gain momentum and continued uncertainty in the Eurozone, we continue to face significant challenges. While there are positive signs of resilience in the Scottish economy, in comparison to the position in the UK as a whole, the Scottish Government is clear that further action must be taken.

That is why we announced in February 2012 a package of £380 million of capital spending over the period to 2014-15, focusing on transport, housing, health, digital and maintenance projects, aimed at creating jobs and stimulating growth.

In June 2012, we announced a further package of investment, directed at shovel ready projects valued at £105 million in 2012-13.

This represents sustained direct investment since the spending review in Scotland’s infrastructure, creating jobs and stimulating growth.

Priorities for Draft Budget 2013-14

The Draft Budget for 2013-14 and actions we will take this Autumn will together provide further investment in construction, skills and the green economy of £180 million over two years, and I am also authorising the financing of more rapid delivery of the Schools for the Future programme worth £80 million.

To support economic recovery, we will provide an immediate stimulus to the construction industry with additional capital investment in affordable housing of £40 million in 2012-13 and 2013-14.

vi | SCOTTISH DRAFT BUDGET 2013-14

To further assist the construction sector, we are able to expand the number of schools being built through Scotland’s Schools for the Future programme. Due to efficiencies delivered by the Scottish Futures Trust, we will increase the number of schools being built from 55 to 67, and we will build them sooner by bringing forward £80 million of planned investment from future years into this spending review period by financing through the NPD model.

Our partnership working with local government will be deepened to further focus our efforts on economic growth. The Scottish Government and the Convention of Scottish Local Authorities (COSLA) have agreed a joint commitment to working together wherever possible to increase or accelerate capital investment to support economic recovery.

Alongside this investment in infrastructure, we are also bringing forward new measures to support those looking and training for work.

The budget will inject a further £18 million of funding into skills training with support for:

● a national employer recruitment initiative that will create up to 10,000 opportunities for small and medium-sized enterprises (SMEs) to recruit young people; and

● the establishment of an Energy Skills Academy to support the creation of skills in oil and gas, renewables, thermal generation and carbon capture and storage industries.

And we are allocating additional resources to colleges to maintain our commitments to keep college numbers at 2011-12 levels and to provide the necessary student support.

Alongside this we will deliver a Green Investment Package over three years comprising:

● £30 million of additional funding for a programme of energy efficiency measures that will tackle fuel poverty, contribute to meeting our climate change targets and provide opportunities for small and medium sized construction firms;

● further funding for low carbon transport with a focus on increasing numbers of hybrid buses and improving community cycling infrastructure; and

● provision for the Fossil Fuel Levy surplus to be used to establish the Renewable Energy Investment Fund, promoting the development of energy from renewable sources in Scotland.

Together these measures add substantial further weight to the distinctive course that the Scottish Government is taking to the economy and the public finances.

FOREWORD | vii

Creating a fairer Scotland

This Draft Budget delivers for 2013-14 all of the key commitments we have made to the people of Scotland, through the Social Wage.

The Scottish Government is responding as best it can within its legislative competence and available resources to address the worst effects of the UK’s welfare reform. This will include financial support for the successor arrangements for the Social Fund and in partnership with Local Government, providing resources to mitigate the cut to Council Tax Benefit from the UK Government.

I am also publishing alongside this budget the Scottish Government’s Pay Policy for 2013-14, which will enable modest increases for most employees but within an approach that will protect public sector employment and maintain confidence in the economy. We reaffirm our commitment to a no compulsory redundancy policy.

The pay policy also includes a commitment to continue to implement the Scottish Living Wage over the remainder of this Parliament.

Supporting and reforming public services

This Draft Budget develops the Scottish Government’s focus on public service reform, and in particular the role that a decisive shift towards more preventative interventions can play in improving outcomes and ensuring the financial sustainability of our public services. An account of the progress we are making in this area is set out in this document. Looking forward, Single Outcome Agreements will incorporate a long-term prevention plan that makes a commitment to increase the resource invested and reinvested over time in preventative interventions.

The Draft Budget also confirms that we are on track to deliver our ambitious programme of police and fire reform and reflects agreement with local authority partners about the transfer of funding for these services.

Achieving constitutional reform and independence for Scotland

This Draft Budget confirms the shape of the sustained programme of investment that this Government believes is right for Scotland’s economy.

Our spending plans are focused on boosting public sector capital investment, taking direct action to tackle unemployment — particularly amongst our young people — and supporting economic confidence by encouraging private sector investment and providing security to Scottish households and businesses.

In setting out these spending plans, the Scottish Government is using all available levers to support growth and our public services.

viii | SCOTTISH DRAFT BUDGET 2013-14

However, we will also continue to make the case that to create a prosperous and fair country we need full control over Scotland’s economy and public finances, ahead of the Referendum in Autumn 2014.

I commend these spending proposals to the Scottish Parliament and look forward to debating them as we take forward the budget over the coming months.

John Swinney MSP Cabinet Secretary for Finance, Employment and Sustainable Growth

CHAPTER 1 Strategic Context for

Draft Budget 2013-14

INTRODUCTION

The proposals set out in this Draft Budget for 2013-14 are driven by the Scottish Government’s Purpose of creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth.

This focus on fulfilling our Purpose, at the heart of the Scottish Spending Review 2011, continues to guide our strategic direction for economic recovery, wellbeing and the effective delivery of our public services.

We remain committed to the shape and strategic direction of the spending plans set out in the Spending Review, and to being open with the people of Scotland about how this Government will meet the challenges facing the economy and the public finances.

Our fundamental priorities for this Budget are:

● to accelerate economic recovery, create jobs and secure new opportunities through the low-carbon economy;

● to continue the decisive shift to more preventative approaches to public service delivery and deliver our wider public service reform programme; and

● to maintain our commitment to a Social Wage for the people of Scotland at a time of acute pressures on household incomes.

It is with these priorities in mind that the Government has reviewed its spending plans for 2013-14 and, within the tight financial parameters that apply, has taken a number of targeted steps to increase the impact of our spending on the economy and our public services.

This Draft Budget maintains our strong record of effectively managing the public finances, using the fiscal powers currently available to us. The current constitutional framework leaves us severely constrained in our ability to protect the people of Scotland from the full impact of the global recession and the damaging fiscal approach imposed by the UK Government. Our proposals to maximise the benefits of public spending in Scotland continue to be hampered by the ongoing real-terms cuts made to the Scottish budget by the Chancellor of the Exchequer. This is the strongest illustration of the case for Scotland to have full fiscal and economic powers.

2 | SCOTTISH DRAFT BUDGET 2013-14

THE SCALE OF THE CHALLENGE

Global economic conditions remain challenging, with growth more subdued than previously forecast and a sustained recovery from the 2008 financial crisis yet to take hold. In particular, the continuing uncertainty across the Eurozone presents risks to the Scottish economy and it is likely to be some time before growth returns to a sustainable trend.

The UK Government’s response is not working. UK GDP has now contracted for three consecutive quarters, with a total decline of 1.2 per cent over the period 2011 Q4 to 2012 Q2. A failure to secure growth risks undermining the Chancellor’s fiscal consolidation plans. This poses a risk to our future budgets.

2013-14 will represent the fourth consecutive year for which there has been a real-terms reduction imposed on the Scottish Government’s DEL budget. Our capital DEL budget — a key driver of economic recovery — continues to bear the harshest reduction, with a further real-terms cut of 15 per cent from the previous year.

Table 1 provides the overall DEL figures for Draft Budget 2013-14.

Table 1: Scottish Government Departmental Expenditure Limits 2010-11 to 2014-15

SG Spending Limits — Cash Terms 2010-11 £m

2011-12 £m

2012-13 £m

2013-14 £m

2014-15 £m

UK Government SR settlement October 2010 29,224 27,907 28,262 28,248 28,484

Subsequent UK Budget consequentials and other agreed transfers prior to the 2011 Scottish Spending Review

59 42 25 23

Total at time of Scottish Spending Review 29,224 27,966 28,304 28,273 28,507

UK Budget consequentials and other agreed transfers since the 2011 Scottish Spending Review

375 299 168 155

Total DEL 29,224 28,341 28,603 28,441 28,662

Revenue DEL 25,579 25,896 26,064 26,225

Capital DEL 2,762 2,707 2,377 2,437

SG Spending Limits — Real Terms (2012-13 prices*)

Revenue DEL 27,259 26,270 25,896 25,429 24,961

Capital DEL 3,462 2,837 2,707 2,319 2,320

Total 30,721 29,107 28,603 27,748 27,281

Real-Terms Change – year on year -5.3% -1.7% -3.0% -1.7%

Real-Terms Change – cumulative -5.3% -6.9% -9.7% -11.2%

*Note: GDP deflators (in 2012-13 prices) — source, HM Treasury; forecast data are consistent with March 2012 UK Budget

STRATEGIC COnTExT FOR DRAFT BUDGET 2013-14 | 3

The figures in Table 1 show additions that have been made and agreed since the 2011 Scottish Spending Review to the spending limits available to the Scottish Government. These comprise a mix of budget consequentials and transfers that have been agreed with the UK Government. Some transfers will be updated as part of the UK Government supplementary process in the last quarter of 2012-13.

The Chancellor indicated in this year’s UK Budget that significant reductions in public spending are likely to continue beyond this Spending Review period (i.e. after 2014-15), which would mean that real-terms spending power in Scotland is again limited by decisions made in London. Scottish total DEL for 2016-17 would be 17 per cent lower in real terms than that for 2010-11. As highlighted in Figure 1 below, given that 2012-13 DEL is 7 per cent lower than 2010-11, we are currently not yet half way through the budget cuts indicated by the UK Government.

Figure 1: Continuing cuts to Scottish DEL settlement

Through our Programme for Government and Government Economic Strategy we have set out how we will meet this fiscal challenge.

Programme for Government

The Scottish Government’s vision and approach are set out in Working for Scotland: The Government’s Programme for Scotland 2012-2013, published on 4 September 2012. This highlights our objectives and ambitions for this parliamentary session, and provides the strategic context for our spending proposals.

A determination to increase sustainable economic growth and improve Scotland’s public services is at the core of the Government’s programme. These are the necessary


foundations for tackling inequalities, building a fairer and stronger Scotland, and ensuring the long-term financial health of our public services.

These ambitious goals cannot be achieved by government or public services alone. Success depends on making the most of the ingenuity, creativity and dynamism of the people and communities of Scotland.

The Scottish Government’s way of working is built on listening, engaging and responding to people’s needs and aspirations, building on the assets of communities and individuals. In every area of policy, government is strengthening opportunities for partnership — across the whole of the public sector, with the business community and with wider civic society — so that all of Scotland can flourish.

Scotland continues to pioneer new and more effective approaches to government that leave behind outdated bureaucratic thinking in silos, and instead promote collaboration, civic partnership, local initiative and, above all, focus on achieving better outcomes for the people of Scotland. Crucially, this involves a shift towards more preventative and anticipatory approaches that improve outcomes and value for money. The success of Scotland’s substantial programme of public service reform and of our outcomes-focused approach, both of which began in the last Parliament, is now attracting keen interest from other administrations.

Government Economic Strategy

Our Government Economic Strategy establishes the framework for delivering the Government’s Purpose, and identifies our priorities for accelerating recovery, driving sustainable growth, boosting employment and tackling inequality.

In light of the marked changes in economic conditions since 2007, we took the opportunity to refresh the Strategy in September 2011 in order to provide added focus toward new and emerging growth opportunities for the Scottish economy. This has been particularly beneficial in the light of the continued fragile global economic position. Our actions in support of these priorities have helped to support the Scottish economy during the toughest economic conditions in over a generation. They have ensured that Scotland experienced a shallower recession during 2008 and 2009 compared to the UK, whilst employment rates in Scotland have now remained above the UK for the twenty-second consecutive month of labour market statistics.

We have also seen welcome improvements in key indicators of progress. For example, despite the difficulties in the Euro Area — which accounts for 45 per cent of our international exports – Scottish manufactured exports increased by 4.2 per cent over the year to 2012 Q1; there have been particular successes in the export performance of the whisky and food sectors where by the end of 2011 the value of exports had increased by 50 per cent and 63 per cent respectively since 2007; there has been strong performance in Scotland’s tourism sector with a five per cent increase in total tourism visits in Scotland over the year to March 2012; Ernst & Young’s UK Attractiveness Survey showed that, in terms of job creation, Scotland maintained its position as the leading part of the UK for foreign direct investment in 2011; and over the past year, Scotland has seen significant investment from a range of major international companies.


We published a progress report on 10 September 20121 which provides an update on the series of actions which are being taken forward across the public sector in order to deliver the ambitions of the Government Economic Strategy.

OUR PRIORITIES

This Draft Budget gives effect to our clear vision for Scotland, as set out in the Programme for Government and the Government Economic Strategy. Our spending proposals underpin our commitment to driving Scotland’s economic recovery, and to increasing the shift to more preventative approaches that will improve outcomes for people directly and in years to come.

We have again ensured that equality has been built into the development of this Draft Budget. The approach we have taken and the assessment of the main equality impacts of our spending plans are outlined in the accompanying Equality Statement.

Action to support recovery

In order to mitigate the impact of the ongoing uncertainty in global economic conditions and accelerate economic recovery, our immediate priorities are:

● boosting public-sector capital investment;

● taking direct action to tackle unemployment, in particular youth unemployment; and

● enhancing economic confidence by encouraging private sector investment and providing security to Scottish households.

Capital investment

Capital investment continues to be a central element of our approach to supporting economic recovery.

Whilst the economic recovery remains fragile, shovel-ready capital investment by the public sector can provide an immediate stimulus and protect jobs and output, as well as providing long-term benefits through the creation of assets. For example, our capital acceleration programme, launched in January 2009, which has supported schools, homes, transport projects and economic infrastructure, is estimated to have supported over 5,000 jobs across the Scottish economy.

In particular, capital investment provides support to output and employment in the construction sector. The recent decline in Scottish output — with the Scottish economy returning to a technical recession following two consecutive quarters of declining output of 0.1 per cent — was driven entirely by the construction sector. That is why we have boosted capital investment to the greatest extent possible within the powers available to us. As Figure 2 illustrates, despite the reduction the UK Government has made to our capital DEL budget — a 33 per cent real-terms reduction between 2010-11 and 2014-15 — we are maintaining investment in Scotland at over £3 billion annually through a range

1 www.scotland.gov.uk/Resource/0040/00401529.pdf


of innovative approaches — switching funding from resource budgets to support capital spending, using the Regulatory Asset Base (RAB) and taking forward the non-Profit Distributing (nPD) pipeline of infrastructure projects.

Figure 2: Total capital investment

In June 2012 we announced a £105 million capital investment package to support new investment and accelerate projects from future years to boost the economy2. This is being funded through a combination of prudent financial management, further use of the budget exchange mechanism, accelerated funding from future years and drawdown of Scotland’s Fossil Fuel Levy surplus. As well as providing support for the construction industry and the wider economy, these measures are delivering benefits for key industries including renewables, tourism, transport and housing.

We are continuing to pursue innovative approaches to financing capital investment:

● through the groundbreaking national Housing Trust initiative (nHT), which we will continue to expand, a Scottish Government guarantee of less than £2 million generates around £100 million of investment in the construction of affordable homes;

● in conjunction with the European Commission and European Investment Bank we have launched ‘Spruce’, Scotland’s £50 million JESSICA3 fund to assist the delivery

2 Adjustments relating to shovel-ready projects will be made at Autumn Budget Revision.3 Joint European Support for Sustainable Investment in City Areas


of regeneration projects in Scotland. The first investments are expected later in 2012;

● we will continue to progress the £2.5 billion nPD pipeline of investment, with the first community health project now in construction — the Aberdeen Community Health and Care Village — and four major projects having entered the procurement process — the City of Glasgow, Inverness and Kilmarnock Colleges and the M8 M73 M74 Motorway network Improvements;

● this Draft Budget confirms that we will add to our delivery programme in this Spending Review period by accelerating through the nPD pipeline an additional £80 million of investment in the school building programme originally planned for 2015-16 and 2016-17 into 2014-15; and

● we will progress the Tax Incremental Financing pilots that have already been given approval in Leith and approval in principle in Ravenscraig and the Buchanan Quarter, and expect also to be progressing pilots in Argyll and Bute, Fife and Falkirk, following consideration of their business cases later this year.

We are also maintaining a focus on strategic capital investments — including the Forth Replacement Crossing, the new South Glasgow Hospitals, and the Scottish Schools for the Future programme — as set out in our Infrastructure Investment Plan4, which we published in December 2011. This provides clear direction on our long-term capital investment plans, and gives confidence and certainty to the private sector.

In this Draft Budget we are maintaining the delivery of the investment plans set out in the Spending Review, continuing to maximise capital spending as far as possible. Within the financial constraints that we face:

● we will add nearly £250 million to capital budgets through switching resource to capital in 2013-14;

● we have set out that a £180 million construction, skills and green economy investment package will be made available in 2012-13 and 2013-14 to support a range of measures that will support our climate change objectives and create jobs; and

● we will use additional resources, amounting to £141.9 million in 2013-14, to deliver more affordable homes, digital broadband in rural areas, sustainable travel, improvements to the A75 and A77, design work for future improvements to the A82, A90 and A9, and maintenance of our health, cultural and other assets.

Yet under the current constitutional settlement, we are constrained in our ability to protect the Scottish economy, and we have repeatedly called on the UK Government to do more to support jobs and growth through a targeted and cost-effective direct stimulus to shovel-ready capital projects. We welcomed the Barnett consequentials from last autumn’s UK budget statement, but these have only moderated slightly, to

4 www.scotland.gov.uk/Publications/2011/12/05141922


33 per cent, the real-terms reduction that the UK Government is making to the Scottish Government’s capital DEL budget over the Spending Review period. And we have argued, without success, with the UK Government for earlier access to the modest borrowing powers that the Scotland Act 2012 proposes should begin in 2015.

Supporting people into employment

As witnessed across many advanced economies, a key feature of the downturn has been the rise in unemployment, particularly among young people.

We are taking direct action to support employment and ensure that people who are out of work or under-employed — particularly young people — have access to the right training, skills or education opportunities.

The percentage of young people in employment (for the population aged 16-24) increased by 1.0 percentage points to 54.8 per cent over the year to May-July 2012, and Scotland’s youth employment rate remained higher than the UK rate of 51.0 per cent. However, Scotland’s youth unemployment rate remains too high at 24.3 per cent in May-July 2012 — although it should be noted that the most recent data available for detailed analysis showed that 23 per cent of those classified as unemployed were enrolled in full-time education.

In December 2011, the First Minister appointed the first dedicated Minister for Youth Employment anywhere in the UK. This brings a focus to the critical issue of supporting youth employment, which is being taken forward through the Scottish Government’s youth employment strategy, Action for Jobs — Supporting Young Scots Into Work.

Our actions include:

● ensuring, through Opportunities for All, launched in April 2012, that every 16-19 year old not already in work, education or training is offered a learning or training opportunity;

● committing additional funding of £17 million in 2013-14 for student support and college places;

● supporting 25,000 Modern Apprenticeship opportunities in each year of the current Parliament, with the majority targeted at young people;

● a new employer initiative that will create up to 10,000 opportunities for SMEs to recruit young people;

● providing an additional £30 million budget to support youth employment over the three-year period to 2014-15, which included £6 million to support Community Jobs Scotland, £9 million to support the six local authority areas with the highest levels of youth unemployment in 2012-13, and a further £6 million to be invested in both 2013-14 and 2014-15;


● using our European Structural Funds programmes to support our young people, and ensuring that up to £25 million of European Funding is directed towards youth employment; and

● protecting the Education Maintenance Allowance (EMA) by providing £31.6 million per year to provide vital financial support to our most vulnerable young people, to enable them to continue in education and learning beyond school leaving age.

The Scottish Government acknowledges the barriers to women’s full participation in the labour market, which have been made more difficult by the current financial situation. Helping more women into work and to reach their full potential once there is vital to the success of our economy.

The Scottish Government recently held a women’s employment summit in conjunction with the Scottish Trades Union Congress (STUC), to enable joint action to support further progress.

We will build on this dialogue, taking forward work to encourage more young women into science and engineering, looking at the opportunities for women in key industries such as renewables and IT, and tackling underlying issues of gender inequality.

Enhancing Economic Confidence

As the Government Economic Strategy makes clear, the key to unlocking Scotland’s economic potential will be a strong recovery in the private sector.

However, private sector investment remains constrained, with UK business investment in 2012 Q2 estimated to be nearly 16 per cent below pre-recession levels. The latest Scottish Government Access to Finance survey, published in June 2012, highlights that challenges remain — particularly for small- and medium-sized enterprises (SMEs) — in the demand for, and supply of, finance.

We are therefore continuing to take action to encourage private sector investment and growth, including building on our strong inward investment record.

We also recognise that Scottish households continue to face uncertainty, particularly as incomes continue to fall in real terms and labour market conditions remain challenging. That is why we are also continuing to pursue a range of actions to provide greater economic security to households.

Our key priorities to enhance economic confidence include:

● retaining the Small Business Bonus Scheme, which has reduced business rates taxation for 85,000 Scottish enterprises, and remaining committed to matching the English poundage;

● continuing to support equity investment schemes and leveraging private sector investment, through the Scottish Investment Bank. The £113 million Scottish Loan Fund, introduced by the Scottish Investment Bank, supports growth and exporting companies to access loans from £250,000 to £5 million;


● our prudent approach to public sector pay and our policy of no compulsory redundancies, which aims to provide modest increases in basic pay following a two-year pay freeze while continuing to bear down on total costs and support thousands of public-sector jobs across Scotland; and

● in recognition of the challenges faced by households in these tough financial times, continuing implementation of our core economic and social commitment through the Social Wage, including: no prescription charges, freezing Council Tax, free higher education and free personal care.

Delivering Sustainable Economic Growth

Alongside our actions to support recovery, we are continuing to put in place the conditions to foster sustainable economic growth over the long term.

The Government Economic Strategy identifies six strategic priorities, which represent the broad policy drivers and our desired characteristics of sustainable economic growth. These priorities continue to inform our policy and spending decisions, and we are taking forward a range of actions to deliver against these ambitions.

Strategic Priorities for Delivering Sustainable Economic Growth

● Supportive Business Environment;

● Transition to a Low-Carbon Economy;

● Learning, Skills and Wellbeing;

● Infrastructure Development and Place;

● Effective Government; and

● Equity.

In order to maintain and further invest in a Supportive Business Environment, which is focused on growth companies, growth markets, and growth sectors, we have:

● retained Scotland’s Enterprise Bodies — in contrast to other parts of the UK where they have been abolished — and ensured that they are focused on growth and recovery;

● established four Enterprise Areas comprising 14 strategic sites, which are now open for business. The sites offer clear, realisable opportunities for some of Scotland’s most dynamic industries and provide a range of incentives, including £6 million in 2013-14 to fund business rates relief, to encourage private investment, boost economic growth and stimulate job creation;

● through Business Gateway services, which are delivered by local authorities and are available across Scotland, assisted new and growing businesses on aspects such as raising finance, business efficiency and cash flow.


● introduced the £45 million per annum SMART:SCOTLAnD fund in order to increase business innovation, and ensure that the interventions offered to businesses and universities are better aligned;

● established a £7 million Cities Investment Fund to support the work of the Scottish Cities Alliance and accelerate the pace of investment in Scotland’s cities;

● continued to encourage the development of Scotland’s growth sectors — which reflect Scotland’s distinctive capabilities, comparative advantages and unique natural assets, and offer particular opportunities for growth — to build on recent successes in areas such as tourism and food and drink; and

● through Scottish Development International (SDI) and its partners, continued to work to attract new inward investment, and are currently on track to deliver the target set in Scotland’s International Trade and Investment Strategy of 25,000-35,000 planned jobs through inward investment between 2011-2015.

A key driver for Scotland’s economic recovery will be the Transition to a Low-Carbon Economy. Promoting environmental and resource sustainability, reducing our levels of waste and achieving a significant reduction in our greenhouse-gas emissions will be drivers for delivering growth and benefits for all over the long term. Independent research estimates that there are currently 70,000 people employed in the low-carbon economy; this could rise to 130,000 by 2020.

We will invest substantial resources in 2013-14 on a range of advice and financial support measures supporting energy efficiency for householders and SMEs across Scotland. This includes establishing Resource Efficient Scotland, an integrated resource efficiency advice and support service and targeted sectoral programme, through which we will further strengthen support to business and the public sector. This will help organisations across Scotland to realise potential annual savings worth up to £85 million through the implementation of resource efficiency measures.

A key aspect will be the further development of the renewable energy sector. The economic benefits of Scotland’s vibrant renewable energy sector are illustrated by recent industry estimates that the sector now employs over 11,000 people in Scotland and that renewables projects representing £750 million of investment were switched on in Scotland in 2011. Offshore wind alone could bring an estimated £30 billion of inward investment into Scotland. The offshore wind industry could support up to 28,000 directly related jobs and a further 20,000 indirect jobs in Scotland, generating up to £7.1 billion for the Scottish economy by 2020.

As previously announced, £103 million of the Fossil Fuel Levy surplus will be used to set up the Renewable Energy Investment Fund (REIF) to support the promotion of energy from renewable sources in Scotland. The REIF, which will be launched in late autumn 2012, will look to provide appropriate equity investment, loans or guarantees which will enable projects to secure wider investment from the private sector. REIF will initially focus on supporting wave and tidal developers to accelerate the development and deployment of array projects in Scottish waters, on supporting Scottish communities


to develop their own local renewable projects, and on supporting renewable district heating networks in Scotland.

Our actions in support of this priority include:

● our ambitious, world-leading statutory climate-change targets which, as the experience of 2010 showed, are challenging to achieve. However the Scottish Government remains fully committed to this agenda and delivering the emissions cuts necessary to bring about a low-carbon future. Later this year, we intend to publish a second report on proposals and policies (RPP2) to set out ways in which the second batch of annual targets (for 2023-27) can be met;

● driving the growth of renewable energy in Scotland through the new £103 million Renewable Energy Investment Fund;

● supporting the delivery of our national Renewables Infrastructure Plan, through our £70 million national Renewables Infrastructure fund;

● consulting on our Sustainable Housing Strategy, which will map a path to 2030 for high-quality, warm, affordable, low-carbon homes and a housing sector that will help to establish a successful low-carbon economy across Scotland; and

● developing a national Retrofit Programme to transform Scotland’s ageing houses into energy efficient homes. We are working with energy companies to identify around £200 million a year to support this programme to upgrade Scotland’s housing stock, tackle fuel poverty and reduce carbon emissions.

Scotland has a broad range of excellent education and training capability in the energy sector across many institutions, but we recognise that we need to do more. We are committing in this budget to establish a new Scottish Energy Skills Academy, drawing on the world-class Energy Technology Partnership which operates within our universities and the dynamic Scotland’s Colleges Energy Skills Partnership. We welcome the proposal to take this forward advanced by the University of Aberdeen, the Robert Gordon University, Aberdeen College and Banff and Buchan College, and will work with these institutions on developing this initiative. Increasing collaboration with employers of all sizes across the energy sector, the Academy will coordinate work across Scotland’s wide network of energy and skills centres, and with other providers and partners, to offer services and solutions relevant to industry needs, stimulating interest in and increasing the flow of talent into and across the sector. Supported by the Government’s skills and enterprise agencies, the Academy will seek to maximise the impact of available resources and stimulate employer investment in skills.

Our Strategic Priority on Learning, Skills and Wellbeing acknowledges the importance of a skilled, educated and healthy workforce. Our actions in support of this priority include:

● investing significant sums in higher education over the period of the Spending Review, whilst maintaining free access to higher education by ensuring that the opportunity to learn is based on ability to succeed, not the ability to pay. Our support for universities, when taken together with our changes to fee


arrangements for students from the rest of the UK and a series of measures to improve efficiency across our institutions, will ensure that we maintain a university sector that is internationally competitive and truly excellent in world terms;

● setting out in the Post-16 Education Bill our ambitious reform programme of post-16 education to ensure that there is a system-wide focus on jobs and growth which is more responsive to, and aligned with, the demands of business; and

● continuing to invest in the school estate across Scotland, to reduce the number of children in crumbling schools by half again during this Parliament and, working with local authorities through the £1.25 billion Scotland’s Schools for the Future programme, we will shortly announce support for a further 30 schools from the third and final phase of the programme. This is in addition to the 37 school building projects already announced, meaning that, when complete, the programme will have delivered 67 new schools — 12 more than originally planned when the programme was announced in 2009.

Our focus on Infrastructure Development and Place harnesses the strength and quality of Scotland’s cities, towns and rural areas and promotes the digital economy. Our actions in support of this priority include:

● setting out, in January 2012, in Scotland’s Digital Future — Infrastructure Action Plan, our commitment to a world-class, future-proofed infrastructure that will deliver digital connectivity across the whole of Scotland by 2020. The plan sets out three distinct but aligned infrastructure programmes, underpinned by over £240 million in public funding;

● launching a package of proposals to simplify and streamline planning processes and drive improved performance, including opening discussion on the third national Planning Framework;

● setting out in December 2011, in our Regeneration Strategy, our approach on how we can work towards achieving our vision of a Scotland where all places are sustainable and people want to live, work and invest. This is supported by a range of interventions, including a £24 million People and Communities Fund and a Capital Investment Fund worth £150 million over three years; and

● committing to increasing the supply of housing across all tenures, to provide homes for our growing population and to boost economic recovery through the construction industry. We have pledged to deliver 30,000 affordable homes over the five-year term of this Parliament, including 20,000 social homes of which at least 5,000 will be council homes. In the first year we delivered 6,882 new affordable homes, including 5,652 social homes. In the next three years we will invest £730 million in new affordable housing to keep this pledge on track, and we will provide higher levels of subsidy to new developments with reduced carbon emissions.


Effective Government is critical to the successful implementation of the Government Economic Strategy. To ensure that the actions of the public sector are fully coordinated and aligned in order to maximise Scotland’s potential we:

● have established a clear expectation that all public sector bodies deliver annual efficiency savings of at least three per cent over the course of the current Spending Review period;

● delivered a three per cent efficiency saving across Scottish Government central spending in 2011-12, whilst fulfilling our commitment to staff to maintain a policy of no compulsory redundancies;

● will bring forward a Better Regulation Bill this year to further improve the way regulations are applied in practice across Scotland; and

● will introduce a Sustainable Procurement Bill this year, which will set out how we will maximise the contribution of public procurement to the economy.

In the current financial context and recognising the substantial progress the public sector has made in generating efficiency savings as part of routine business, the burden of reporting to the Scottish Government has been lightened. All public bodies will continue to produce a statutory statement of the efficiency savings obtained through their improvement actions. The Scottish Government no longer produces a consolidated efficiency outturn report for the whole public sector, but now reports against its own central spending (fiscal resource and capital DEL not distributed to public bodies).

As well as being a desirable outcome and a characteristic of growth, Equity — social, regional, and inter-generational — is also a key driver of growth and jobs. Our actions in support of this priority include:

● implementing a shift towards preventative spending, including the commitment of over £500 million for three change funds over the three years to 2014-15;

● expanding early learning and childcare provision, with the 2013 Children and Young People’s Bill including an extension to the level of free early learning and childcare from 475 hours per year to a minimum of 600 hours;

● taking forward a range of actions to support the development of an enterprising third sector in Scotland including the £3 million Just Enterprise programme which supports social enterprise by ensuring provision of support from start-up to business maturity;

● investing in programmes to tackle inequality and discrimination; and to increase the capacity of communities; and

● recognising the vital role of social housing in providing people with an affordable home and a platform for getting on in life — and in particular, we are working closely with our local authority partners and others to meet the December 2012 homelessness target which will mean that all unintentionally homeless people will have the right to settled accommodation.


An enterprising third sector has an important role to play in our economic success, in public service delivery and social wellbeing. We continue to invest in its growth and development and to strengthen the infrastructure, capacity, skills, market and investment readiness of the sector.

PROGRESS ON RENEWING PUBLIC SERVICES

Informed by the Christie Commission on the future delivery of public services, our spending plans for Scotland published last September marked a step change in renewing the public services vital to our people and economy.

Our approach is one characterised by prevention rather than reaction, by much closer integration and responsiveness of services at the local level, by a performance culture which values rigour, transparency and honesty to drive improvement and by a workforce supported to make the maximum use of its skills, judgement and local knowledge to help achieve the outcomes that matter most to people. Above all, it is about how those who deliver services work with individuals and communities to deliver improved outcomes.

Over the last year, the Scottish Government has built on its track record of competence and achievement in public service reform by continuing to take decisive action to drive change, cut out waste and create the conditions for better local collaboration and innovation at the front line.

Preventative spending

In the 2011 Spending Review, the Scottish Government made clear that a decisive shift to preventative spending sat at the heart of its approach to the provision of public services. This Draft Budget provides an update on progress and reinforces that commitment.

The three change funds illustrate the progress towards prevention, driving change in mainstream service delivery. We have been working closely with partners across the public, third and independent sectors to progress this agenda, aligned with our work on embedding quality improvement in design and delivery of our services, which promotes a three-step improvement framework to assist delivery partners in driving transformational change in public services. Delivery partners still need to invest more in prevention, shifting further away from the historical heavy balance of investment toward crisis management — both to provide an alternative course to support longer and healthier lives with improved opportunities, and to live within the means of reducing budget settlements.

Despite the wide consensus on the need for preventative approaches, the choices that are made in practice too often default to dealing with problems as they occur. To inform better choices, we are focusing on the three key scenarios below to test the benefits that can be achieved across different services.


(i) Investing in the activities we know will reduce future demand on public services and improve outcomes

The change funds are being used to support actions that we know, from assessment of the existing evidence base and of local needs, will give the best chance of success.

Evidence shows, for example, that a failure to intervene effectively to address the complex needs in the early years of an individual’s life can result in a nine-fold increase in direct public costs over the long term, when compared with an individual who accesses only universal services. We also know that Family nurse Partnerships can reduce the time a woman spends in post-natal wards and the time babies spend in special care baby units, and will ultimately have some impact on the rest of the public-health nursing workforce in terms of supporting the children of vulnerable, young, first-time mothers in their earliest years.

In driving the strategic direction of early years policy, the Early Years Taskforce5 is shifting the balance of public services towards early intervention and prevention, and to sustain this change in future years.

Applicants to the Reducing Reoffending Change Fund will be asked to demonstrate that their mentoring schemes are consistent with best practice. Evidence suggests that mentoring is a promising intervention with the potential to reduce reoffending in the longer term.

(ii) Evidencing success in reducing future need and improving outcomes

Monitoring processes are being developed and put in place for each of the three change funds, including an assessment of their impact on improving outcomes and reducing the demand for acute services over time.

One way the impact of the Reshaping Care for Older People Change Fund is being monitored is through Talking Points, an approach that focuses on assessing the outcomes important to the individual, planning how they will be achieved and reviewing the extent to which they have been attained.

Talking Points has found that there have been improvements in personal outcomes for both service users and their carers, including reduced isolation, people feeling satisfied with their involvement in design of care package, and carers feeling more confident and able to continue caring.

(iii) Controlling costs and releasing savings

It is crucial that delivery partners develop an understanding of where and how they can control costs and release savings, as well as improving outcomes.

A central tenet of the Reshaping Care for Older People Change Fund is that it releases resource currently tied up in institutional models of care, to support preventative and upstream interventions and to provide more appropriate support for older people — thereby addressing increasing need linked to demographic profiles in Scotland. Although

5 The Early Years Taskforce is jointly chaired by Scottish Government, health and local government, and involves elected politicians, practitioners and experts from the statutory and voluntary sectors.


this is best viewed as a longer-term aspiration, some local partnerships have begun to report early improvements from their change fund interventions, including:

● reductions in rates of emergency admission and reductions in bed days for people over 75 years old;

● decrease in emergency admissions from care homes;

● reduction in bed days lost due to delayed discharge; and

● an increase in the proportion of home-care clients receiving home care in the evenings and through the night.

For example, in City of Edinburgh Council, the fund has provided additional resource to roll out a pilot care pathway, which has resulted in reduced length of stay, by several days, for orthopaedic patients, and early return home, with people able to access home-based re-ablement and rehabilitation services. The average length of stay for orthopaedic patients has been cut by a third to 14 days, and hospital stays of stroke patients by two-thirds.

Embedding preventative approaches

Embedding a preventative approach in decision-making about programmes and budgets at a local level is key to ensuring the effectiveness of the approach in practice. Community Planning Partnerships (CPPs), which bring together local authorities and wider public service providers, the third sector, the private sector and local communities, are central to this process.

CPPs have already been asked to ensure that a decisive shift to a preventative approach is embedded in the Single Outcome Agreements (SOAs) which they agree with the Government. This expectation has been reaffirmed in the review of Community Planning and SOAs recently undertaken in partnership between the Government and COSLA.

CPPs must drive forward the collective local approach to prevention, and new SOAs to be agreed with Government next year will have to show how prevention will be prioritised and report on progress in implementation in the future. The national group for Community Planning established under the review will provide further guidance and leadership, so that SOAs incorporate long-term prevention plans which quantify the resources allocated to prevention and make a commitment to increase the resource invested and reinvested over time.

Social investment

The Scottish Government is committed to piloting new models of social investment, to secure greater resources to support the shift to prevention. Government grants in relevant policy areas will be made where appropriate in presumption of supporting preventative activity and easing future demand for grant-supported activity.

We are in discussion with a range of partners, including investors, service providers and commissioners, to explore learning from emerging investment mechanisms. Our aim is to maximise the potential offered by increasing fiscal responsibility to encourage and


align investment from individuals, charitable funders and commercial bodies towards prevention.

As well as prevention, we have also taken significant actions in relation to the other pillars of public service reform — outlined below — to create the conditions for financially sustainable and effective public services.

Integrated local services

In driving forward the greater integration of local public service, we have:

● completed a review with COSLA of Community Planning and agreed a set of actions to strengthen it, based on the principles of public service reform, so that it will more effectively drive achievement of better local outcomes;

● consulted on legislation to drive the integration of health and social care provision to improve care for adults, particularly older people, and provide a more joined up service between health and social care and a more effective use of resources across the system;

● put in place the foundations for a major restructuring of Scotland’s further education colleges into 13 regional colleges, improving their ability to work with partners, plan and deliver more efficient services;

● launched a consultation on a proposed new Community Empowerment and Renewal Bill to strengthen opportunities for communities to take independent action to achieve their own goals and aspirations and have a greater say in what is delivered in their areas by the public sector;

● worked with justice partners to deliver improvements to the processes of the justice system, court structures and a new tribunal system as part of the Making Justice Work programme, which has been established to create a fairer, accessible and efficient justice system and deliver savings of up to £10.4 million per year from 2012-13; and

● started operation of a new justice hub system which enables the identification of people due in court who are already in prison, facilitating their court attendance. This will increase the number of cases that can go ahead as planned and reduce inconvenience for victims and witnesses. The system won the Scotland IS Public Sector Award for 2012.

Workforce and leadership

To support the development of the people whom we need to deliver public services in this challenging financial climate, we have:

● established national leadership arrangements that reflect our shared commitment across the public sector to building collaborative leadership capacity and driving forward workforce development;


● implemented the Scottish Living Wage through Scottish Public Sector Pay policy 2012-13;

● supported the Scottish Leaders Forum Workforce Development Group in revising its aim and purpose to ensure it is aligned with broader work on public service reform. The Group is in the process of agreeing priority workstreams; and

● worked with nHS Education Scotland on a series of workshops on workforce development across public service organisations, with a colloquium planned in november.

Improving performance

To ensure that we develop greater performance in the delivery of public services, we have:

● passed legislation to create a single Police Service of Scotland and a Scottish Fire and Rescue Service — to protect and improve local services despite financial cuts, create more equal access to specialist support and national capacity and strengthen the connection between services and communities, supported by recurring cashable savings from 2016-17 in excess of £130 million;

● worked with partners to provide a common framework for improving how public services deliver for Scotland and refreshed the national Performance Framework to further enhance public accountability and sharpen the focus on the delivery of better outcomes for people;

● published a new national strategy, Scotland’s Digital Future — Delivery of Public Services, to help create more people centred, responsive public services and to lever increasing return on investment through a more joined-up approach to procurement, integration and use of ICT across public services;

● agreed a new harmonised reporting and planning approach with Alcohol and Drug Partnerships across Scotland to focus effort on shared outcomes, stronger local partnerships, joint accountability and the culture of continuous improvement and ensure a focus on alcohol and drug prevention, support and treatment in the context of recovery;

● introduced new regulations to support the public sector in improving its delivery on equality; and

● introduced the Social Care (Self-directed Support) (Scotland) Bill to Parliament to underpin the national Strategy. This is backed by £39 million over three years to support the transformation of social care. Through increased choice and control, more people will be able to tailor support to their needs, delivering value for money and better personal outcomes.

While much has been achieved, there is no room for complacency in the year ahead if we are to continue the step change in effectiveness and efficiency we must achieve


across all public services. We will continue the successful programme of simplification, looking for further opportunities to streamline our public bodies. And we will continue to identify ways to reduce costs and bureaucracy and improve service delivery.

LOOKING TO THE FUTURE

The continuing challenges of the financial and economic climate highlight the urgent need for reform of the financial powers of the Scottish Parliament, so that major economic decisions affecting Scotland can be made in Scotland by people with Scotland’s vital interests at heart. We therefore need major change to give the Scottish Parliament and the Scottish people a greater and more direct stake in the economic performance of Scotland.

The new powers for Scotland in the Scotland Act 2012 are a welcome although modest first step on this further journey of constitutional change. Work is already well under way to prepare to use the limited new powers for the benefit of the people of Scotland. However, in the Scottish Government’s view, the Act is a missed opportunity to enhance the tools available to the Scottish Government to improve Scotland’s economy, create jobs and invest in services, as proposed by the Scottish Government and the Scotland Bill Committee of the Scottish Parliament.

Under the Act’s provisions, the Scottish Parliament will only be responsible for about 16 per cent of taxes raised in Scotland, leaving 84 per cent controlled by Westminster. Key elements of public spending such as welfare will remain in the hands of Westminster, as will important powers over business and the economy. Borrowing will be strictly limited and subject to the Treasury’s approval. These limitations cut across the aspirations of the people of Scotland — that is clear from the result of the 2011 elections to Holyrood; and from all the opinion poll and survey evidence. Already, all political parties, civic groups and the Scottish public have looked beyond the Bill to the real debate on Scotland’s constitutional future, led by the Scottish Government, and the referendum planned for autumn 2014.

We want to see a future Scotland where key decisions about revenue-raising and priorities and directions for public investment are made here, by and for the people of Scotland. Tax and spending policies would be shaped to play to Scottish strengths and encourage higher levels of business investment, employment and productivity. For example, by progressively reducing the Corporation Tax rate in Scotland, we could encourage businesses to locate and expand here, with beneficial effects on employment and economic activity. But it is also clear that devolution of Corporation Tax is not on offer from the UK Government. Constitutional change would be necessary.

It is clear that our preference is for independence. This would place Scotland on the same footing as other successful independent nations and allow us to take decisions in the best interests of our economy and the people of Scotland. We could then get ahead with creating the conditions in which business can prosper, providing secure, well-paid work and generating the tax revenues needed to provide the innovative public services that people in Scotland want.

CHAPTER 2 Portfolio Plans

This section of the document provides greater detail on the Draft Budget for 2013-14, for all portfolios. The Draft Budget for 2013-14 will, subject to Parliamentary consideration, form the basis of the Budget Bill 2013-14 which will be laid before the Scottish Parliament in January 2013.

2013-14 SPENDING PLANS

The Scottish Government’s Total Managed Expenditure (TME) amounts to £34,190.5 million in 2013-14, including the Departmental Expenditure Limit (DEL) of £28,538.1 million.

Table 2.01 Total proposed budget for 2013-14

2013-14 Draft Budget

DEL resource

£m

DEL capital

£m

DEL total

£m

AME &

Other £m

Total

£m

Health and Wellbeing 11,469.3 408.5 11,877.8 100.0 11,977.8

Finance, Employment and Sustainable Growth 421.0 111.1 532.1 2,827.6 3,359.7

Education and Lifelong Learning 2,496.5 108.8 2,605.3 289.8 2,895.1

Justice 2,466.5 80.1 2,546.6 – 2,546.6

Rural Affairs and the Environment 480.1 41.0 521.1 – 521.1

Culture and External Affairs 223.8 17.0 240.8 – 240.8

Infrastructure, Investment and Cities 1,238.8 1,085.9 2,324.7 – 2,324.7

Administration 201.8 5.1 206.9 – 206.9

Crown Office and Procurator Fiscal Service 104.5 3.6 108.1 – 108.1

Local Government 6,957.1 522.1 7,479.2 2,435.0 9,914.2

Scottish Government 26,059.4 2,383.2 28,442.6 5,652.4 34,095.0

Scottish Parliament and Audit Scotland 92.5 3.0 95.5 – 95.5

Total Scotland 26,151.9 2,386.2 28,538.1 5,652.4 34,190.5

All figures are in cash terms and are presented on a full resource basis, and include depreciation and impairment charges where appropriate.

The AME figure is lower than the estimate made in the Spending Review because the Scottish Public Pensions Agency (SPPA) have updated Annually Managed Expenditure (AME) forecasts for 2013-14 in respect of NHS and Teachers Pension Schemes.


COMPARATIVE SPENDING

In order to ensure a transparent, like-for-like comparison with previous years, the tables throughout this document show the figures that were included in Draft Budget 2012-13 alongside the Draft Budget 2013-14 proposals. Since Draft Budget 2012-13 was published, these figures have been agreed in the 2012 Budget Act. A number of further changes were announced at Stage 3 of the Budget Bill that will be formally presented to Parliament for approval at Autumn Budget Revision in October.

Ministers have subsequently announced a number of further enhancements to the 2012-13 budget, which will also be presented to Parliament in the Autumn Budget Revision. These changes have been designed to ensure a substantial economic stimulus, mainly through investment in infrastructure. They include the measures announced as part of the economic stimulus announced in June 2012.

The figures for 2014-15 shown in this document are the figures published in the 2011 Spending Review, amended only to show consequentials announced by the UK Government, and other agreed zero-sum inter-portfolio transfers. They do not reflect any decisions taken about proposed spending adjustments for 2014-15, since these would be the subject of the 2014-15 budget process starting in autumn 2013.

The figures shown in this document have been adjusted to reflect the changes to the Scottish Government’s portfolio structure announced on 5 September 2012. These changes include the combining of what were the Infrastructure and Capital Investment portfolio and the Parliamentary Business and Government Strategy portfolio into the new Infrastructure, Investment and Cities portfolio, and the consolidation of welfare-related spending into that new portfolio.

In order to aid comparison with previously published spending plans, Annex D ‘Comparison 2008-09 to 2014-15’ provides a presentation based on the new portfolio structure.

SCOTTISH VARIABLE RATE

The Scottish Government confirms that it will not use these tax-varying powers.

REAL TERMS fIGuRES

Real-terms figures have been calculated using the latest estimated GDP deflators published by HM Treasury of 2.5 per cent in both 2013-14 and 2014-15.

CHAPTER 3 Health and Wellbeing

PORTFOLIO RESPONSIBILITIES

The Health and Wellbeing portfolio is responsible for helping people to maintain and improve their health and wellbeing, especially in disadvantaged communities, and for delivering high-quality health and social care. Our remit also includes tackling discrimination, promoting equality and sport.

SUPPORTING RECOVERY AND INCREASING SUSTAINABLE ECONOMIC GROWTH

The Scottish Government remains committed to publicly funded healthcare services for the people of Scotland which contribute directly to growth in the Scottish economy by ensuring that the people of Scotland live longer, healthier lives through providing high-quality health and social care and by focusing on prevention and early intervention to reduce key health risk drivers of premature mortality, such as alcohol misuse, smoking, mental illness, poor mental wellbeing, cardiovascular disease and cancer. NHSScotland also makes an important and direct contribution to economic growth through the significant investment in world class research and development in medical/life sciences technology and innovation.

In a time of continuing financial constraint the overall context will be the Scottish Government’s Strategic Narrative and the Quality Strategy for NHSScotland and, in particular, the agreed direction of travel set out in “2020 Vision” for sustainable high-quality healthcare. The Quality Strategy sets out how we plan to make NHSScotland a world leader in healthcare quality, providing person-centred, clinically effective and safe healthcare services.

The mutual NHSScotland does not seek to promote competition. In Scotland, high-quality health provision is ensured by a variety of other means, including efficiency and productivity initiatives centrally and in each NHS Board.

We are committed to investing in NHSScotland infrastructure. During 2012 a number of major projects have been completed on time and on budget. In January the full transfer of services at the £170 million Public Private Partnership (PPP) funded Victoria Hospital in NHS Fife took place. Work on the £90 million diagnostic laboratory building at the Southern General site in Glasgow was completed in April and work continues on the adult and children hospitals on the site as part of the £842 million New South Glasgow Hospitals project.


In June 2012 the publicly funded new £46 million Royal Victoria Hospital in NHS Lothian was opened which was designed to provide 100 per cent single rooms to promote privacy and dignity and reduce the risk of infection. Also in June the reprovision of the State Hospital was completed at a cost of £90 million. In July 2012 NHS Lanarkshire opened the £27 million Airdrie Community Health Centre bringing together eight GP practices and providing access to a range of primary care and other community-based services for up to 50,000 patients.

Learning and building on the experience of the London 2012 Olympics, the Glasgow 2014 Commonwealth Games will have an impact beyond the 11 days of sporting competition in 2014. Over £1 billion of investment in infrastructure for Games venues and associated transport networks has been stimulated by the Games. In the East End of Glasgow, housing development for the Athletes’ Village and supporting infrastructure will promote sustainable economic growth. More broadly, support for the 2014 Games and other major sporting events will create jobs, provide contract opportunities for Scottish businesses and boost our events and tourism industry.

OUR PRIORITIES

The Health and Wellbeing portfolio will be responsible for public spending totalling £12 billion in 2013-14. Funding allocated to healthcare will be £11.8 billion, of which Territorial Boards and Special Health Boards will receive a core allocation of £9.1 billion. £133.6 million will be allocated to Sport including the Commonwealth Games 2014, £20.3 million to Equalities and £10.9 million to the Food Standards Agency Scotland.

Over the next 10 years the number of over 75s in Scotland’s population – who are the highest users of NHS services — will increase by over 25 per cent. By 2033 the number of people over 75 is likely to have increased by around two thirds. There will be a continuing shift in the pattern of disease towards long-term conditions, particularly with growing numbers of older people with multiple conditions and complex needs such as dementia.

We must be bold enough to visualise the NHS that will best meet the needs of the future in a way that is sustainable, and then make the changes necessary to turn that vision into reality.

Our ‘2020 Vision’

Our vision is that by 2020 everyone is able to live longer healthier lives at home, or in a homely setting.

We will have a healthcare system where we have integrated health and social care, a focus on prevention, anticipation and supported self management. When hospital treatment is required, and cannot be provided in a community setting, day case treatment will be the norm. Whatever the setting, care will be provided to the highest standards of quality and safety, with the person at the centre of all decisions. There will be a focus on ensuring that people get back into their home or community environment as soon as appropriate, with minimal risk of re-admission.

HEALTH AND WELLBEING | 25

Priority areas for action

In 2013-14 we will:

● develop a shared understanding with everyone involved in delivering healthcare services which sets out what they should expect in terms of support, involvement and reward alongside their commitment to strong visible and effective engagement and leadership which ensures a real shared ownership of the challenges and solutions;

● develop a shared understanding with the people of Scotland which sets out what they should expect in terms of high-quality healthcare services alongside their shared responsibility for prevention, anticipation, self management and appropriate use of both planned and unscheduled/emergency healthcare services;

● secure greater integrated working between health and social care, and more effective working with other agencies and with the third and independent sectors. We will maintain the Change Fund at £80 million in order to support the pace of delivery of better outcomes for older people;

● prioritise anticipatory care and preventative spend e.g. support for parenting and early years;

● prioritise support for people to stay at home/in a homely setting as long as this is appropriate, and avoid the need for unplanned or emergency admission to hospital wherever possible;

● take action to ensure that people are admitted to hospital only when it is not possible or appropriate to treat them in the community — and where someone does have to go to hospital, it should be as a day case where possible; and

● work with stakeholders to develop the 2020 Workforce Vision which will describe the workforce in 2020 and put in place the key steps to make that happen. We will publish the 2020 Workforce Vision by June 2013.

EFFECTIVE

● continue to address the significant health inequalities that exist in Scotland. We will continue to build on the success of the Keep Well/Well North programme of health checks, by incorporating the programme of inequalities-targeted, high-risk primary prevention into all NHS Boards’ activities through a mainstreaming programme across 2012-15;

● invest a total of £30 million (£27 million resource and £3 million capital) over the Spending Review period to establish new approaches to detecting cancer early. This will increase the number of people who benefit as quickly as possible from the world-leading treatment and support we have for cancer patients and their relatives and carers in Scotland, reducing the impact of cancer and, as a result, reducing premature mortality from cancer in Scotland;


● continue to implement our stroke and heart disease action plan which sets out a range of actions that aim to improve outcomes for people living with, or at risk of developing, these conditions;

● support increased access to insulin pump therapy for both adults and children as part of our commitment to improving services for people with diabetes. We have provided £2.5 million worth of funding to purchase pumps and the associated consumables to support NHS Boards to triple the number of insulin pumps over the spending review period;

● continue the roll out of the Family Nurse Partnership programme and continue to support wider preventative services, such as parenting support, education and learning support, employability services, drugs and alcohol services, community policing and services, with a particular focus on vulnerable groups, such as looked after children, offenders and children affected by domestic abuse. We will do this by implementing the Getting it Right for Every Child approach across all relevant parts of our health services and investing £39m/£42m over 2013-14 and 2014-15 on the Early Years Change Fund as we believe that action in children’s early years is the most fundamental and effective form of early intervention to address poor health;

● continue to address the variation in waiting times for IVF treatment during this Parliament by establishing a maximum waiting time of 12 months and providing additional funding to NHS Boards to support delivery of this;

● give fresh impetus to existing work on improving unscheduled care, identifying and implementing the key actions which need to be taken;

● develop and implement policy in Scotland on the regulation of the healthcare professions. This will include implementation of Enabling Excellence and the related UK Health and Social Care Act 2012; and

● progress greater collaboration with industry, academia, communities, users, carers and other key stakeholders to influence future innovations, improvement in quality of healthcare and wealth creation opportunities.

PERSON-CENTRED

● focus on the delivery of the Person Centred Quality Ambition through a National Person-Centred Health and Care programme;

● work with partners to ensure that the general medical services contract in Scotland allows general practice to play its full part in delivering high-quality care; and

● introduce legislation that requires NHS Boards and their council partners to integrate health and adult social care to ensure that services are built around the needs of individuals, their carers and families.


● provide local authorities with £11 million transformation funding to deliver the shift to self-directed support and high quality public services that respond to the needs of individuals and local communities. Provide third and independent sector providers with a further £2 million to respond to the shift in commissioning practice that self-directed support requires;

● support the health and social care workforce through a training programme that will ensure all relevant staff understand their role in fulfilling the statutory duties of the Social Care (Self-directed Support) (Scotland) Bill;

● support the development of effective joint strategic commissioning of health and adult social care services that will make explicit the link between improving outcomes for people and investment decisions by partners;

● continue our focus on improving patient experience through our Better Together programme and ensure that health services recognise and respond flexibly to each person as a unique individual, build trust and empathy, and engage people in decisions that affect their healthcare and wellbeing;

● support people to have more control of their conditions and their lives through self management and create a radical shift in the way people, their communities and the healthcare system engage with each other, so that each of us is empowered to live well and be the lead partner in the management of our health;

● continue our focus on improving older people’s experience of health care, by embedding improvements in the care of people within hospital settings through support for the implementation of the Standards of Care for Dementia and Promoting Excellence. This will include continued support for the Dementia Champions and Alzheimer Scotland Nurse Consultants/Specialists as well as any other initiatives arising as identified by the Dementia Standards in Hospitals Implementation and Monitoring Group. We will also develop the implementation of the Dementia Standards in other hospital settings (non-general), in particular mental health settings and settings which provide care closer to home. We will also continue to support the programme of inspections of care for older people within hospitals. On publication of the refreshed Dementia Strategy in 2013 we will focus on Nursing, Midwifery and Allied Health Professions priorities including those relating to post-diagnostic support for people with dementia;

● ensure that people with learning disabilities will have access to expert learning disabilities nursing. We will take forward a co-ordinated action plan to address key recommendations from the UK Modernising Learning Disabilities Nursing Review; and

● work with our partners to deliver the commitments in the new Mental Health Strategy for Scotland: 2012-2015 published in August 2012.


SAFE

● establish a second phase of the Scottish Patient Safety Program (SPSP2) with new, more stretching targets to reduce Hospital Standardised Mortality rates and for increasing the experience of harm-free care;

● learning from the pilot patient safety in primary care work, we will extend the patient safety programme to primary care and implement across Scotland from April 2013;

● support Healthcare Acquired Infection (HAI) Task Force Groups to deliver the outcomes specified in the HAI Delivery Plan 2011; and

● implement a framework for improvement across NHSScotland to increase the consistency and effectiveness of the way in which our health services respond to and learn from adverse events.

Capital

● earmark £271 million funding for the children and adult hospitals element of the New South Glasgow Hospitals project;

● provide £21.5 million funding to enable projects being taken forward under hub and Non-Profit Distributing (NPD) model to move forward quickly; and

● commit £17.6 million to support the radiotherapy equipment replacement programme.

Sport

● continue to work with and support Games partners to ensure that the Commonwealth Games are delivered successfully;

● ensure we maximise benefits and legacy from the Commonwealth Games 2014 for the whole of Scotland; and

● continue to drive improvements in physical activity participation levels.

Equalities

● focus on activities which support early intervention and prevention; which address the inequalities in employment and economic participation and those that increase the capacity of communities. Emphasis is also being given to activity which supports the effective implementation of the public sector equality duty;

● consult on a draft Bill on same sex marriage;

● continue with significant investment to support local interventions and frontline services, to support children affected by domestic abuse and to resource the network of rape crisis centres across Scotland; and

● take forward the implementation of the public sector equality specific duties and the Forced Marriage etc (Protection and Jurisdiction) (Scotland) Act 2011.


Food Standards Agency

● Following changes in England and Wales in 2010, the Scottish Government commissioned an independent review panel, led by Professor Jim Scudamore, to consider the future delivery of the food standards regime in Scotland. On 27 June 2012 the Minister for Public Health announced that the Scottish Government intended to implement the majority recommendation of the Scudamore report and set up a new Scottish body for food safety, standards, labelling, nutrition and meat inspection. The Scottish Government will lead the process of setting up the new body and the exact timing of this change is still to be confirmed.

Draft Budget for 2013-14 and spending plans for 2014-15 are set out below:

Table 3.01: Detailed spending plans (Level 2)

Level 2

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

NHS and Special Health Boards 8,862.3 9,124.8 9,375.9Other Health 2,720.7 2,688.2 2,594.6Sport 73.7 133.6 207.7Equalities 20.3 20.3 20.3Food Standards Agency Scotland 10.9 10.9 10.9Total Portfolio 11,687.9 11,977.8 12,209.4of which:

DEL Resource 11,128.4 11,469.3 11,841.4DEL Capital 459.5 408.5 268.0AME 100.0 100.0 100.0

Table 3.02: Spending plans (Level 2 real terms) at 2012-13 prices

Level 2

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

NHS and Special Health Boards 8,862.3 8,902.2 8,924.1Other Health 2,720.7 2,622.6 2,469.6Sport 73.7 130.3 197.7Equalities 20.3 19.8 19.3Food Standards Agency Scotland 10.9 10.6 10.4Total Portfolio 11,687.9 11,685.7 11,621.1of which:

DEL Resource 11,128.4 11,189.6 11,270.8DEL Capital 459.5 398.5 255.1AME 100.0 97.6 95.2


Health

Table 3.03: More detailed spending plans (Level 3)

Level 3Resource

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

NHS and Special Health Boards 8,862.3 9,124.8 9,375.9Education and TrainingWorkforce 31.1 31.1 31.1Nursing 148.5 148.9 148.5Primary and Community Care ServicesGeneral Medical Services1 710.4 710.4 710.4Pharmaceutical Services Contractors’ Remuneration 185.9 181.4 180.1General Dental Services 398.7 398.7 398.7General Ophthalmic Services 93.0 93.0 93.0Improving Health and Better Public HealthHealth Improvement and Health Inequalities 59.5 59.3 60.8Pandemic Flu 7.3 10.0 16.1Health Screening 3.0 3.0 3.0Tobacco Control 12.3 12.3 12.3Alcohol Misuse 42.3 42.3 42.3Health Protection 40.0 40.0 40.0Healthy Start 12.0 12.6 13.9Mental Health Improvement and Service Delivery2 22.2 22.8 22.8Specialist Children’s Services 21.4 21.4 21.4Early Detection of Cancer 6.7 7.7 12.3General ServicesResearch 69.5 68.8 69.0Distinction Awards 24.0 23.5 23.5Access Support for the NHS 27.1 27.5 29.5Quality Efficiency Support 18.9 18.9 18.9Clean Hospitals / MRSA Screening Programme 28.4 28.4 28.4eHealth 90.3 88.7 88.7Self Directed Support Programme 5.5 17.0 12.0Miscellaneous Other Services 114.0 126.9 137.7Care Inspectorate 21.6 21.3 21.5Provision for Transfer to Health Capital 95.0 105.0 120.0Resource Income (121.4) (123.2) (125.3)

11,029.5 11,322.5 11,606.5CapitalInvestment 473.5 410.5 284.0Income (20.0) (20.0) (20.0)Total Capital 453.5 390.5 264.0Annually Managed ExpenditureNHS Impairments 100.0 100.0 100.0Total Health 11,583.0 11,813.0 11,970.5of which:DEL Resource 11,029.5 11,322.5 11,606.5DEL Capital 453.5 390.5 264.0AME 100.0 100.0 100.0

Notes:

1. Allocations for 2013-14 and 2014-15 for General Medical Services are still to be decided and are subject to UK pay negotiations with the professional group concerned.

2. Mental Health Legislation and Services, Mental Wellbeing and Mental Health Programmes included under Miscellaneous Other Services have merged to form Mental Health Improvement and Service Delivery.


Table 3.04: Territorial and Special Health Boards spending plans (Level 4)

Level 4

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

Territorial BoardsNHS Ayrshire and Arran 586.9 603.1 618.5NHS Borders 170.7 175.4 179.8NHS Dumfries and Galloway 246.4 253.2 259.6NHS Fife 520.8 539.5 553.3NHS Forth Valley 418.2 434.0 445.2NHS Grampian 713.1 743.3 762.4NHS Greater Glasgow and Clyde 1,937.8 1,991.3 2,042.7NHS Highland 496.0 509.7 522.6NHS Lanarkshire 837.9 865.0 887.1NHS Lothian 1,092.6 1,140.3 1,169.7NHS Orkney 32.8 34.3 35.2NHS Shetland 37.6 38.6 39.6NHS Tayside 611.2 628.7 644.7NHS Western Isles 59.1 60.7 62.22014-15 NRAC Provision – – 42.0Total 7,761.1 8,017.1 8,264.6

Special BoardsNHS Waiting Times Centre 39.4 39.8 40.2NHS Scottish Ambulance Service 203.8 205.9 207.9NHS National Services Scotland 277.4 276.0 274.8Healthcare Improvement Scotland 16.6 15.9 15.2NHS State Hospital 33.2 33.6 33.9NHS 24 60.1 60.7 61.3NHS Education for Scotland 391.1 392.0 392.9NHS Health Scotland 19.3 18.5 17.7Total 1,040.9 1,042.4 1,043.9

Other Income 63.2 65.3 67.42011-12 Recurrent Allocations Adjustment (2.9) – –

Total Territorial and Special Boards 8,862.3 9,124.8 9,375.9


What the budget does

The budget supports services and initiatives designed to help people in Scotland to live longer and healthier lives with reduced health inequalities and to provide more sustainable, high quality and continually improving healthcare services close to home.

Our total healthcare funding in 2013-14 of £11.8 billion reflects an increase of £230 million over 2012-13. This comprises resource funding of £11.3 billion, net capital funding of £390.5 million and annually managed expenditure of £100 million. Resource funding has increased by £293 million in 2013-14, from £11,029.5 million to £11,322.5 million. This is the full amount of the budget consequentials arising from the increase to health in England and delivers on the Scottish Government’s commitment to pass on the resource budget consequentials in full to the health budget in Scotland.

NHS Territorial Boards will receive allocation increases of 3.3 per cent in 2013-14 and 3.1 per cent in 2014-15. To achieve this and also to support an increase for NHS Special Boards delivering direct patient care, such as the Scottish Ambulance Service, we have adopted a similar approach to 2012-13 where a differential efficiency target has been set for NHS Special Boards budgets and we will reinvest savings from the NHS Special Boards in the delivery of new vaccines programmes.

NHS Boards provide free and universal frontline healthcare services for patients and their families. NHS Boards will build on their recent achievements in order to deliver quality healthcare services. Through their Local Delivery Plans, NHS Boards will demonstrate how they will work in partnership to deliver accelerated improvements for key priorities through a continued focus on improving quality by, for example, tackling health inequalities, improving access to elective mental health and substance misuse services, and reducing healthcare associated infection.

Budget changes

The net changes to the Health Capital budget are an increase of £10 million in 2013-14 and £25 million in 2014-15. This reflects additional Budget consequentials of £25 million received for both 2013-14 and 2014-15 along with £15 million reduction in 2013-14 reflecting accelerated funding from 2013-14 into 2012-13.

In 2013-14 we will:

● continue the Detect Cancer Early programme focusing on breast, bowel and lung cancer which are the three most common cancers in Scotland. This will improve survival and reap benefits for patients, their families and all of Scotland;

● deliver the 12-week Treatment Time Guarantee for eligible patients as set out in the Patients Rights Act;

● sustain 18 weeks referral to treatment, outpatient and diagnostic maximum waits standards;

● implement the provisions of the Alcohol (Minimum Pricing) (Scotland) Act 2012, which was passed by the Scottish Parliament in May 2012;


● support people in Scotland to maintain their health through implementation of the recently enacted tobacco control legislation;

● continue to deliver the Obesity Route Map Action Plan;

● continue to financially support the implementation of the refreshed Action Plan for Rights, Relationships and Recovery (RRRs): the Review of Mental Health Nursing. We will refresh this work in alignment with the new Mental Health Strategy for Scotland 2012-15 published in August 2012;

● remain committed to the vital role that Community Nurses, including public health nurses, make to improving the health of the people of Scotland and we will continue to support NHS Boards to modernise nursing in the community, improve care for patients and build capacity, capability and sustainability across the whole nursing workforce;

● commission a Chief Nursing Officer’s Education Review to develop a fresh and exciting future vision for Nurse Education in Scotland and ensure our status as a world-class provider in this arena;

● implement the National Delivery Plan for the Allied Health Professions which defines the future vision for AHPs and the services they deliver;

● work towards transposition and implementation of the EU Directive on Cross-Border Healthcare by October 2013;

● support continuous quality improvement in maternity services, contributing to the provision of person centred, safe and effective care for women and babies; and help maximise maternity staff’s contribution to addressing health inequalities by supporting NHS Boards to achieve the early access HEAT target by 2015 across all deprivation quintiles (80 per cent women “booked” by 12 weeks of pregnancy) and support implementation of the Getting it Right for Every Child (GIRFEC) practice model in maternity services;

● establish a Scottish Patient Safety Programme – Maternity Quality Improvement Collaborative towards reducing inequalities in outcomes, and making maternity care a safer and positive experience for women, babies and families;

● continue to invest in Specialist Children’s Services to ensure these services are safe and sustainable;

● establish an Early Years Collaborative to achieve the vision and priorities of the Early Years Taskforce;

● support HAI Task Force Groups to delivery the outcomes specified in the HAI Delivery Plan 2011;

● agree and support NHS Boards to achieve revised HAI HEAT targets and ensure alignment of HAI Task Force work with Scottish Patient Safety Partnership-led work;


● support people to be able to manage their own mental health and continue to focus on prevention and anticipation through attention to early years, parenting and child and adolescent mental health;

● focus on delivery of the mental health HEAT targets to ensure faster access to evidence based psychological therapies and specialist Child and Adolescent Mental Health Services with no one waiting longer than 18 weeks from referral to treatment from December 2014;

● continue our work towards reducing the suicide rate and we will be consulting later in the year on the next stage of work on “Choose Life”;

● continue to improve the quality of life for those with dementia and their carers and families, building on the work to deliver Scotland’s first national dementia strategy;

● use our NHS resources efficiently to ensure that patients are treated quickly and in the location that best suits their needs. Over 80 per cent of procedures are now carried out as same-day surgery;

● maintain our preparedness for a flu pandemic;

● engage widely on the new strategic 2020 Workforce Vision;

● ensure successful implementation of the new Staff Governance Standard that sets out NHS employers’ commitment to develop and effectively manage their staff, and to ensure that all staff have a positive employee experience; and

● continue to support NHS Boards to deliver efficiency savings while improving quality through the Efficiency and Productivity Framework.

Sport


Level 3

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

Glasgow 2014: Delivery of Commonwealth Games 37.4 97.3 169.4Sport 36.3 36.3 38.3Total Level 2 73.7 133.6 207.7of which:

DEL Resource 67.7 115.6 203.7DEL Capital 6.0 18.0 4.0AME – – –



The Scottish Government is working in partnership with Glasgow City Council, Commonwealth Games Scotland and the Glasgow 2014 Organising Committee to ensure that the Games are an outstanding success. Funding for the Games comes from the Scottish Government, Glasgow City Council and commercial income raised by the Organising Committee. The Scottish Government is the principal funder (67 per cent) and ultimate guarantor of the Glasgow 2014 Commonwealth Games.

The success of the Games is also about securing legacy benefits both before and after the Games themselves. We will continue to work with stakeholders to increase awareness of and involvement in legacy opportunities across Scotland.

The budget supports the aspiration of delivering a more active population. We will continue to direct activity towards increasing physical activity and encouraging everyone to lead a more active lifestyle, using the power and excitement of the Games and the Ryder Cup as a catalyst to get more people active. This will build on activity such as ensuring two hours of PE for all primary school aged children and two periods of PE for secondary school aged people are provided as a minimum. We are making significant progress on this with 84 per cent of primary schools and 92 per cent of secondary schools meeting the target.

We will invest an additional £1 million funding in 2013-14 within the elite athletes programme and this will increase our overall investment to £9 million to underpin the performance development programmes including those for the 17 Commonwealth Sports in preparation for the Commonwealth Games in 2014.

Budget changes

An additional £1 million in 2013-14 for sport in respect of elite athletes.

In 2013-14 we will:

● support the Glasgow 2014 Organising Committee to prepare for the Glasgow 2014 Commonwealth Games;

● work with stakeholders to create a lasting legacy and maximise the benefits for the whole of Scotland from Glasgow hosting the 2014 Commonwealth Games;

● continue to increase the number of people being active;

● continue to increase the number of Community Sports Hubs;

● increase the number of schools providing the minimum levels of PE;

● enhance and grow the successful Active Schools Programme;

● build on the clubgolf programme to further embed a Ryder Cup legacy; and

● ensure the successful delivery of the Glasgow 2014 Commonwealth Games.


Equalities


Level 3

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

Promoting Equality 20.3 20.3 20.3Total Level 2 20.3 20.3 20.3of which:

DEL Resource 20.3 20.3 20.3DEL Capital – – –AME – – –


The equality budget is used to promote equality and to tackle discrimination, prejudice and disadvantage which act as barriers to equality of opportunity and the wellbeing of the people of Scotland.

In 2013-14 we will:

● promote equality across the range of protected groups and provide support to help eliminate the significant inequalities in Scottish society;

● invest in equality activity and interventions and focus on issues around employment and economic activity, hate crime and public service improvement;

● continue to support work to address violence against women — providing support to frontline services and resources for the networks and support infrastructure;

● work to ensure that the integration of asylum seekers and refugees continues and that services are appropriate to their evolving circumstances;

● continue to promote religious tolerance and understanding and on improving outcomes for minority ethnic communities;

● address issues of gender, age, Lesbian, Gay, Bisexual and Transgender (LGBT) and disability equality and work to promote independent living for disabled people and to ensure that the Commonwealth Games are inclusive of all;

● increase the capacity of communities and the engagement of equality groups with mainstream providers and public institutions so that they can contribute to shaping policy and service delivery;

● implement the Forced Marriage etc (Protection and Jurisdiction) (Scotland) Act 2011; and

● implement the public sector equality specific duties which will provide a robust framework for the delivery and mainstreaming of equality. Continue to support the improvement in equality analysis and assessment of policy.


Food Standards Agency Scotland


Level 3

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

Food Safety 7.3 7.3 7.3Eating for Health 2.0 2.0 2.0Choice (making it easier for consumers to make informed choices) 1.6 1.6 1.6

Total Level 2 10.9 10.9 10.9of which:

DEL Resource 10.9 10.9 10.9DEL Capital – – –AME – – –


The main purpose of the Food Standards Agency in Scotland (FSAS) is to improve food safety, standards and encourage a healthy balanced diet. The primary focus of its work is to protect the Scottish public from the risk of consuming contaminated food.

In February 2012, the www.eatwellscotland.org website went live. The launch of this site has been welcomed by stakeholders in Scotland and helps us to continue to provide consumers with nutritional information and maintain visibility of the function of the FSAS.

In 2013-14 we will:

● ensure food produced or sold in Scotland and the rest of the UK is safe to eat;

● work with food producers and caterers to ensure that they give priority to consumer interests in relation to food;

● ensure that consumers have the information and understanding they need to make informed choices about where and what they eat;

● ensure that regulation is effective, risk-based and proportionate and is clear about the responsibilities of food business operators and protects consumers and their interest from fraud and other risks; and

● ensure that enforcement is effective, risk-based and proportionate and is focused on improving public health.

CHAPTER 4 Finance, Employment and

Sustainable Growth


The Finance, Employment and Sustainable Growth (FESG) portfolio has a crucial role to play in delivering the Government’s Purpose of sustainable economic growth with opportunities for all of Scotland to flourish. Excluding local government (discussed separately) and pensions, the majority of the portfolio’s spend is focused on support for businesses through enterprise, energy and tourism funding. The portfolio also supports wider public service reform, through investment in digital public services; action on community empowerment; promoting equalities and the growth of the third sector; and the modernisation of the planning system.


The Government Economic Strategy sets out in detail the measures that we are taking across all portfolios to accelerate Scotland’s recovery and support jobs. The FESG portfolio forms a central part of the Strategy by maintaining and further developing a supportive business environment and also has a key role to play in effective government and transition to a low carbon economy. Increasing resources for energy and enterprise demonstrates this Government’s commitment to deliver jobs and green energy for business and communities throughout Scotland. It also reinforces Scotland’s ambition to be a world leader in developing a low carbon economy.

The portfolio also contributes towards ensuring that we achieve balanced economic growth that provides the most disadvantaged in society with the opportunity to prosper. Equity, whether it be social, regional, inter-generational or a combination of these factors, is also seen as a key driver of economic growth. Creating a fairer society, as we stimulate growth and create jobs, is central to this portfolio’s focus.

In response to current economic conditions, the portfolio is accelerating action to support employment and growth. Capital investment is vital to growth and, as a consequence of prudent financial management, accelerated funding and drawdown of Scotland’s Fossil Fuel Levy surplus, we were able to announce a capital investment package in June 2012 which included increased support for business and the renewables industry. We are continuing to support access to finance through the Scottish Investment Bank. As part of our further investment in construction, skills and the green economy, we will increase spend on domestic and public sector energy efficiency, which will help create jobs and reduce emissions.

FINANCE, EMPLOYMENT AND SUSTAINABLE GROWTH | 39

BUDGET CHANGES

Budget changes since the publication of the Spending Review 2011 and Draft Budget 2012-13 are as follows:

● responsibility for the Office of the Scottish Charity Regulator was transferred to the FESG portfolio from the Justice portfolio in June 2012;

● the Scottish Public Pensions Agency has updated its AME forecasts for 2013-14 and 2014-15;

Under Enterprise, Energy and Tourism:

● Enterprise Bodies received additional capital of £2 million in 2013-14 for Forres Enterprise Park;

● Energy received additional capital of £45 million in 2013-14 and £42 million in 2014-15 for renewables projects through drawdown of Scotland’s Fossil Fuel Levy surplus; it will also receive £14.7 million in 2013-14 from a Whitehall transfer as part of the Green Deal Initiative; and

● VisitScotland will receive an additional £1.5 million in 2012-13 for marketing campaigns to attract visitors and revenue to Scotland, and receive additional resource from budget consequentials of £1.2 million in 2013-14 and in 2014-15 to support the Scottish Open golf tournament.

OUR PRIORITIES

In 2013-14 we will continue to work in partnership with our key delivery agencies in line with the Government Economic Strategy. We will build on previous successes, specifically by:

● further promoting and developing Scotland’s four Enterprise Areas to encourage businesses to set up and grow in these strategic locations;

● working with enterprise agencies and the Scottish Funding Council, to streamline commercialisation and innovation services, ensuring better aligned support for businesses and universities. Programmes such as the new £10 million Scottish Innovation Centres and the Fraunhofer Centre for Applied Photonics at Strathclyde University will support the development of the next generation of business innovators, academics and entrepreneurs in Scotland;

● introducing a Better Regulation bill as part of the 2012-13 Legislative Programme to improve the regulatory landscape, addressing concerns raised by business about regulatory inconsistency;

● continuing to support VisitScotland to harness the unique opportunities of the ‘winning years’, 2012 to 2014, when Scotland welcomes the world to join the celebrations around the Year of Creative Scotland, Disney’s animated film Brave, the London 2012 Olympics, the Year of Natural Scotland, the Ryder Cup, the Glasgow Commonwealth Games and Homecoming 2014; and


● continuing implementation of a modernised planning system to support sustainable economic growth (including further reform of domestic and non-domestic permitted development).

In supporting the transition to a low carbon economy, we will:

● increase expenditure on domestic and public sector energy efficiency;

● build on Scotland’s position as a leading centre for investment in offshore wind technology and at the cutting edge of developments in marine energy. We will also support more community and home renewables projects, and increase our renewable and low carbon heat schemes; and

● prepare legislation to increase the energy efficiency of existing non-domestic buildings and review energy standards for new buildings for 2013.

As part of our commitment to effective government, we will also:

● implement our Scotland’s Digital Future — Delivery of Public Services strategy, which commits to achieving better value through collaboration, sharing ICT infrastructure and the greater use of digital technologies; and

● maximise the economic contribution of the third sector and enable it to play a full role in public service reform.



Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Public Pensions Agency 3,212.8 2,840.6 2,953.5

Committees, Commissions and Other 19.9 10.4 10.4

Planning 3.8 3.6 3.5

Enterprise, Energy and Tourism 421.2 475.6 449.5

Third Sector 24.5 24.5 24.5

Accountant in Bankruptcy 2.0 2.0 2.0

Registers of Scotland – – –

Office of the Scottish Charity Regulator 3.1 3.0 3.0

Total Portfolio 3,687.3 3,359.7 3,446.4

of which:

DEL Resource 419.7 421.0 418.8

DEL Capital 66.8 111.1 87.9

AME 3,200.8 2,827.6 2,939.7


Table 4.02: Detailed spending plans (Level 2 real terms) at 2012-13 prices

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Public Pensions Agency 3,212.8 2,771.3 2,811.2

Committees, Commissions and Other 19.9 10.1 9.9


Enterprise, Energy and Tourism 421.2 464.0 427.8





Total Portfolio 3,687.3 3,277.8 3,280.3

of which:

DEL Resource 419.7 410.7 398.6

DEL Capital 66.8 108.4 83.7

AME 3,200.8 2,758.6 2,798.0

Scottish Public Pensions Agency

Table 4.03: More detailed categories of spending (Level 3)

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Agency Administration 12.0 13.0 13.8

Scottish Teachers’ Superannuation Scheme 1,434.2 1,355.9 1,397.5

NHS Superannuation Scheme (Scotland) 1,766.6 1,471.7 1,542.2

Total 3,212.8 2,840.6 2,953.5

of which:

DEL Resource 11.5 11.9 12.6

DEL Capital 0.5 1.1 1.2

AME 3,200.8 2,827.6 2,939.7


The Scottish Public Pension Agency’s principal role is to administer the pensions, premature retirement and injury benefits schemes for members of the NHS Superannuation Scheme (Scotland) and the Scottish Teachers’ Superannuation Scheme.

The Agency also develops the regulations covering the NHS Superannuation Scheme (Scotland), the Scottish Teachers’ Superannuation Scheme, and the Local Government, Police and Firefighters’ Pensions Schemes in Scotland. It determines appeals made by members of these schemes and provides a pensions calculation service for some small public pension schemes operating in Scotland and elsewhere.


The pension scheme funding represents the costs of pensions accrued in that year plus notional interest on current liabilities less income received. It is classified as Annually Managed Expenditure (AME), funded separately by HM Treasury from the Departmental Expenditure Limit (DEL) settlement and, as such, variations in the scheme expenditure do not have to be balanced by adjustments elsewhere in the Scottish Budget.

Budget changes

There are no changes to DEL figures, but AME forecasts for 2013-14 and 2014-15 have been updated.

In 2013-14 we will:

● maintain our core service standards for approximately 450,000 members, pensioners and dependants for the Scottish NHS and Teachers’ superannuation schemes; and

● contribute to the development of policy arising from the pension reform agenda in respect of the Scottish Teachers’, NHS, Police, Firefighters’ and Local Government schemes; and to commence implementing the necessary administrative arrangements for the NHS and Teachers’ schemes.

Committees, Commissions and Other


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Improving Public Services 3.3 3.5 3.5

Public Sector ICT Policy 4.7 4.7 4.7

Local Governance 1.4 1.4 1.3

Commissions 0.2 0.4 0.5

Local Government Elections 10.2 0.3 0.3

Council of Economic Advisers 0.1 0.1 0.1

Total 19.9 10.4 10.4

of which:


DEL Capital - - -

AME - - -


The Improving Public Services, Public Sector ICT Policy and Local Governance budgets provide support to programmes and projects designed to create public services that are digital first, reliable, efficient and person-centred. The aim is to help achieve better outcomes for people and communities, through a focus on prevention, on closer integration of services at the local level, on performance improvement and through enabling new ways of working to make the best use of the assets and potential of Scotland’s people, including the public sector workforce.


The Commissions budget funds the work of the Local Government Boundary Commission for Scotland, which is an advisory NDPB that is responsible for statutory and ad-hoc reviews of electoral and administrative arrangements.

The Local Government Elections budget will meet the costs associated with the Scottish Government’s initiatives on improving the co-ordination and administration of elections. Spending on elections is cyclical by its nature and larger sums were required in preparation for the local government elections in May 2012 than in 2013-14 and 2014-15.

The main purpose of the Council of Economic Advisers’ budget is to support the provision of economic advice to Ministers, both privately in meetings and publicly through its Annual Report. The majority of the costs incurred are due to travel expenses and subsistence for the members attending meetings. Members are not paid.

In 2013-14 we will:

● implement our Scotland’s Digital Future — Delivery of Public Services strategy, which sets out our response to John McClelland’s Review of ICT infrastructure in the Public Sector in Scotland and commits to achieving better value through collaboration, sharing of ICT infrastructure and the greater use of digital technologies;

● continue the development and operation of enhanced National ICT infrastructure, for example through the Customer First programme and the creation of a single access point for all Digital Public Services, to support key public services such as the National Entitlement Card;

● ensure delivery of local outcomes, which in turn help to achieve Scotland’s National Outcomes, by supporting community planning and wider engagement. The Scottish Government provides a range of support (including pilot funding and support for practitioners) to Community Planning Partnerships and Community Councils to build capacity in outcomes-based working at the local level;

● continue to support the development of Business Improvement Districts across Scotland, which encourages businesses to invest collectively in local improvements and thereby contribute to the sustainable economic growth of the local economy; and

● fund the Electoral Management Board for Scotland and support the Electoral Commission in the exercise of its statutory activities.


Planning


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m


Building Standards 0.3 0.2 0.2

Architecture and Place 1.6 1.5 1.4

Planning and Environmental Appeals 0.7 0.7 0.7

Total 3.8 3.6 3.5

of which:



AME - - -


The Planning budget supports key elements of the planning modernisation programme, including the e-planning project, which has transformed access to the planning system; support for community engagement, principally through funding to Planning Aid for Scotland; and the Planning Development Programme. In addition, the budget covers the work undertaken by the Environmental Assessment team in providing guidance for mandatory environmental assessments across all sectors of government.

The Building Standards budget provides for the preparation and updating of building standards legislation and guidance documents, including implementation of the recommendations in the Low Carbon Buildings Strategy for Scotland. A key work area is to ensure that European obligations are met and the main priority is the Energy Performance Certificate (EPC) element of the Energy Performance of Buildings Directive to ensure that the Green Deal can be delivered.

The Architecture and Place budget provides sponsorship to Architecture and Design Scotland, which carries out a variety of advisory roles to improve the quality of Scotland’s built environment. It also provides funding that supports the National Outcome that we value and enjoy our built and natural environment.

The Planning and Environment Appeals budget provides for determination of appeals made to Scottish Ministers under planning and environmental legislation against decisions made, or enforcement action taken, by planning authorities and the Scottish Environment Protection Agency. It conducts examinations of strategic and local development plans and inquiries held in relation to compulsory purchase orders, transport and other infrastructure projects such as onshore renewables and core path plans which promote access to the countryside.


In 2013-14 we will continue the implementation of a modernised planning system to support sustainable economic growth and ensure that the right development is located in the right place. This will include:

● further reform of domestic and non-domestic permitted development and greater focus on development delivery and viability;

● continuing progress towards a well-resourced planning system with an appropriate system of fees and charges in the context of a new performance framework agreed across local and central government, agencies and the private sector;

● focus on the delivery of better places through mainstreaming the Scottish Sustainable Communities Initiative (SSCI) and other exemplars such as the 2014 Commonwealth Games Village; and

● legislation to increase the energy efficiency of existing non-domestic buildings and review energy standards for new buildings for 2013.

Enterprise, Energy and Tourism


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Enterprise Bodies 322.0 328.2 330.2

Energy 64.3 115.9 102.0

Tourism 49.1 50.7 51.5

Innovation and Industries 5.8 5.8 5.8

Strategic Forum -20.0 -25.0 -40.0

Total 421.2 475.6 449.5

of which:

DEL Resource 355.0 365.7 362.9

DEL Capital 66.2 109.9 86.6

AME - - -


The Enterprise budget is focused on supporting growth companies, growth sectors and growth markets. In line with our aim to accelerate recovery through boosting public sector capital investment, Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE) will continue to have the flexibility to use resource budget to support capital projects. On current estimates for 2013-14, we expect the enterprise bodies to supplement their capital programme through switching somewhere between £40 million and £75 million from resource to capital budgets, plus using over £50 million of capital receipts.


The Enterprise Bodies budget funds SE and HIE and includes budget for Scottish Development International (SDI) and for grants provided through the SMART:Scotland programme and the Regional Selective Assistance scheme. SE and HIE focus on developing those sectors in which Scotland has a comparative advantage, as well as supporting businesses expanding into new markets, helping companies invest in innovation and commercialise research, providing finance through the Scottish Investment Bank and supporting companies to develop their leadership and workforce. Core to this is the switch to the low carbon economy, which offers Scotland economic advantages from its wealth of natural resources. In addition to its key role of supporting sustainable 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.

The Energy budget supports activities that contribute towards the achievement of Scotland’s energy ambition, which is to be a world leader in sustainable energy production and use so that Scotland is a leading location for investment in the low carbon economy.

Targeted investment in renewable energy in partnership with our enterprise bodies will act as a key motor of the Scottish economy. Scotland is blessed with abundant energy resources and we are committed to taking full advantage of the opportunities that exist in transforming to a low carbon economy. Renewable energy and low carbon technologies are two growth sectors, and through our renewable wealth we will reindustrialise Scotland as we research, develop, engineer, fabricate, install, export and service the new energy systems and clean technologies which will power this century.

The Tourism budget supports VisitScotland, enabling it to continue to undertake award-winning campaigns to promote Scotland as a tourism destination, both within the UK and in key overseas markets. As part of wider equalities actions, VisitScotland is working with partners to boost accessible tourism, with a particular focus on disabled and older people.

Our continuing levels of support to VistScotland reflect the unique potential of the ‘winning years’ to contribute to tourism growth in Scotland and realise significant short-term economic return.

On innovation, we are seeking to enhance collaboration between business and the science base, improve business innovation and investment in research and development, and thereby increase sustainable economic growth. Work to streamline the approach to supporting innovation and commercialisation and to ensure that the support to businesses and universities is better aligned is under way. The Innovation and Industries budget supports this work through funding of a number of programmes including Scottish Executive Expertise, Knowledge and Innovation Transfer (SEEKIT) and Knowledge Transfer Partnerships (both managed by the Scottish Funding Council).

Ministers have challenged the bodies included in the Strategic Forum (SE, HIE, VisitScotland, Skills Development Scotland and the Scottish Funding Council) to work together, and with other public bodies, to achieve savings of £85 million in total over the Spending Review period through greater collaboration and alignment, including further work to integrate and streamline back-office and corporate services and potential asset sales. The Strategic Forum Partners will also use their commercial and marketing expertise to assist other public bodies to achieve savings and/or increased income.


Budget changes

Enterprise Bodies will receive additional capital of £2 million in 2013-14 for Forres Enterprise Park.

Energy will receive additional capital of £45 million in 2013-14 and £42 million in 2014-15 for renewables projects through drawdown of Scotland’s Fossil Fuel Levy surplus; it will also receive £14.7 million in 2013-14 from a Whitehall transfer as part of the Green Deal Initiative.

VisitScotland received additional resource from budget consequentials of £1.2 million in 2013-14 and in 2014-15 to support the Scottish Open golf tournament. Investing in European Tour events, alongside private sector sponsorship, in the run-up to the 2014 Ryder Cup, will have significant benefits for Scotland both in terms of direct tourist revenue and television exposure to overseas visitors.

In 2013-14 we will continue to take action to support the priorities identified in the Government Economic Strategy:

● our enterprise bodies will be active on behalf of their account–managed companies with advisory support, and are working with the banks to help improve the chances of account–managed companies securing funding;

● we are also taking steps to streamline the commercialisation and innovation support provided by our enterprise bodies and the Scottish Funding Council to boost productivity and translate great business ideas into great business practice;

● Scottish Development International will work to attract new inward investment. Scotland’s International Trade and Investment Strategy has set a target of 25,000-35,000 planned jobs through inward investment between 2011 and 2015, and we are on track to achieve this;

● we will further promote and develop Scotland’s four Enterprise Areas to encourage businesses to set up and grow in these strategic locations while supporting the development of supply chain links between Enterprise Areas and businesses in the surrounding area and across Scotland. We will also capitalise on opportunities where the Highlands and Islands has a comparative advantage — such as renewable energy — combined with the development of the University of the Highlands and Islands (UHI) and the provision of superfast broadband;

● we will continue to build on Scotland’s position as a leading centre for investment in offshore wind technology and at the cutting edge of developments in marine energy. Other priorities include supporting more community and home renewables projects, and an increase in renewable and low carbon heat schemes. As part of our construction, skills and green economy investment we will use a Green Deal transfer from the UK Government to increase expenditure on domestic energy efficiency measures. We will also use existing energy budget provision to increase public sector energy efficiency measures and help with peatland restoration in the Rural Affairs and Environment portfolio; and


● we will provide core grant to VisitScotland to allow it to maximise the opportunities presented by major events taking place in the run up to and during 2014; help partners secure major conferences via the VisitScotland Bid Fund; grow Scotland’s reputation as a quality destination through its Quality Assurance advisory services; deliver the Themed Years and Homecoming 2014; and strengthen and promote Scotland’s events industry and help deliver the National Events Strategy.

Third Sector


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m


Reducing Re-offending Change Fund 1.0 1.0 1.0

Total 24.5 24.5 24.5

of which:


DEL Capital - - -

AME - - -


The Third Sector budget supports the development of a thriving third sector that is a key social partner in decision making around the planning, design and delivery of public services. Funding focuses on building the capacity and credibility of the third sector’s contribution to public policy; ensuring that the sector’s important role in developing programmes of preventative spend is realised; and encouraging the social enterprise model to increase the sector’s potential economic contribution.

The Reducing Re-offending Change Fund will support innovation and increase the impact and coverage of interventions that help to reduce re-offending. The Fund is worth £7.5 million and aims to provide offenders with substantial one-to-one support through evidence-based mentoring schemes and to promote strong, equal partnership working between third and public sector organisations. FESG and Justice portfolios are working to ensure that the Fund makes full use of the experience and expertise of the third sector.

In 2013-14, to maximise the economic contribution of the third sector, we will:

● provide the necessary business development support to develop capable, sustainable and enterprising third sector organisations;

● invest in those third sector organisations that have the greatest potential to grow both now and in the future; and

● support the public sector to ensure its markets are open to the third sector.


To enable the third sector to play a full role in public service reform, we will:

● work across the Scottish Government and the public sector to ensure that the role of the third sector is maximised in programmes of preventive spend;

● support the third sector to play a full partnership role on each Community Planning Partnership; and

● develop new financial models, and work in partnership with Big Lottery and other funders to identify opportunities to align resources to deliver better outcomes.

Our work around preventative spend includes the Reshaping Care for Older People National Demonstration Project, which aims to understand the contribution of third sector-delivered interventions to the outcomes of the Reshaping Care for Older People programme in a defined geographical area (NHS Lothian). This groundbreaking work will be delivered via a Public Social Partnership, and the findings will help to inform future planning across Scotland.

Accountant in Bankruptcy


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m


Total 2.0 2.0 2.0

of which:


DEL Capital - - -

AME - - -


Accountant in Bankruptcy (AiB) is an Executive Agency of the Scottish Government. AiB supervises the process of personal insolvency in Scotland, approves debtor applications for bankruptcy, acts as Trustee in bankruptcy, investigates complaints against private sector Trustees in bankruptcy, and acts as the Administrator in the Debt Arrangement Scheme. This includes approving money advisers, payment distributors and debtors’ debt payment programmes. AiB also maintains the public register of bankruptcies, Protected Trust Deeds and company insolvencies. It has the policy lead for the development of policy in relation to bankruptcy, corporate insolvency, the Debt Arrangement Scheme and diligence.


In 2013-14 we will:

● deliver, in conjunction with stakeholders, a range of options for individuals seeking debt relief and debt management;

● support Ministers to develop and refine policy; and

● supervise the process of debt relief.

Registers of Scotland


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m


Total – – –

of which:

DEL Resource – – –

DEL Capital – – –

AME – – –


Registers of Scotland (RoS) is a Trading Fund and self-financing from fees so does not receive direct funding from government. RoS maintains and supplies information from a range of public registers. The main two registers, the Land Register and the General Register of Sasines, are concerned with the ownership of land and property. The public registers play a key role in underpinning the economic and social stability of Scotland. RoS’s purpose is to record and safeguard rights, providing the people and institutions of Scotland with the social and economic benefits that flow from a publicly guaranteed system of rights in land and property.

Office of the Scottish Charity Regulator


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m


Total 3.1 3.0 3.0

of which:



AME – – –



The Office of the Scottish Charity Regulator (OSCR) is a Non-Ministerial Department and moved from the Justice portfolio to the FESG portfolio in June 2012. It is the independent registrar and regulator for Scottish Charities. It has a statutory function to determine the charitable status of bodies, to keep the public register of charities (the definitive on-line register contains details of over 23,500 charities), to encourage, facilitate and monitor compliance by charities, and to identify and investigate apparent misconduct in the administration of charities, taking remedial or protective action as appropriate. OSCR also has a duty to give information or advice or to make proposals to Scottish Ministers on matters relating to its functions.

In 2013-14, we will focus our resources on:

● improving the long term sustainability of the charity sector by developing greater competence and better governance in the sector, primarily through our outreach programme and guidance;

● continuing the review, evaluation and revision of our comprehensive monitoring programmes; and

● consolidating our on-line services for charities and the public, building on earlier capital investment.

CHAPTER 5 Education and

Lifelong Learning


The Education and Lifelong Learning portfolio is responsible for government policy related to improving outcomes for children, young people and in collaboration with colleagues in Health and Social Care Directorates, users of social care. It covers all aspects of school education and national qualifications; university research and science; further and higher education; as well as community and adult learning and development; skills and training, and Gaelic language and broadcasting. The majority of the budget is however contained within the local government settlement which provides for local authority delivery of school education and social work.


Education and lifelong learning is a key contributor to economic recovery and long-term economic growth in which we want everyone across Scotland to share.

Helping people to support themselves and their families while making the maximum possible contribution to the success of Scotland’s economy and society, and enriching our culture, have been our guiding principles in making the tough choices demanded of us.

In early years we are continuing to shift the focus away from intervening when a crisis happens towards prevention and early intervention. This focus on the early years preventative spend will provide a strong base for all our children, irrespective of background to develop, learn and achieve their potential. It also delivers clear economic benefits in terms of making better and more effective use of resources and reducing the need in both the short term and the long term for more expensive, crisis intervention. Evidence shows us that this is where we can make the biggest impact, improving the life chances for our most vulnerable children.

Investment to support the implementation of Curriculum for Excellence will ensure that our young people will have the capacity to flourish in the labour market of the future. Curriculum for Excellence will enhance the prospects of a generation of our young people, providing them with the skills and behaviours they will need to thrive as citizens in the economy of tomorrow.

Moving beyond school, through investment in training opportunities, colleges and universities, we enable young people to move from education into work, supporting people of all ages and backgrounds to find jobs, and enabling them to acquire the higher level skills which lead to individual prosperity and will underpin our future economic growth.

EDuCaTIon anD LIfELonG LEarnInG | 53

our Opportunities for All initiative offers a learning or training opportunity to all 16-19 year olds not already in work, modern apprenticeship or education. This is a central strand to our response supporting youth employment outlined in our strategy, Action for Jobs — Supporting Young Scots Into Work. This supports our ambition to develop the skills of all of our young people to ensure they are equipped to make a successful move into sustained employment.

furthermore, our wide ranging programme of post-16 education reform seeks to improve the life chances of learners while responding to the needs of employers and the economy. These reforms aim to best support jobs and growth, improve life chances and deliver better outcomes with the resources we have. Separate reviews of university and college governance have already reported and arrangements are in place to further improve arrangements in both sectors. at the same time, unprecedented restructuring of Scotland’s colleges is underway, led by colleges themselves, with the key objective of better meeting both learners’ and employers’ needs. and we are introducing outcome agreements with college regions and universities, to define clearly what the Scottish Government buys for its money.

The portfolio also supports a range of measures to promote Gaelic and Scots which have an important cultural and economic impact.

By working creatively with the Scottish education system we can also help ensure that future generations will see the need to protect our environment as a means of achieving economic growth rather than as a constraint to prosperity. The portfolio supports our collective efforts across Government to advance Scotland’s position as an environmental leader, and ensure that we make the most of the economic opportunity that this provides. over a thousand Scottish schools now have ‘Green flag’ status and the portfolio continues to support sustainability and environmental awareness across the whole school community. Similarly, the portfolio supports development of the specialist skills and research needed for our ambitions in renewable energy and supports our institutions as they develop world-leading energy technology partnerships.

BUDGET CHANGES

The following changes have been made to our spending plans since publication of Scottish Spending Review 2011 and Draft Budget 2012-13.

additional resources of £17 million will be made available to the Scottish further and Higher Education funding Council to maintain our commitments on student numbers and support, and the Employability, Skills and Lifelong Learning Budget will receive an additional £16.25 million as part of the Government’s further investment in construction, skills and the green economy.

The Employability, Skills and Lifelong Learning budget received additional funding of £6 million in 2013-14 and 2014-15 as part of an overall package of £30 million to support the implementation of Opportunities for All.

£3 million for miscellaneous welfare initiatives has transferred to the Infrastructure, Investment and Cities portfolio to reflect the new Ministerial responsibilities announced on 5 September 2012.

54 | SCoTTISH DrafT BuDGET 2013-14

There have been a number of other smaller changes to realign responsibilities across the portfolio and within wider Scottish Government as a whole but with very minor net effect on the overall funding available to the portfolio.

OUR PRIORITIES

In this financial year we will:

● continue to focus resources on supporting improved outcomes for children, young people and, in collaboration with Health and Social Care Directorates, users of social care. We will continue to prioritise investment in the first years of life — where we will have the biggest impact — and preventative spend at the earliest point where problems emerge. Similarly, we will invest so that we continue to deliver a better, more relevant learning experience for all learners; a further education sector which meets our needs in terms of skills; and a higher education sector which continues to enhance its international reputation for excellence. While we will continue to invest in these priorities, we will ensure that, across the portfolio, there is less regulation and national bureaucracy and less money spent on national support and challenge to protect as far as possible those frontline services we support. at the same time, we support our partners, in local government, higher and further education and elsewhere, to continue to find efficiencies and continuous improvement in the services they deliver;

● continue to support third-sector organisations working with children, young people and families by developing, from existing resources, a new £20 million fund over the next two years. This will make funding available to the third sector for early years and early intervention activities. In these difficult economic times, this fund will work to improve life chances, building capacity within the third sector to deliver these vital services to those who need them most. In addition to this fund, we have sought to protect the funding that we provide to the third sector to support children and young people facing the greatest difficulties, including those with disabilities or those living with substance abuse in their families;

● continue to invest to improve life chances. The introduction of the Children and Young People Bill will improve children’s rights across Scotland and set in legislation our Getting it Right for Every Child (GIRFEC) approach to ensure that every child and family gets the support and help they need when they need it;

● bring further drive to delivery of the early years change programme we will establish an Early Years Collaborative early in 2013. This is an outcomes-focused, multi-agency local quality improvement programme, which will be delivered at a national scale, to deliver on the vision and priorities of the Early Years Taskforce — using the Statement of ambition as a template for joint working;

● work with Education Scotland and key partners to continue to support the implementation of Curriculum for Excellence. our focus will be the funding of the development of national Qualifications being introduced in 2013-14 and taking forward commitments on improving the quality of teaching and leadership to ensure we can prepare our young people for the challenges ahead;


● continue to work with partners to promote parental involvement in children’s learning to raise attainment and achievement; ensuring that parents have the opportunity to express their views and have them taken into account on matters affecting the education of their children, at school, at local and national level;

● continue to invest in the school estate across Scotland to reduce the number of children in crumbling schools by half again during this Parliament; and, working with local authorities through the £1.25 billion Scotland’s Schools for the Future programme, we will shortly announce support for a further 30 schools from the third and final phase of the programme. This is in addition to the 37 school building projects already announced, meaning that when complete, the programme will have delivered 67 new schools — 12 more than originally planned when the programme was announced in 2009. also, we now expect to deliver more of these schools through the non-Profit Distributing model by switching £80 million of planned capital investment in future years, allowing them to be built more quickly than originally planned;

● continue, primarily through the Scottish Social Services Council, to drive and support the development of a competent, confident and valued social services workforce;

● continue to invest in a range of measures to support the Gaelic language. our focus will be to create a secure future for Gaelic in Scotland and a stable population of Gaelic speakers;

● continue to invest in Scotland’s young people, allowing them to access a wide range of opportunities and support to get the skills they need for employment, including the creation of 25,000 apprenticeship opportunities this year and throughout the period of the Spending review;

● maintain free access to higher education by ensuring that the opportunity to learn is based on ability to learn, not the ability to pay. We are investing significant sums in Higher Education over the period of this Spending review. our support for universities, when taken together with our changes to fee arrangements for students from the rest of the uK and a series of measures to improve efficiency across our institutions, will ensure that we maintain a university sector that is internationally competitive and truly excellent in world terms;

● continue our far reaching reform of post-16 education, producing better learner journeys to equip people with the right skills to enter and stay in work. Last year, we published Putting Learners at the Centre, setting out our plans for skills, further and higher education. as part of this we are delivering a package which goes beyond our manifesto commitment for a minimum student income in higher education of at least £7,000, starting with the poorest students, and providing a simpler, more accessible and transparent system for students that recognises the financial pressures of the current economic conditions on all families. The aim of our programme of reform is to best support jobs and growth, improve life chances and deliver better outcomes with the resources we have;


● make an additional investment of £17 million which will sit alongside the efficiencies we shall continue to generate through the current programme of college regionalisation, providing the resources needed to maintain full time equivalent numbers of students in our colleges;

● support local partnerships to deliver our Opportunities for All initiative and the roll out of activity agreements to support our most vulnerable 16-19 year olds. We will continue to provide Education Maintenance allowances and we will implement our new Careers Strategy with more and better support for those who need it most;

● as we implement our youth employment strategy, Action for Jobs — Supporting Young Scots Into Work, invest £6 million in supporting young people toward and into work as part of a three year £30 million commitment. We will also ensure up to £25 million of European funding is directed toward supporting young people toward and into work. These measures will support our all Scotland, all Government youth employment strategy; and

● support employers and help people find jobs to support themselves and their families by seeking the best possible outcomes for Scotland’s people and the Scottish economy from the uK Government’s Welfare reform programme. We will refresh our approach to employability to reflect the significant changes in both the economy and the delivery landscape. We will work closely with Jobcentre Plus to create a more coherent offer of support to both jobseekers and employers.

Draft Budget for 2013-14 and Spending Plans for 2014-15 are set out below:


Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Learning 193.2 179.7 172.2

Children and families 100.6 96.7 93.4

Employability Skills and Lifelong Learning 240.4 267.2 247.5

Scottish further and Higher Education funding Council 1,577.7 1,607.1 1,596.8

Student awards agency Scotland 558.0 744.4 854.6

Total Portfolio 2,669.9 2,895.1 2,964.5

of which:

DEL resource 2,395.5 2,496.5 2,508.6

DEL Capital 148.6 108.8 108.1

aME 125.8 289.8 347.8


Table 5.02: Spending plans (Level 2 real terms) at 2012-13 prices

Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Learning 193.2 175.3 163.9

Children and families 100.6 94.3 88.9

Employability Skills and Lifelong Learning 240.4 260.7 235.6

Scottish further and Higher Education funding Council 1,577.7 1,567.9 1,519.9

Student awards agency Scotland 558.0 726.2 813.4

Total Portfolio 2,669.9 2,824.5 2,821.7

of which:

DEL resource 2,395.5 2,435.6 2,387.7

DEL Capital 148.6 106.1 102.9

aME 125.8 282.7 331.0

Learning


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

People and Infrastructure 88.4 73.4 66.7

Strategy and Performance 16.2 28.1 27.1

Learning and Support 43.3 33.8 35.2

Gaelic 20.6 21.1 21.2

Education Scotland 24.7 23.3 22.0

Total Level 2 193.2 179.7 172.2

of which:

DEL resource 109.8 118.2 121.4

DEL Capital 83.4 61.5 50.8

aME - - -


The majority of expenditure on school education in Scotland is funded by local authorities from the budgets outlined in chapter 12.

The Learning Directorate budget delivers national challenge and improvement support for education. It funds Education Scotland and the Scottish Qualifications authority.

In 2013-14, working with national partners and local government, we will:


● deliver national support for local delivery of Curriculum for Excellence including delivery of new qualifications and implementation of the assessment framework, ensuring that all children are able to benefit and their needs met;

● focus on improving attainment for all our children and young people, with a particular focus on those from deprived backgrounds;

● continue to implement the Donaldson review of teacher education, in order to develop excellent learning and teaching, supported by improved educational leadership;

● invest in a fit-for-purpose school estate through the Scotland’s Schools for the Future programme;

● support the vitality of Gaelic, working with Bòrd na Gàidhlig and with MG aLBa;

● improve and evolve Glow, the national intranet for schools, and continue support for the use of ICT in schools to enhance learning and teaching; and

● provide a national programme of support to help authorities deliver two hours of PE a week for all primary pupils and two periods for all S1 to S4 secondary pupils.

Children and Families


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Care and Justice 36.3 37.9 36.1

Children’s rights and Wellbeing 7.4 7.0 6.6

Disclosure Scotland 10.3 7.8 6.8

Early Years and Social Services Workforce 43.3 40.3 41.0

Education analytical Services 3.3 3.7 2.9

Total Level 2 100.6 96.7 93.4

of which:

DEL resource 96.5 95.7 92.9


aME - - -


Most of the expenditure on children’s services is channelled through local authorities and nHS Boards. The Children and families budget primarily supports the functions of the Scottish Children’s reporters administration, Scottish Social Services Council and Children’s Hearings Scotland, building on the reform of the children’s hearings system. It provides support for specific workforce development activities for the social


services sector and also for Centres for Excellence providing training and support for the workforce on specialist areas such as residential child care and youth justice. It also supports a broad range of activity to improve children’s services, including commitments shared with local government, such as the development of strategic commissioning strategies and improvements to care and permanence planning for looked after children.

In 2013-14 we will:

i) Continue to focus on early years and preventative spend. We will:

● introduce children and young people legislation;

● continue, through the Early Years Taskforce and our partners, to drive a shift towards preventative spend at a national level;

● continue to use the Early Years Change fund and other funds to support a range of initiatives including parenting, play, childcare, child and maternal health and family support, with the aim of helping parents and communities build better lives for themselves and their children;

● continue to support implementation of the Whole Systems approach to youth justice to maximise early intervention and minimise the impacts on young people coming to the notice of the police;

● build on our national parenting strategy that encourages agencies to work together to support new parents, giving parents the skills they need to best support their children and we will continue to expand our hugely successful PlayTalkread programme which drives home the importance of positive interaction between parents or carers and children; and

● continue to develop support for families to meet a range of needs, including flexible childcare options, support for families in conflict and significant investment in a new generation of family support centres.

ii) Help improve the life chances of vulnerable children and young people. We will:

● introduce legislation to secure children’s rights and give statutory backing to the Getting it Right for Every Child (GIRFEC) approach which plays a key role in our ambition for Scotland to be the best place to grow up in;

● working with partners, strengthen strategy and practice around looked after children and young people, children and young people at risk of going into care and young people who offend, giving a greater focus to earlier and more effective interventions to improve outcomes for some of our most vulnerable children;

● continue, primarily through the Scottish Social Services Council, to drive and support the development of a competent, confident, valued social services workforce; and


● continue to improve guidance for frontline child protection professionals and through Disclosure Scotland we will implement the second phase of the Protecting Vulnerable Groups Scheme;

Employability Skills and Lifelong Learning


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Colleges & adult Learning 7.9 7.0 6.3

Employability 1.2 0.8 0.8

Higher Education 2.0 2.0 2.0

office of the Chief Scientific adviser 6.0 3.4 3.4

Youth Employability & Skills 46.9 66.6 50.0

Skills Development Scotland 176.4 187.4 185.0

Total Level 2 240.4 267.2 247.5

of which:

DEL resource 240.4 267.2 247.5

DEL Capital - - -

aME - - -


These budgets support policy and development relating to all aspects of lifelong learning. This includes our investment in skills and national training programmes and our continued support for young people to develop their skills as they move into training and work.

Budget changes

additional funding of £6 million has been allocated in both 2013-14 and 2014-15 as part of an overall package of £30 million to support the implementation of Opportunities for All.

a further £16.25 million has been added in 2013-14 for:

● a national employer recruitment initiative that will create up to 10,000 opportunities for SME to recruit young people; and

● the establishment of an Energy Skills academy to support the creation of skills in oil and gas, renewables, thermal generation and carbon capture and storage industries.

In 2013-14 we will:

● deliver 25,000 Modern apprenticeship opportunities within an overall training target of 46,500 places;


● implement Opportunities for All, our initiative that offers an education or training place to every young person under 19 who is not already in a modern apprenticeship, job or learning;

● continue to fund the Education Maintenance allowance for young people in school and college;

● work in partnership with employers, local authorities and third-sector organisations to deliver a wide ranging package of support as part of implementing Action for Jobs — Supporting Young Scots Into Work, our youth employment strategy; and

● maximise our science spending against Government outcomes. our priorities will be Scotland’s four science centres, its family of science festivals and its science engagement outreach programmes.

Scottish Further and Higher Education Funding Council


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish funding Council fE Programme 506.9 511.7 470.7

Scottish funding Council HE Programme 1,002.2 1,041.6 1,061.8

Scottish funding Council fE/HE Capital 60.7 45.9 56.4

Scottish funding Council administration 7.9 7.9 7.9

Total Level 2 1,577.7 1,607.1 1,596.8

of which:

DEL resource 1,517.0 1,561.2 1,540.4

DEL Capital 60.7 45.9 56.4

aME - - -


The Scottish further and Higher Education funding Council budgets fund strategic investment in Scotland’s colleges and higher educational institutions (including open university (Scotland)). This funding will support the development and delivery of study programmes that offer coherent high-quality provision for learners across Scotland. It will also enable universities to undertake world-class research to maintain Scotland’s international reputation for educational excellence in teaching and research. The funding will also continue to support college provision and help colleges deliver their valuable contribution to Opportunities for All, as well as funding royal Society of Edinburgh scholarships.


Budget changes

additional funding of £17 million has been awarded in 2013-14 for student support (£11 million) and college places (£6 million).

In 2013-14 we will:

● invest in our universities so that they maintain their world-class reputation. This investment in our universities is a long-term investment in our medium and long term economic prospects through universities’ contribution to the development of a highly skilled workforce and through a world-class research base with strong links to Scottish businesses; and

● continue to implement our ambitious programme of reform of post-16 education, which aims to improve the life chances of individuals passing through the system and respond to the needs of Scotland’s economy. We will achieve this by re-focusing college provision towards those that need it most — young people and those looking for a job; and towards learning that better meets the needs of employers, and therefore the Scottish economy. at the same time, reforms to college and university governance will offer new and better arrangements for students and employers and secure a sustainable future for post-16 education in Scotland. The Scottish Government will legislate to support reform of post-16 education later in the year.

Higher Education Student Support


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

DEL

Student Support and Tuition fee Payments 325.9 302.4 307.0

Student Loan Company administration Costs 5.0 5.0 5.0

Student Loan Interest Subsidy to Bank 4.5 4.5 4.5

Cost of Providing Student Loans (raB Charge) (non-Cash) 88.4 134.0 181.6

Student awards agency for Scotland operating Costs 8.4 8.7 8.7

AME

net Student Loans advanced 241.3 408.3 468.3

Capitalised Interest (47.0) (50.0) (52.0)

Student Loans fair Value adjustment (69.0) (69.0) (69.0)

Student Loan Sale Subsidy Impairment adjustments 0.5 0.5 0.5

Total Level 2 558.0 744.4 854.6

of which:

DEL resource 431.8 454.2 506.4


aME 125.8 289.8 347.8



We will, of course, maintain access to free higher education. Higher Education Student Support provides financial support to Scottish domiciled students undertaking higher education courses in the uK and abroad and to Eu students studying in Scotland. The level of spend is demand led, depending on the student population in a given year, but an overall control is maintained on the number of students for which the Scottish further and Higher Education funding Council funds institutions. Student loans are provided at a cost to the Scottish Government which is calculated using the gross value of loans advanced in the year. The Student Loans Company administers the borrowers’ loan accounts on behalf of the Scottish Government.

The Student awards agency for Scotland (SaaS) budget meets the costs of running the agency (running costs, IT systems and capital charges). SaaS administers schemes covering student support for higher education students (at college and university) as well as bursaries for nursing and midwifery students. SaaS administers the Individual Learning accounts Scotland scheme in partnership with Skills Development Scotland.

The aME figures are forecasts and relate to the amount of aME funding for student loans which the Treasury made available to the Scottish Government through the uK Spending review published in 2010. We have developed proposals for a minimum student income of £7,250, starting with the poorest students and will implement this alongside a simpler system of higher education student support from 2013-14.

The actual amounts of student loans required by the Scottish Government will depend on the student response to increased loan availability. The associated aME forecasts set out above will therefore be subject to revision during the Spending review period.

Local Government Gaelic


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Local Government Gaelic Specific Grant 4.5 4.5 4.5

Total Level 2 4.5 4.5 4.5

of which:

DEL resource 4.5 4.5 4.5

DEL Capital - - -

aME - - -


This budget, together with other Gaelic funding lines, supports the additional costs attached to the delivery of Gaelic education and Gaelic medium education in Scotland. This funding supports Gaelic education through a wide range of Gaelic education programmes and projects.

CHAPTER 6 Justice


The Justice portfolio has responsibility for the civil and criminal justice systems which include Scotland’s prisons, courts, police, fire and rescue services, the legal aid system and criminal justice social work services.

The purpose of the Justice portfolio is to create a safer and stronger Scotland where individuals and local communities flourish, enjoying a better quality of life and improved opportunities. The portfolio’s work aims to support an inclusive and respectful society, where people live in safety and security, where individual and collective rights are supported and where disputes are resolved fairly and swiftly.


The Justice portfolio plays a central role in supporting economic recovery and increasing sustainable economic growth. It provides direct and indirect investment in jobs through its funding of services and capital investment across the Justice estate. It provides the framework through which people and businesses are protected from threats to their economic wellbeing by ensuring efficient and effective criminal and civil justice systems. It helps to support recovery from unforeseen events which might damage our prosperity by ensuring that Scotland’s emergency and rescue services have the capability and capacity to respond effectively when the unexpected happens.

Much of the work of the justice system is about responding when things go wrong, but prevention is better than cure. We know that there are underlying causes of crime that can be tackled to reduce and prevent offending, often by providing effective support at critical stages in people’s lives. That is why as a Government we have taken preventative approaches to drink, drugs and deprivation. The early years and education are also critical in ensuring a just and safe society in the future and the maintenance of conditions which support a strong economy.

BUDGET CHANGES

Scottish Prison Service (SPS)

During the Stage 3 debate for the 2012-13 Budget Bill, additional capital funding of £20 million was allocated in 2014-15 to the Scottish Prison Service (SPS), targeted towards the needs of Scotland’s female prison population.

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Police and Fire Services

The establishment of the new Scottish Police Authority (SPA) and Scottish Fire and Rescue Service bring together a range of funding from across the justice and local government portfolios. Details of these changes are set out under the relevant new Level 2 sections below.

Central Government Grants to Local Authorities

These budgets reduce significantly in 2013-14 and 2014-15 to reflect the fact that funding for police is taken out and included in the SPA budget and Fire capital Grant is now included in the Scottish Fire and Rescue Service budget.

OUR PRIORITIES

In 2013-14 we will prioritise spending in the following ways:

We will work to reduce crime, particularly violent crime. We will work jointly with partners to deter high risk and vulnerable groups from committing crime at an early stage, working with children and families as a priority. Along with tough enforcement, we will continue to support approaches which focus on early intervention and work to change offending behaviour. This includes investment in violence reduction educational programmes, in addition to innovative partnership approaches to reduce violence. We will continue to support work to protect society from sex offenders and action to tackle domestic abuse and violence against women.

We will work to reduce the damaging impacts of alcohol and drug problems. We will continue to support an approach based on tackling those criminals who supply drugs and we will invest £32.3 million to support people into recovery from addiction.

We will work to prevent offending by young people. We will put a further £1 million from the proceeds of crime into the cashback for communities initiative, enabling young people to take part in sporting, cultural and community projects and bringing the total amount invested to over £46 million, benefiting over 600,000 young people and the communities they live in. In addition, we will continue to support young people who offend through the ‘Whole System’ approach to make appropriate and timely interventions to divert them from crime.

We will work to reduce reoffending. We will continue to support tough and effective community sentencing through the community Payback Order. We will focus on early and targeted intervention to reduce reoffending through the £7.5 million Reducing Reoffending change Fund and we will look to improve links between employment, housing, education and health services to help people who have repeatedly offended access the services they need to reduce their reoffending. This change fund will support services to provide offenders with substantial one-to-one support through evidence-

66 | ScOTTISH DRAFT BuDGeT 2013-14

based mentoring schemes which will be delivered by Public Social Partnerships (PSPs). The existing evidence base suggests that mentoring is a promising intervention with the potential to:

● help offenders build new social networks that can support the desistance process;

● increase offenders’ chances of employability; and

● support offenders’ engagement with other interventions that can work to reduce reoffending (for example through signposting, increasing motivation and increasing attendance).

The evidence shows us that these outcomes are associated with reductions in reoffending in the longer term. Reducing reconviction rates and frequencies to a level which maintains or lowers the prison population will ensure that we avoid the significant costs of expanding the prison estate in future.

We will work to increase public reassurance and will ensure the effective establishment of Scotland’s single police service while maintaining our commitment to 1,000 more police officers than were in post when we took office in 2007. We will work to ensure that victims and witnesses have positive experiences of, and confidence in, the justice system.

We will work to reduce the harm from fires and other emergencies and will establish Scotland’s single fire and rescue service, protecting frontline services and enhancing effectiveness. We will continue to invest in local and national multi-agency shared service initiatives to ensure appropriate responses to emergencies.

We will work to tackle hate crime and sectarianism. We will invest £3 million to develop and support initiatives to tackle sectarianism, while continuing to support work to tackle racial or ethnic hatred. We will also maintain work to support victims in their engagement with Justice agencies.

We will continue our work to transform civil and administrative justice, reforming the courts and tribunal systems to make them more cost-effective, efficient and accessible.

We will continue to enable access to justice while advancing law reform. We will ensure that those most in need are able to access publicly funded legal assistance and progress a range of projects under the Making Justice Work Programme to enable access to justice. We will work to ensure that disputes are resolved at the most appropriate level in the justice system and will progress work to reform criminal and civil procedure to keep pace with changes in society and international standards.

We will work to enhance efficiency, ensuring that the benefits of police and fire service reform are realised. These programmes of reform will deliver recurring cashable savings from 2016-17 in excess of £130 million, ensuring that frontline services are protected at

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a time of financial constraint. We will continue to work on improving processes around the courts system and we will progress work to create a unified Scottish Tribunal system.

We will work to support victims of crime and will take forward the Victims and Witnesses Bill which will improve services to these groups while placing them at the heart of the justice system.



2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

community Justice Services 31.3 31.8 32.3

courts, Judiciary and Scottish Tribunals Service 52.4 52.1 51.6

criminal Injuries compensation 25.5 20.5 17.5

Scottish Resilience 17.9 14.0 14.0

Legal Aid 155.8 149.3 142.8

Scottish Police Authority (SPA) – 1,085.5 1,040.6

Scottish Fire and Rescue Service – 293.1 288.1

Police central Government 242.4 115.8 106.1

Drugs and community Safety 38.3 38.7 39.7

Police and Fire Pensions 281.9 291.8 309.8

Scottish Prison Service 400.6 364.5 398.7

Miscellaneous 17.9 16.2 16.8

Scottish court Service 77.0 73.3 69.4

Total Justice 1,341.0 2,546.6 2,527.4

of which:

DeL Resource 1,228.6 2,466.5 2,443.3

DeL capital 112.4 80.1 84.1

AMe – – –

central Government Grants to Local Authorities 583.2 86.5 86.5


Table 6:02: Detailed spending plans (Level 2 real terms) at 2012-13 prices

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

community Justice Services 31.3 31.0 30.7

courts, Judiciary and Scottish Tribunals Service 52.4 50.8 49.1

criminal Injuries compensation 25.5 20.0 16.7

Scottish Resilience 17.9 13.7 13.3

Legal Aid 155.8 145.7 135.9

Scottish Police Authority (SPA) - 1,059.0 990.5

Scottish Fire and Rescue Service - 286.0 274.2

Police central Government 242.4 113.0 101.0

Drugs and community Safety 38.3 37.8 37.8

Police and Fire Pensions 281.9 284.7 294.9

Scottish Prison Service 400.6 355.6 379.5


Scottish court Service 77.0 71.5 66.1

Total Justice 1,341.0 2,484.5 2,405.6

of which:

DeL Resource 1,228.6 2,406.3 2,325.6

DeL capital 112.4 78.1 80.0

AMe - - -

central Government Grants to Local Authorities 583.2 84.4 82.3

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Community Justice Services


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Offender services 24.8 25.3 25.8

Victim/witness support 5.6 5.6 5.6


Total 31.3 31.8 32.3

of which:

DeL Resource 31.3 31.8 32.3

DeL capital - - -

AMe - - -


This programme provides funding for: electronic monitoring of offenders (e.g. through Restriction of Liberty Orders) across Scotland; non local government spend on Drug and Youth courts; it supports the local authority role in Multi-Agency Public Protection Arrangements (MAPPA) in relation to sex offenders and restricted patients; it covers the running costs of community Justice Authorities; and it covers section 10 funding of voluntary organisations operating in the criminal justice social work field. This funding is in addition to resources for the support of community justice services provided by local authorities. This budget also provides core funding for third sector organisations to support victims of crime.

In 2013-14 we will:

● continue to fund victim support organisations to enable them to meet the needs of victims of crime;

● support initiatives to address the cycle of repeat offending through our Reducing Reoffending change Fund;

● maintain the budgets for community payback orders to show our support for robust community disposals; and

● take forward the recommendations of the Angiolini commission on Women Offenders to support the female prison population.


Courts, Judiciary and Scottish Tribunal Service


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

courts, Judiciary Services 10.8 10.3 10.0

Scottish Tribunal Service 11.8 11.5 11.0

Judicial Salaries* 29.8 30.3 30.6

Total 52.4 52.1 51.6

of which:


DeL capital - - -

AMe - - -

*This is non-voted spend which is met from the Scottish Consolidated Fund but is also part of the Departmental spending limit.


The funding for courts and the judiciary element of this budget provides for the Scottish Government contribution to the superannuation costs of judicial office holders in Scotland, and for the running costs of a number of justice agencies, such as the Judicial Appointments Board for Scotland. A separate budget is allocated from the Scottish consolidated Fund to meet the salary costs of judicial office holders in Scotland.

The Scottish Tribunals Service (STS) provides support to a range of tribunals operating in Scotland and is delivering the reform of the Scottish tribunal system.

Budget changes

Additional funding was allocated in 2012-13 to support the potential transfer of administrative functions for reserved tribunals operating in Scotland to the Scottish Government. The delay of this transfer will require the resources to be made available in 2013-14. Figures for 2013-14 and for 2014-15 have been adjusted to include funding to be transferred to the STS from relevant Level 3 budgets outwith Justice for the costs of tribunal administrations incorporated into the Service. These administrations support the Private Rented Housing Panel, the Homeowners Housing Panel and the Additional Support Needs Tribunals for Scotland.

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In 2013-14 we will:

● work to support a more efficient and effective service to Scottish tribunals supported by the Scottish Tribunals Service (STS) and develop the STS through the proposed Tribunals (Scotland) Bill and the potential devolution of powers from the uK Government; and

● focus our resources on ensuring an independent and effective judiciary and timely and appropriate judicial appointments.

Criminal Injuries Compensation


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Administration costs 2.7 2.7 2.7

cIc Scheme 22.8 17.8 14.8

Total 25.5 20.5 17.5

of which:


DeL capital - - -

AMe - - -


Meets the cost of compensation payments to victims of crime and a share of the running costs of the criminal Injuries compensation Authority.

In 2013-14 we will:

● continue to meet the cost of compensation payments arising from injuries which occurred in Scotland, and fund a share of the running costs of the criminal Injuries compensation Authority in line with the Memorandum of understanding.

NB: The uK Government previously laid regulations at Westminster proposing changes to the scheme. These changes would apply across Great Britain. The budget figures anticipate the impact of these uK Government led changes and the fact that the amount spent in 2011-12 was £21.1 million against a budget of £25 million. The uK Government has subsequently withdrawn the regulations pending further urgent consideration of changes to the scheme. The Scottish Government will review the budget position once the uK Government clarifies its position on the current GB scheme.

Although the criminal Injuries compensation Scheme currently operates on a GB basis, the Scottish Government has indicated that it will look at the possibility of establishing a separate Scottish scheme in the longer term.


Scottish Resilience


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Fire Services college 6.1 - -

Firelink 4.7 - -

Other Functions 7.1 14.0 14.0

Total 17.9 14.0 14.0

of which:


DeL capital 0.2 - -

AMe - - -


This budget provides support for the front line agencies that deliver fire and rescue services and for multi-agency planning and response to emergencies as well as funding for Her Majesty’s Fire Service Inspectorate in Scotland.

The budget supports work to build Scotland’s resilience through improved multi-agency planning and response to emergencies. This budget also provides funding to support the delivery of the Scottish Government’s commitment to the armed forces and veterans community in Scotland, while policy responsibility for this area lies within the Infrastructure, Investment and cities portfolio.

Budget changes

From 2013-14, funding for the Scottish Fire Services college and Firelink system transfer to the Scottish Fire and Rescue Service budget. Funding for the costs of Fire Reform moves into the Other Functions Level 3 from the Police central Government Level 2.

In 2013-14 we will:

● support effective government and multi-agency response to emergencies through the operation of SGoRR (the Scottish Government Resilience Room), the provision of ScG coordination capacity, multi-agency training and development and support for national and community resilience;

● support the delivery of the Scottish Government’s commitment to the armed forces and veterans community in Scotland;

● work with the Scottish Fire and Rescue Service to deliver the benefits of reform; and

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● fund the Fire Service Inspectorate in Scotland to provide an independent, risk based and proportionate professional inspection of the Scottish Fire and Rescue Service. Its purpose is to support the Service in delivering its functions, to promote improvement in the Service and to give assurance to the Scottish public and Scottish Ministers that the Service is working in an efficient and effective way. Through this, the Inspectorate provides external quality assurance to the Service.

Legal Aid


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Administration 11.7 11.2 10.7

Fund 144.1 138.1 132.1

Total 155.8 149.3 142.8

of which:

DeL Resource 155.7 149.2 142.7

DeL capital 0.1 0.1 0.1

AMe - - -


The Scottish Legal Aid Board (a Non-Departmental Public Body that derives its general powers and functions from the Legal Aid (Scotland) Act 1986) administers the provision of publicly funded legal assistance provided under this budget in Scotland and has responsibility for the settlement of all legal aid accounts. In addition the Board funds a range of advice services, which will be focused from October 2012 on ensuring that people in Scotland get the help and advice they need to deal with problems such as multiple debts, repossession and eviction. The Board also employs solicitors under Part V of the 1986 Act to provide a service that complements existing advice provision and helps address unmet legal need in relation to matters dealt with under civil legal assistance. Finally, the Board delivers criminal legal advice and representation to accused persons through its funding of the Public Defence Solicitors Office network.

In 2013-14 we will:

● focus our resources on maintaining access to justice as much as possible, focusing on those most in need and ensuring that legal aid expenditure supports the efficient operation of the wider justice system.


Scottish Police Authority


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Police Authority - 1,085.5 1,040.6

Total - 1,085.5 1,040.6

of which:

DeL Resource - 1,067.2 1,015.4

DeL capital - 18.3 25.2

AMe - - -


This budget funds the Scottish Police Authority and, through it, the Police Service of Scotland.

Budget changes

The establishment of the new Scottish Police Authority (SPA) brings together a range of funding from across the justice and local government portfolios.

Resource of £954.7 million is transferred from the Local Government Settlement for 2013-14 and £953.9 million is transferred in 2014-15 (including £480.3 million reclassified from central Government Grants to Local Authorities). This resource transfer includes £5.8m/£5.4m of loan charges which score outside DeL and therefore do not appear in Table 6.08. In addition, £14.8 million capital is transferred from the local government settlement for 2013-14, with £21.7 million transferred for 2014-15.

Budget of around £160 million is transferred from Police central Government, including £3.5 million capital funding which was previously ring-fenced for police IcT projects. In addition, the SPA budget also reflects savings expected through police reform — that is £42 million in 2013-14 and £88 million in 2014-15. Funding is available to support reform within the Police central Government Budget.

In 2013-14 we will:

● support the new Scottish Police Authority and Police Service of Scotland;

● continue to provide funding for the 1,000 additional police officers;

● provide for police services such as training, forensics, IcT and criminal records; and

● provide resources for serious crime and drug enforcement and counter terrorism.

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Scottish Fire and Rescue Service


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Operating expenditure - 277.8 265.8

capital expenditure - 15.3 22.3

Total - 293.1 288.1

of which:

DeL Resource - 277.8 265.8

DeL capital - 15.3 22.3

AMe - - -


This budget funds the Scottish Fire and Rescue Service.

Budget changes

£274.8 million revenue funding in 2013-14 and £273.1 million in 2014-15 has been moved from the Local Government settlement to directly fund the Scottish Fire and Rescue Service (including loan charge support on historic borrowing inherited by the Service). £7.6 million in 2013-14 and £18 million in 2014-15 representing the savings from Fire Reform have been transferred to Police central Government.

£15.1 million in 2013-14 and £22.2 million in 2014-15 have been removed from the central Government Grants to Local Authorities Level 2 to form the capital budget for the new Scottish Fire and Rescue Service (this was previously shown as the Fire capital Grant Level 3).

The following amounts have been transferred from the Scottish Resilience Level 2: Fire college (£6.0 million resource, £0.2 million capital), Firelink (£4.5 million resource); Other Functions (£0.15 million resource).

In 2013-14 Ministers’ priorities for the new Service will be set out in the Fire and Rescue Framework, which will be issued for consultation before the end of 2012.


Police Central Government


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Police Support Services 119.8 21.1 2.8

National Police Funding and Reform 122.6 94.7 103.3

Total 242.4 115.8 106.1

of which:

DeL Resource 214.3 97.9 106.1

DeL capital 28.1 17.9 -

AMe - - -


General spending by the police is met through the funding for the Scottish Police Authority. Funding remaining in the Police central Government (PcG) budget in 2013-14 includes spending on building the new Scottish crime campus at Gartcosh, funding the Police Investigation Review commissioner (PIRc), the Scottish Safety camera Programme and Airwave.

Budget changes

£236.9 million of funding was set out within the PcG budget for 2013-14 in the Scottish Spending Review 2011. A significant part of this is now part of the wider Scottish Police Authority (SPA) funding, including funding for 1,000 additional officers, forensics services, police training, criminal records, IcT, serious crime and drug enforcement and counter terrorism. The funding transferring from PcG to SPA also reflects the savings expected from police reform.

Significant budget (of the order of £60 million in 2013-14 and £70 million in 2014-15) is available to support police reform.

In 2013-14 we will:

● complete the new Scottish crime campus at Gartcosh;

● support the new Police Investigations and Review commissioner (PIRc);

● invest in police reform to deliver savings in this and future years;

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● continue to save lives and reduce serious injury through the Police Safety camera Programme; and

● continue to fund the core Airwave communication system for police in Scotland.

Drugs and Community Safety


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

community Safety 6.4 6.4 7.4

Drug Misuse 31.9 32.3 32.3

Total 38.3 38.7 39.7

of which:


DeL capital - - -

AMe - - -


The bulk of this budget is allocated to the Alcohol and Drug Partnerships via NHS Boards to direct into services to promote Recovery from drug addiction. This budget also supports the strategic operation of Alcohol and Drug Partnerships along with a range of initiatives to build safer communities and tackle sectarianism, drug problems and crime.

Budget changes

Figures for 2013-14 and 2014-15 have been adjusted to include a transfer from education for funding relating to Scottish Training on Drugs and Alcohol (£0.4m/£0.4m).

At a Budget Revision stage the Drugs and community Safety budget will be increased to include funds recovered under the Proceeds of crime Act. Ministers will use this to invest in positive opportunities for young people and divert them from crime and antisocial behaviour.

In 2013-14 we will:

● work towards creating a sectarian-free Scotland which is inclusive, fair and celebrates the positive identity of our many diverse communities. This includes working to tackle sectarian behaviour through the Offensive Behaviour at


Football and Threatening communications (Scotland) Act 2012 while focusing activity at grassroots community level and around specific areas like football;

● work to reduce problem drug use by supporting people to recover and to sustain recovery in our communities;

● work to reduce crime, violence and antisocial behaviour by tackling its root causes, funding violence reduction educational programmes, anti-violence initiatives, promoting positive behaviour and building strong and resilient communities; and

● continue to develop and grow the cashBack for communities programme to provide positive opportunities for our young people.

Police and Fire Pensions


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Police Pensions 222.6 231.0 249.6

Fire Pensions 59.3 60.8 60.2

Total 281.9 291.8 309.8

of which:

DeL Resource 281.9 291.8 309.8

DeL capital - - -

AMe - - -


This budget provides funding to police and fire authorities to meet the pension costs of retired police and fire officers.

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Scottish Prison Service


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

current expenditure 325.1 342.0 366.2

capital Spending 75.5 22.5 32.5

Total 400.6 364.5 398.7

of which:

DeL Resource 325.1 342.0 366.2

DeL capital 75.5 22.5 32.5

AMe - - -


The Scottish Prison Service (SPS) is an executive Agency of the Scottish Government and is answerable to the cabinet Secretary for Justice.

In 2013-14 we will:

● complete the construction of HMP Grampian and prepare for the new prison opening in winter 2013-14 as a replacement for the existing HMPs Aberdeen and Peterhead;

● implement improvements to the management of women offenders in Scotland in line with the accepted recommendations from the work of the Angiolini commission on Women Offenders. This work will be supported by the provision of additional capital funding of £20 million in 2014-15;

● take forward the construction of HMP Inverclyde;

● acquire a site for HMP Highland, the planned replacement of the existing HMP Inverness; and

● work with community Justice Authorities and other partners to reduce the risk of prisoners reoffending on release from custody.

Budget changes

During the Stage 3 debate for the 2012-13 Budget Bill, additional capital funding of £20 million was allocated in 2014-15 to the Scottish Prison Service, targeted towards the needs of Scotland’s female prison population.


Miscellaneous


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Residential Accommodation for children 5.5 5.5 5.5

Other Miscellaneous 12.4 10.7 11.3

Total 17.9 16.2 16.8

of which:


DeL capital - - -

AMe - - -


This budget covers a wide range of smaller justice related spending areas such as residential accommodation for children, the Scottish Law commission, the Parole Board for Scotland, the Risk Management Authority and the Scottish criminal cases Review commission.

In addition, this budget includes provision for Her Majesty’s Inspectorate of Prisons in Scotland and Her Majesty’s Inspectorate of constabulary in Scotland.

Scottish Court Service


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Operating expenditure 68.5 67.3 65.4

capital 8.5 6.0 4.0

Total 77.0 73.3 69.4

of which:


DeL capital 8.5 6.0 4.0

AMe - - -

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The Scottish court Service (ScS) provides the people, buildings and technology to support the work of Scotland’s courts, the judiciary of those courts and the Office of the Public Guardian. The ScS is a Non-Ministerial Department led by a governing board, chaired by the Lord President and with a majority of judicial members.

Budget changes

Figures for 2013-14 and 2014-15 have been adjusted to include a transfer to the Scottish Tribunals Service to support the funding for shrieval conveners.

In 2013-14, we will work with the judicially led ScS on:

● continuing to balance the demands on courts with available staffing and capacity;

● taking forward reforms to the structure and processes of the court through the cross-justice Making Justice Work programme, including further reducing inefficiency in the use of court time and ensuring a court estate that is cost-effective, proportionate and accessible;

● working, along with other justice bodies, to deliver key reforms to the criminal justice system, in particular arising from Lord carloway’s review of criminal justice and Sheriff Principal Bowen’s review of sheriff and jury procedures;

● continuing work to enhance the use of technology in how people access justice;

● establishing the Scottish civil Justice council and other measures to support vital reform to Scotland’s civil courts; and

● completing the essential redevelopment of the historic Parliament House court complex.




2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Police 480.3 - -

criminal Justice Social Work 86.5 86.5 86.5

Fire capital Grant 16.4 - -

Total 583.2 86.5 86.5

of which:

DeL Resource 566.8 86.5 86.5

DeL capital 16.4 - -

AMe - - -


Following the concordat agreement between the Scottish Government and local authorities, most of the previous budget for ring-fenced grants was added to the budget for general support to local authorities. This table shows the three remaining areas where there are ring-fenced grants to local authorities (or similar bodies) for justice purposes.

Budget changes

The establishment of the new Scottish Police Authority (SPA) brings together a range of funding from across the justice and local government portfolios. As a result the budget of £480.3 million is reclassified from central Government Grants to Local Authorities to directly fund the Scottish Police Authority.

The Fire capital Grant Level 3 transfers to form the capital budget of the Scottish Fire and Rescue Service.

CHAPTER 7 Rural Affairs and the Environment


The Rural Affairs and Environment portfolio has responsibility for protecting the environment and for developing rural Scotland through working with rural industries and communities. It is a wide-ranging portfolio that includes the Scottish Government lead on climate change and covers agriculture, marine management and policy, aquaculture, forestry, rural development and environmental policy. Our overarching aim is to grow the rural economy through:

● community empowerment;

● improving rural connectivity;

● building up our world-class food and drink industry;

● supporting renewables, enhancing our natural resources, and tackling climate change; and

● investing in the research base.


Since the publication of the Scottish Spending Review in 2011 the economic pressures have only increased, with the demand for action to stimulate economic recovery all the more urgent. The Rural Affairs and Environment portfolio has a particular focus on rural Scotland and we are taking action wherever possible to ensure that all those living and working in our rural areas contribute to, and benefit from, a strong, cohesive Scottish economy.

In the 2011 Spending Review, we therefore focused our limited resources on measures that would support jobs and growth. In particular, we more than doubled the food and drink industry budget; established a new Next Generation Digital Fund to enhance digital connectivity in rural areas; supported community empowerment by creating a new land fund; and maintained and increased resources for the Land Managers’ Renewables Fund. Substantial progress has been made in delivering each of these initiatives, while we continue to invest in the rural economy through the Scottish Rural Development Programme (SRDP) and the European Fisheries Fund (EFF). These programmes include funding for capital projects across Scotland, supporting local industries and providing local jobs.


Our investment in scientific research provides a foundation for the sustainable use of our natural resources and supports innovation and economic growth across a broad base of rural, environmental and related areas, allowing our businesses to be more competitive, to improve the quality of the goods and services they deliver and to increase the efficiency with which they use resources. Our investment supports a number of the key growth sectors identified in the Government Economic Strategy including Food and Drink (including Agriculture) and Life Science (Animal Health) industries.

The portfolio underpins the sustainable elements of Scotland’s economic growth strategy. Scotland’s natural assets are key to the success of much of Scotland’s economy and our programmes ensure that our natural resources and environmental assets — both on land and in our seas — are used and managed for current and future generations. At a global scale, the portfolio leads the Government’s work on emissions reduction and works with other government portfolios to deliver on our climate change targets and to support the development of the low carbon economy.

BUDGET CHANGES

Our spending plans include the following changes made since the publication of Draft Budget 2012-13 which showed total budget plans of £511.5 million for 2013-14 and £513.5 million for 2014-15. These changes in total budget result in a net increase to plans of £9.6 million and £8.6 million respectively giving the revised budget figures of £521.1 million and £522.1 million in table 7.01 below.

Changes to Capital budget allocations

Additional capital budgets for Digital High Speed Broadband of £14.0m/£12.8m were allocated from consequentials.

Minor adjustment of £-0.2m/£0.0m to Forest Enterprise capital budgets relating to the re-profiling of works on the upgrade of visitor facilities as a result of additional allocations in 2012-13 and 2013-14 to shovel ready projects.

Transfer to/(from) Administration

Transfer to Administration of £4.5m/£4.5m relates to the provision of facilities and estates services to Marine Scotland. This is an annual transfer previously given effect through an in-year budget revision and does not reflect an increase in expenditure.

Transfer from Administration of £0.2m/£0.2m to the Drinking Water Quality Regulator to fund the reclassification of functions directly involved in service delivery as programme rather than administration spending.

Other minor changes

Additional allocation of £0.1m/£0.1m to Scottish Natural Heritage for the monitoring of the beaver population in Tayside.

RURAL AFFAIRS AND THE ENVIRONMENT | 85

OUR PRIORITIES

Our priorities are to:

● increase further our commitment to Scotland’s food and drink industry and to food education, more than doubling the ongoing budget for food industry support over the spending review period;

● empower communities through a range of measures, including the climate challenge fund, the new Scottish Land Fund, setting up of the Land Reform Review Group and investment in renewables and rural broadband;

● create the framework required for the sustainable economic development of Scotland’s offshore wind and marine renewables sector;

● establish a Next Generation Digital Fund to support the roll out of next generation broadband across Scotland, with a particular focus on rural and remote areas;

● continue support for the Climate Challenge Fund to underline our commitment to community-led action on climate change and the wider Sustainable Action Fund to support implementation of the Public Engagement Strategy on climate change and fulfilment of the Public Bodies Duties provisions of the Climate Change Act;

● provide financial support for our rural economy through payments to farmers and land managers, so often the mainstay of fragile rural communities;

● invest through the European Fisheries Fund in order to deliver our commitment to assist with capital investment, increasing competitiveness in the aquaculture, fishing and fish processing industries, and to promote a resilient fleet structure — sectors that contribute significantly to the Scottish economy and that directly support many rural economies;

● provide a regulatory and policy framework to support continued sustainable growth of Scotland’s aquaculture sector towards industry targets of a 50 per cent increase in marine finfish production and 100 per cent increase in shellfish production by 2020;

● work actively to reform the Common Fisheries Policy, shape the post-2014 European Marine and Fisheries Fund and to implement the inshore fisheries strategy;

● secure a good deal for Scotland in the negotiations between the European Commission, the Member states and the European Parliament, on the European Union budget for 2014-20 — including the budget for the Common Agricultural Policy (CAP) — and on the detailed rules for the CAP during that period. We are seeking to increase Scotland’s unfairly low share of CAP expenditure, and to secure the flexibility to adapt the new CAP to Scotland’s circumstances;

● prepare to deliver improved customer service for CAP 2014-20 facilitated by investment in a new IT system;


● manage the end of the 2007-13 Scotland Rural Development Programme and the transition to the 2014-20 programme as smoothly as possible, taking into account constraints imposed by EU rules and procedures;

● continue to fund a strategic programme of research to support: effective policy and practice; innovation and the economy — including in the key growth sectors of food and drink and life sciences — and scientific excellence in order to maintain the competitive position of the Scottish science base and ensure that government and industry has access to high-quality evidence. We will also continue to support and facilitate collaborative and multidisciplinary science and links with the Research Councils and with the EU to ensure Scotland is well positioned to take advantage of emerging science-based market opportunities;

● implement the Waste (Scotland) Regulations 2012, which have the potential to deliver £200 million worth of savings (through to 2025) on the costs of managing all of Scotland’s waste;

● maintain our investment in flood protection and our programme of work to implement the Flood Risk Management (Scotland) Act 2009. This is a major programme of work for the government and responsible authorities, which will provide reassurance to communities and businesses at risk of flooding and could save costs in the future;

● continue to invest in visitor infrastructure in our National Parks, including levering in private sector funding, to generate further economic growth through enhanced visitor experience, sustainable tourism and support to local businesses and rural communities;

● aim to increase woodland planting to 10,000 hectares per year including the creation of over 1,000 hectares of new woodlands on the national forest (in particular around Scotland’s towns and cities), recognising that forestry continues to be an area of major importance for climate change. The government will invest £64 million in the Forestry Commission and Forest Enterprise in 2013-14; and

● invest in peatland restoration, as part of our further investment in construction, skills and the green economy. Peatlands offer a number of multiple benefits to the Scottish economy, environment and society, e.g. water quality, biodiversity and potential carbon benefits. There is uncertainty as to the scale of these benefits and during 2013 we expect to see internationally validated carbon figures. This will allow us to take further decisions on a peatland restoration programme based on a greater understanding of costs and benefits. The investment will help us to recognise the multiple benefits provided by our peatlands but also allow us to be prepared to maximise the opportunities international validation of the carbon benefits will provide.


Draft Budget for 2013-14 and Spending Plans for 2014-15 are set out below:


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

EU Support and Related Services 116.4 105.4 103.3

Research, Analysis and Other Services 77.1 74.2 73.2

Marine and Fisheries 59.2 53.9 57.2

Environmental and Rural Services 193.2 204.3 205.9

Climate Change 19.5 19.5 19.4

Forestry Commission 42.4 41.3 41.4

Forest Enterprise 23.1 22.5 21.7

Total Level 2 530.9 521.1 522.1

of which:

DEL Resource 495.8 480.1 478.4

DEL Capital 35.1 41.0 43.7

AME – – –

Table 7:02: Detailed spending plans (Level 2 real terms) at 2012-13 prices

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

EU Support and Related Services 116.4 102.8 98.3

Research, Analysis and Other Services 77.1 72.4 69.7

Marine and Fisheries 59.2 52.6 54.4

Environmental and Rural Services 193.2 199.3 196.0

Climate Change 19.5 19.0 18.5

Forestry Commission 42.4 40.3 39.4

Forest Enterprise 23.1 22.0 20.7

Total Level 2 530.9 508.4 496.9

of which:

DEL Resource 495.8 468.4 455.3

DEL Capital 35.1 40.0 41.6

AME – – –


EU Support and Related Services


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Single Farm Payment Scheme ** 434.0 434.0 434.0

Scottish Beef Calf Scheme 21.0 21.0 21.0

Business Development 43.8 36.8 42.5

Less Favoured Area Support Scheme 65.5 65.5 65.5

Agri Environment Measures 40.0 38.0 38.0

Forestry 3.5 2.7 2.4

Rural Enterprise 9.2 9.0 9.0

Rural Communities 5.0 4.0 4.0

Leader 10.5 10.5 10.5

Technical Assistance 0.3 0.3 0.3

Crofting Assistance 0.7 0.7 0.7

Payments and Inspections Administration Costs 36.6 34.7 33.6

CAP Compliance Improvements 3.3 3.3 3.3

EU Income (557.0) (555.1) (561.5)

Total 116.4 105.4 103.3

of which:


DEL Capital 19.1 15.9 15.2

AME – – –

** includes energy Crop Payments


● The EU Support and Related Services Level 2 budget provides support to the rural economy through the Common Agricultural Policy. Agriculture is an important element of the Scottish economy with a large number of people in rural areas directly employed in agricultural activities. The direct support measures (Single Farm Payment and the Scottish Beef Calf Scheme, £455 million in 2013-14) support over 20,000 producers, providing stability for farmers and leading to a sustainable agricultural sector. Funding is solely from the EU European Agricultural Guarantee Fund (EAGF).

● The Scotland Rural Development Programme (SRDP) funding running over the period 2007-13 comprises National funds, National Modulation, Compulsory Modulation and funding from the European Agricultural Fund for Rural Development (EAFRD). The total EU funding for the Programme period is €679 million. The National funds component includes funding from the Forestry


Commission Scotland (Woodland Grants) and the Environmental and Rural Services budget (Scottish Natural Heritage). The rate and level of draw down of EAFRD depends on the amount of National funds, the co-financing rate and the exchange rate. The 2013-14 budget will cover the final year of the 2007-13 programme.

● Through the Payments and Inspections Administration Costs, we deliver regulatory functions in relation to national and international legislation. This includes carrying out inspections to enforce marketing standards for our eggs, fresh fruit and vegetables. We also provide expert scientific and technical advice and information services on agricultural crops and aspects of the environment.

● The CAP Compliance Improvements budget funds projects to prepare for the new Common Agricultural Policy and to enable improved compliance with EU regulations relating to support and development measures e.g. by upgrading our mapping systems to meet new regulations.

Research Analysis and Other Services


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Programmes of Research 58.7 56.7 55.7

Royal Botanic Garden Edinburgh 11.1 11.1 11.1

Contract Research Fund 5.9 5.0 5.0

Economic and Other Surveys 1.4 1.4 1.4

Total 77.1 74.2 73.2

of which:



AME – – –


The Research Analysis and Other Services Level 2 budget funds short- and long-term scientific research to support the work of government and its advisory bodies in policy development and implementation and helps maintain Scottish-based scientific capability of international standard at our Main Research Providers (MRPs)1 adapting and evolving the infrastructure and skills base to meet current priorities and future challenges.

1 University of Aberdeen’s Rowett Institute of Nutrition and Health, Royal Botanic Garden Edinburgh, The James Hutton Institute, Moredun Research Institute, and the Scottish Agricultural College


The budget supports the prevention of problems and helps ensure that future threats to the economy, environment and society and associated costs are minimised through funding research on key challenges such as climate change mitigation and adaptation, animal and plant disease, food security and resource shortages and pressures.

In addition, the budget supports the work of the Royal Botanic Garden Edinburgh and enables Scottish Government to build links and partnerships with other funders and providers of research — including the UK Research Councils and the University sector — to maximise the value of our research investment and ensure Scotland is well positioned to harness emerging science-based market opportunities.

In 2013-14 we will:

● continue to fund the current five-year programmes of strategic research focused on ‘Environmental Change’ and ‘Food, Land and People’, being delivered by our MRPs;

● fund policy facing Centres of Expertise in Climate Change, Water and Animal Disease and use performance data and feedback from Year One, to further improve their support for policy and effective delivery of outcomes;

● target development of the Food and Drink and Animal Health sectors by supporting Strategic Partnerships with the university sector and industry. We will also seek to identify other areas of economic opportunity where relationships between research and industry can be strengthened; and

● continue to support the Royal Botanic Garden Edinburgh’s work including on conservation of species and biodiversity.

Marine and Fisheries


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Marine Scotland 54.3 49.0 48.0

EU Fisheries Grants 10.0 10.0 18.5

Fisheries Harbour Grants 0.4 0.4 0.4

EU Income (5.5) (5.5) (9.7)

Total 59.2 53.9 57.2

of which:



AME – – –



The Marine and Fisheries budget supports the sustainable use of Scotland’s coasts and seas and freshwater fish populations. These natural resources are vitally important to sustainable economic growth and especially so in coastal and remote rural areas.

Marine Scotland is the key body with the job of managing the sea and the activities which impact on it. It has responsibility for monitoring all marine and fisheries related activity in Scotland’s seas, coasts and ports and does this through a network of local officers, surveillance vessels and aircraft. There is a constant need to ensure that national and international regulations in place to protect the health of fish stocks and the marine environment are complied with.

The need for marine expertise and capability is growing with the new commitments on renewable energy and increased international requirements. We have redirected resources and capacity to offshore energy, creating new licensing and planning teams with scientific support, but we recognise that these areas continue to develop and we will strengthen these areas further in the years ahead, while also continuing to support well-established marine activities such as fisheries and aquaculture.

In 2013-14 we will:

● publish the National Marine Plan for Scotland to ensure balanced use of the seas within a wider ecosystems approach;

● promote a marine planning approach to sustainable marine renewable developments;

● through Common Fisheries Policy reform, continue to work towards radical reform of EU fisheries policy and discard-free fisheries;

● deliver on the new inshore fisheries strategy announced in January 2012;

● continue to develop with industry innovative and effective approaches to sustainable fisheries management and continue efforts to secure Marine Stewardship Council sustainability for Scottish fish stocks;

● support industry to increase the value of Scottish seafood and maximise marketing opportunities through the work of the Scottish Seafood Partnership focusing on the supply chain from net to plate;

● continue to support the sustainable development of the Scottish fisheries, aquaculture and fish processing industries through grants awarded through the European Fisheries Fund;

● improve the management and regulatory frameworks within which the aquaculture industry and recreational fisheries operate through the Aquaculture and Fisheries Bill due to be introduced in the Autumn; and

● sustain our science base to provide robust evidence in support of policy developments and delivery.


Environmental and Rural Services


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Natural Heritage 57.8 55.3 53.1

National Park Authorities 13.1 12.9 12.9

Natural Resources 0.3 0.3 0.3

Scottish Environment Protection Agency 38.0 37.5 37.5

Zero Waste 26.4 26.4 26.4

Natural Assets and Flooding 5.2 5.3 5.7

Next Generation Digital Fund 8.0 26.0 27.8

Crofting Commission 4.0 1.0 2.5

Rural Cohesion 3.4 3.6 3.8

Agricultural and Horticultural Advice and Support 4.1 4.0 4.1

Veterinary Surveillance 5.2 5.2 5.2

Animal Health 20.0 18.9 18.2

Food Industry Support 4.5 4.5 5.0

Private Water 2.8 2.8 2.8

Drinking Water Quality Regulator 0.4 0.6 0.6

Total 193.2 204.3 205.9

of which:

DEL Resource 184.8 186.4 189.1


AME – – –


The Environmental and Rural Services Level 2 budget primarily supports the commitment, set out in the National Outcomes, to ‘value and enjoy our built and natural environment and protect it and enhance it for future generations’. It also directly supports sustainable rural development, the food and drink industry and the empowerment of rural communities.

In 2013-14 we will:

● support Scottish Natural Heritage to provide advice on Scotland’s natural environment and wildlife, to deliver Scotland’s biodiversity targets and help meet our European and international obligations, and to help to ensure that new developments take proportionate account of our valuable natural heritage;

● invest in our National Park Authorities as models of sustainable rural development, working in partnership to promote and enhance visitor experience,


generate growth, enhance landscapes and biodiversity, support thriving communities and get the best from our land;

● continue to implement the Wildlife and Natural Environment (Scotland) Act 2011 to help address issues such as invasive non-native species, in order to maximise environmental and economic benefits while minimising irresponsible or damaging practice;

● work with partners to implement the Land Use Strategy in order to achieve a more integrated approach to land use and maintain the future capacity of Scotland’s land;

● enable the Scottish Environment Protection Agency (SEPA) to carry out its regulatory functions and to continue to safeguard Scotland’s environment and human health. SEPA’s spending is largely determined by the need to implement and enforce regulatory regimes required by national and EU legislation. SEPA will continue to monitor the quality of Scotland’s environment and to implement the Water Environment and Water Services (Scotland) Act 2003 and support the implementation of the Flood Risk Management (Scotland) Act 2009. We will work with SEPA on our programme of better environment regulation. In 2012-13 this will include the introduction of the Better Regulation Bill which will support SEPA’s transformation programme and improve the way environmental regulations are applied across Scotland. This will benefit our environment and economy;

● support, through the Zero Waste budget, a range of programmes, including implementing the Waste (Scotland) Regulations 2012; developing markets for recyclate use; waste prevention and minimisation; reuse and recycling awareness; support for community recycling groups; and support for local authorities to achieve waste targets in 2013 and beyond. In addition, the budget funds work to tackle litter and flytipping;

● support our actions to protect the land, air and water environment, and to protect communities from pollution, flooding, noise and nuisance through the Sustainable Action Fund (within the Climate Change Level 2 budget) and the Natural Assets and Flooding budgets. The funding provided for Natural Assets and Flooding supports initiatives on flood risk management and research to assist policy development in these areas. Resources are also provided for air quality support measures, which are designed to improve air quality in hot spots. In addition, funding for noise supports the costs of ongoing mapping and action planning required under the EU Environmental Noise Directive;

● accelerate the roll out of Next Generation Broadband across remote and rural Scotland through the Step Change 2015 programme. The programme will be structured in a way that facilitates the achievement of local needs and priorities as well as national targets. Responsibility for the fund rests with the Infrastructure, Investment and Cities portfolio and further details are available in that chapter. As much of the investment will be targeted in rural areas, the spending plans for the Next Generation Digital Fund are shown in this portfolio chapter;


● ensure that farm and other land management businesses have access to expert advice and support on a wide range of issues. In 2013-14 we will ensure these services are focused on the key priorities of climate change, sustainability, and overall business performance;

● deliver continuing improvements in the health and welfare of Scotland’s livestock, working with industry partners on an animal health strategy that fits the distinctive circumstances of our livestock sector, including an industry-led programme to control bovine viral diarrhoea. The animal health budget now includes budgets devolved from Westminster that cover the activities of the Animal Health and Veterinary Laboratories Agency as well as our contribution to the British Cattle Movement Database. In 2013-14 our veterinary surveillance arrangements may change as a result of the Kinnaird review, requiring some funding from the budget to support the transition;

● continue to invest in Scotland’s food and drink industry, more than doubling the programme budget over the spending review period, supporting effective and efficient supply chains and collaborative ventures and working with stakeholders to ensure that sales of Scotland’s food and drink continue to grow;

● continue our investment in rural cohesion, including the new Scottish Land Fund to support community land purchase and appointing the Land Reform Review Group;

● ensure that the Private Water budget supports actions to sustain and improve the health of the people of Scotland through good safe drinking water. Provision is made to protect the quality of private drinking water supplies through the preparation of information and advice aimed at improving public understanding of how to protect and maintain such supplies. This is supported by the Private Water Supply Grant Scheme, which provides financial assistance to users of private water supplies towards the upgrade of these supplies; and

● support the Drinking Water Quality Regulator for Scotland (DWQR) in carrying out its duties under the Water Industry (Scotland) Act 2002.


Climate Change


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Climate Change Policy Development and Implementation 1.2 1.2 1.1

Sustainable Action Fund 15.3 15.3 15.3

Land Managers’ Renewables Fund 3.0 3.0 3.0

Total 19.5 19.5 19.4

of which:



AME – – –


The Climate Change budget supports the development and implementation of the government’s climate change policy and provides resources for both the Sustainable Action Fund and the Land Managers’ Renewables Fund.

In 2013-14 we will:

● continue to lead work to support the delivery and achievement of the Scottish climate change targets, and other work to support implementing the requirements of the Climate Change (Scotland) Act 2010;

● continue the work of the Sustainable Action Fund (SAF), which includes the flagship Climate Challenge Fund, and work to influence low carbon behaviours across Scotland; and

● continue to offer and increase the funding for the CARES loans for rural businesses established in 2011-12 to address the costs associated with the pre-planning stage of renewable energy projects for farmers and land managers.


Forestry Commission


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Woodland Grants 36.0 36.0 36.0

Policy, Regulation and Administration 5.1 5.1 5.1

Programme Costs 21.0 19.9 20.0

Depreciation 0.1 0.1 0.1

EU Income (19.8) (19.8) (19.8)

Total 42.4 41.3 41.4

of which:



AME – – –


Forestry Commission Scotland works to increase the contribution of Scotland’s forests to health and wellbeing, the Scottish economy and environmental sustainability. It does this by regulating and supporting the private forestry sector, sustainable management of the Scottish Ministers’ national forest estate, promoting the expansion and sustainable management of Scotland’s woodlands, increasing the contribution of woodlands to the quality of our towns and cities through the Woodlands In And Around Towns initiative, and supporting projects which reduce the impact of timber transport operations. Climate change will continue to be an area of major importance for forestry, with the aim of increasing woodland planting to 10,000 hectares per year. Along with Scottish Natural Heritage, Forestry Commission Scotland is a lead partner for the Central Scotland Green Network.

In 2013-14, we will:

● continue support for woodland expansion, implementing agreed recommendations from the Woodland Expansion Advisory Group;

● promote predictable and stable timber supplies to help the Scottish economy, working with industry stakeholders to assess the implications of the latest forecast of softwood availability;

● invest in research on timber product development and use of timber in construction;

● use woodland access to help improve physical and mental health in Scotland;

● champion the Central Scotland Green Network and catalyse action on the ground;


● stimulate management of native and ancient woods using information from the Native Woodland Survey of Scotland;

● work with other government Directorates to further promote the development of biomass for heat;

● provide information to help forest managers consider how best to adapt to climate change when planning future management of forests;

● enhance pest/pathogen vigilance and rapid response capacity; and

● promote landscape-scale restoration exemplar projects to contribute to the National Ecological Network.

Forest Enterprise


2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Operating Costs 21.1 21.1 20.1

Land Purchases and Woodland Creation 10.0 10.0 10.0

Capital Expenditure 2.0 1.4 1.6

Land Sales (10.0) (10.0) (10.0)

Total 23.1 22.5 21.7

of which:



AME – – –


The Forest Enterprise Scotland budget supports the sustainable management of the national forest estate, maintains effective planning and consultation systems, maximises the value to the Scottish economy of the estate’s timber resource, other forest products and estate assets, uses the estate to conserve and enhance biological diversity, cultural heritage and, landscape quality, and increases the opportunities for all to visit, enjoy and learn from the estate.


● advance the next phase of renewables developments on the national forest estate in support of the Scottish Government’s renewable energy targets;

● sustain at least three million cubic metres of timber production on the national forest estate through the economic downturn;


● continue to deliver an integrated skills programme for the jobless;

● create over 1,000 hectares of new woodlands each year on the national forest estate;

● offer opportunities to new entrants into farming, through the creation of starter farm units; and

● invest in the upgrading of visitor facilities critical to the rural tourism economy.

CHAPTER 8 Culture and

External Affairs


The Culture and External Affairs portfolio includes policy on culture, the new and historic built environment, Scotland’s National Collections, performing companies and documentary heritage and European and International affairs. The portfolio also includes the budget for the Young Scots Fund to support youth employment and emerging young talent in sport, enterprise and creativity, working across other Scottish Government portfolios.

The portfolio seeks to promote Scotland’s interests and identity at home and abroad and contributes to delivering Scotland’s economic ambition, investing capital in Scotland’s cultural and heritage infrastructure. It aims to enhance the quality of life for Scotland’s communities through maximising access to high-quality cultural events and opportunities and to help young people’s learning and creativity through engagement with culture and heritage. It promotes, protects and provides access to Scotland’s historic environment through Historic Scotland and promotes the delivery of high-quality places and buildings to support Scotland’s communities.


The Scottish Government is developing strong relationships with a carefully selected number of countries to bring a sharp economic focus to our work and to strengthen Scotland’s position in the world. Our International Framework is supported by a series of targeted plans with China, India, Pakistan, South Asia, Canada and the USA.

With the EU, North America and China of key strategic importance to Scotland and the economy, we are maintaining our on-the-ground presence in Brussels, Washington, Toronto and Beijing. Our presence in these key markets promotes Scotland as a modern nation with a competitive advantage, supported by a modern economy with rapidly growing sectors like low carbon technologies, creative industries, cutting-edge life sciences and food and drink.

The Action Plan on European Engagement supports the International Framework and sits alongside the targeted plans for countries outside of Europe. It highlights the EU policy priorities of energy and climate change; marine environment; research and creativity; and freedom, security and justice where the Scottish Government has a key role to play in enhancing Scotland’s profile in Europe. This focuses Scotland’s engagement where we have specific devolved interest and clear expertise and can benefit fully from the


opportunities available. The EU provides Scotland with access to the world’s largest trading market — the Single Market of almost half a billion consumers — and is our most important overseas export market, worth £9.8 billion in 2010.

The USA remains Scotland’s largest overseas tourism market and exports to the USA alone are worth more than £3 billion a year to the Scottish economy, with food and drink exports to the USA growing almost 30 per cent in 2011 and strongly contributing to the Scottish Government’s ambition to grow Scotland’s exports 50 per cent by 2017.

Scotland is well established as a leading events destination. Events yield significant benefits for Scotland with clear evidence that our continued support for major events can drive economic growth and generate a positive impact and legacy that enhance our international profile and reputation.

Scotland’s Creative Industries Sector, one of the seven Growth Sectors in the Government Economic Strategy, contributes £2.7 billion to Scotland’s economy with direct employment in the sector exceeding 70,0001.

The impact of the arts and creative industries on local economies across Scotland is also significant, and highlights relative strengths of diverse sectors. Though Glasgow and Edinburgh account for 40 per cent of all employees in the arts and creative industries — according to recent research2 — other areas also record high levels of employment in those sectors: including the Borders, where textiles and fashion feature as key; Orkney where it is crafts and heritage; and in Shetland where it is fashion, textiles and heritage. Dundee is known the world over as a centre of excellence in computer games development, with computer games, software and electronic publishing worth over £1 billion to the Scottish economy in 20103.

The architecture sector adds to economic growth through the export of services. Innovation in Scottish architecture is key to developing a sustainable future, creating green jobs, reducing carbon emissions and contributing to Scotland’s reputation as the green powerhouse of Europe. The role of architecture is also important in supporting and developing Scotland’s communities. Our best Scottish architecture reflects our creativity and innovation and sense of cultural identity.

To this end, we are developing a new policy on architecture and place making which responds to the changing nature of built environment issues. The new policy will encourage the creation of buildings and places which succeed in bringing together activities and services for the people of Scotland to fulfil their potential in business and society.

Through the provision of technical and scientific advice Historic Scotland is leading on improving the energy efficiency of Scotland’s 460,000 traditional buildings and making a significant contribution to the Government’s carbon reduction targets. In its regulatory role it is continuing to improve and simplify the planning system, and working in partnership with Glasgow School of Art, it is enhancing Scotland’s reputation for innovation and

1 http://www.scotland.gov.uk/Topics/Statistics/Browse/business/SABS2 Economics Impact Study — An Approach to the Economic Assessment of Arts and Creative Industries in Scotland

June 20123 http://www.scotland.gov.uk/Topics/Statistics/Browse/Business/SABS

CULTURE AND EXTERNAL AFFAIRS | 101

excellence at home and internationally through the 3D laser scanning of five international sites as well as the five World Heritage Sites in Scotland — the Scottish Ten project.

The National Records of Scotland has a wide and diverse community of stakeholders and plays a central role in the cultural, social and economic life of Scotland, supporting several of the Scottish Government’s key National Outcomes and measuring its Population Purpose Target.

Our National Collections, National Performing Companies, Creative Scotland, Historic Scotland and the National Records of Scotland all make a vital contribution to supporting recovery and increasing sustainable economic growth by attracting increasing numbers of visitors to Scotland through their activities for cultural, heritage and ancestral tourism.

There are over 340 museums and galleries in Scotland caring for more than 12 million objects. These attract an estimated 23.5 million visits every year, generating around £660 million for the economy. The wider heritage sector employs over 10,000 people including nearly 4,000 in museums.

OUR PRIORITIES

We are increasing our capital support for new and improved cultural and heritage infrastructure, in line with the Infrastructure Investment Plan, providing more opportunities for the construction sector and ensuring that Scotland can offer the best facilities and venues to the people of Scotland and visitors from abroad. We are continuing to support cultural opportunities and cultural excellence through investment in Creative Scotland, the National Performing Companies and the National Collections.

Building on the success of the 2012 Year of Creative Scotland we will continue to support the themed years through contributing to the Year of Natural Scotland in 2013 and supporting activity in the development, promotion and delivery of our next Year of Homecoming in 2014.

We will develop our plans to capitalise on the Commonwealth Games in 2014 to develop and create a cultural programme and a long-lasting, meaningful cultural legacy that: reinforces the contribution that a strong, vibrant cultural offer brings to the lives of people across Scotland; boosts tourism; and enhances Scotland’s international image.

We will maintain our strong relationships with institutions and Governments within Europe, with the UK Government and the wider international community which are paying dividends for Scotland, providing increased opportunities to expand trade and support economic growth. Key areas of activity include climate change and energy. Successful Ministerial visits to China, the Gulf, Japan, South Korea, Norway, Canada and the USA in the past 12 months have led to tangible outcomes, including a commitment to joint working with China; the promotion to the Gulf countries of £40 billion of low carbon investment opportunities (in Scotland); and £80 million planned investment in Scotland by Norway’s Marine Harvest.

Internationally, we will continue to promote Scotland as a responsible nation in the world, maximising its influence within the EU and building on mutually beneficial links with other countries including Canada, the USA, China and India.


In 2013-14 we will:

● increase capital investment in the culture sector with particular support for the Victoria and Albert (V&A) at Dundee project, and the redevelopment of the Royal Concert Hall and Theatre Royal in Glasgow for Royal Scottish National Orchestra and Scottish Opera respectively for the 2014 Commonwealth Games;

● proceed with significant investment in youth opportunities through the Young Scots Fund;

● increase investment in Scotland’s heritage with £1 million additional funding for historic properties, significant funding for the Bannockburn Visitor Centre, the National Conservation Centre and grant-aided projects with direct benefit for the heritage sector;

● work with ‘Team Scotland’ partners, in particular VisitScotland and EventScotland, to maximise the legacy of the 2012 Ryder Cup in Medinah, USA as well as the ‘Winning Years’ campaign to promote Scotland’s Year of Homecoming 2014 and the 2014 Ryder Cup at Gleneagles;

● promote Scotland’s creative industries and cultural excellence internationally by collaborating with Creative Scotland, Scotland’s National Performing Companies and Scotland’s National Collections on promotional and public diplomacy activity in our priority countries abroad; and

● maintain our International Development budget at highest ever levels (£9 million per year) despite a stringent financial climate. This funding is helping to make a real difference to some of the world’s poorest people.



Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Europe and External Affairs 15.9 15.7 15.5

Culture 149.2 148.2 147.3

Historic Scotland 45.3 43.6 35.7

Young Scots Fund 5.4 12.5 7.5

National Records of Scotland 22.0 20.8 19.5

Total Portfolio 237.8 240.8 225.5

of which:

DEL Resource 222.9 223.8 212.9

DEL Capital 14.9 17.0 12.6

AME – – –



Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Europe and External Affairs 15.9 15.3 14.8

Culture 149.2 144.6 140.2

Historic Scotland 45.3 42.5 34.0


National Records of Scotland 22.0 20.3 18.6

Total Portfolio 237.8 234.9 214.6

of which:

DEL Resource 222.9 218.3 202.6

DEL Capital 14.9 16.6 12.0

AME – – –

Europe and External Affairs


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Major Events and Themed Years 1.5 1.6 1.7

International Relations 14.4 14.1 13.8

Total Level 2 15.9 15.7 15.5

of which:



AME – – –


The Europe and External Affairs budget supports the promotion of Scotland, its interests and identity at home and abroad. It contributes to the promotion of Scotland as a responsible nation in the world, including our international development work, in maximising Scotland’s influence within the EU and building on mutually beneficial links with other countries including Canada, the USA, China and India. The budget also supports the attraction of fresh talent to live, study and work in Scotland and activity to stimulate growth in our events industry.


In 2013-14 we will:

● maintain the International Development Fund at £9 million, enabling us to provide support to development projects in Malawi, Zambia, Tanzania, Rwanda and South Asia, covering themes such as health, education, renewable energy and economic development;

● take forward the manifesto commitment to implement the USA, Canada and South Asia Country Plans as well as updating and implementing the China Plan;

● contribute to Year of Natural Scotland in 2013, a year in which Scotland’s people and its visitors will celebrate the country’s outstanding natural beauty, landscapes and biodiversity;

● work with ‘Team Scotland’ partners to support activity in the development, promotion and delivery of our next Year of Homecoming in 2014. and the 2014 Ryder Cup at Gleneagles to North American travellers and Scotland’s Diaspora;

● deliver the annual Scotland Week programme on budget and at half the cost of previous Tartan Weeks;

● work with ‘Team Scotland’ partners to deliver a year-round programme of promotional activity that promotes Scotland as a great place to live, learn, visit, work, do business and invest;

● contribute to the running costs of the British-Irish Council Standing Secretariat now successfully established in Edinburgh;

● establish a programme of activities in Edinburgh and Brussels promoting Scottish Government sectoral priorities and projecting Scotland as a dynamic contributor to EU policy making;

● support a programme of seminars to promote links with the Nordic countries; and

● maintain productive and proactive engagement with the UK Government and key EU stakeholders focused on delivering Scottish Government EU priorities.


Culture


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Creative Scotland and Other Arts 51.9 51.7 51.4

Cultural Collections 73.4 72.9 72.7

National Performing Companies 23.9 23.6 23.2

Total Level 2 149.2 148.2 147.3

of which:

DEL Resource 137.9 136.2 135.2

DEL Capital 11.3 12.0 12.1

AME – – –


The Culture budget contributes towards enhancing the quality of life for Scotland’s communities through maximising participation in high-quality cultural events and opportunities, supporting a wide range of Government commitments relating to culture. It is widely accepted that participating in creative activities such as making, or engaging with, music or art can lead to a broad range of positive personal and social outcomes.

Budget changes

£1m/£1m additional capital funding in 2013-14 and 2014-15 to Creative Scotland to enable improvement of the country’s cultural infrastructure and £2.4m/£3.9m additional capital for maintenance and refurbishment projects for the Cultural Collections.

In 2013-14 we will:

● continue our investment in cultural infrastructure, in particular our capital funding commitment to the V&A at Dundee project and the redevelopment of the Glasgow Royal Concert Hall and Theatre Royal in advance of the Commonwealth Games in 2014, as set out in the Infrastructure Investment Plan;

● continue to provide support for the National Museums, National Galleries and National Library of Scotland and the Royal Commission on the Ancient and Historic Monuments of Scotland (RCAHMS), continuing our commitment to the principle of free public access to the national collections;

● continue to provide over £20 million in revenue funding for the five National Performing Companies, supporting their artistic and educational work;

● provide Creative Scotland with over £34 million in core grant in aid to fund support for artists and cultural activity across all art-forms for the benefit of communities the length and breadth of Scotland, and an additional £1 million in capital to support improvement and development of cultural facilities across the country;


● implement the Museums Strategy maximising the potential of collections across Scotland, strengthening their connections with communities and developing the skills of the sector: provide direct funding support of almost £0.85 million for key industrial museums;

● maintain ring-fenced funding for the Youth Music Initiative (£10 million) to provide free music tuition for school children and for Arts and Business (£0.3 million) to help maximise private sector investment in the arts; and

● continue the successful Edinburgh Festivals Expo Fund, providing £2 million to support showcasing Scottish talent, maintain £0.25 million in direct support for Festivals Edinburgh, and continue the International Touring Fund (£0.35 million) for the National Performing Companies to perform beyond Scotland’s shores.

Historic Scotland


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Operational Costs* 72.8 70.7 67.7

Capital Expenditure 3.1 3.9 –

Less income -30.6 -31.0 -32.0

Total Level 2 45.3 43.6 35.7

of which:


DEL Capital 3.1 3.9 –

AME – – –

*Note: HS Operational Costs are now shown as one Level 3 figure.


Historic Scotland protects and promotes Scotland’s historic environment, through the conservation and maintenance of 345 nationally significant historic properties and monuments in the care of Scottish Ministers and, as the largest operator of paid visitor attractions in Scotland, through the employment of over 1,100 staff around Scotland who help to maintain its position as a world-class visitor destination. In its work with VisitScotland and VisitBritain, it is a key player in supporting tourism in Scotland.

It provides advice on the special interest and management of the most important parts of Scotland’s wider historic environment, including listed buildings, scheduled monuments, wreck sites, gardens and designed landscapes and battlefields, far beyond its 345 properties. It promotes cultural identity and associated community regeneration through designations, through educational programmes and through the Historic Environment Grants Programme. This Programme contributes funding for the repair


of Scotland’s most important historic buildings, the regeneration of historic areas and the enhancement of the quality of Scotland’s historic city centres.

Historic Scotland, as Scotland’s largest employer of stonemasons, also protects and supports traditional skills through its employment of skilled crafts people and its work with colleges, Sector Skills Councils and others, and through its Modern Apprentices contributes to our youth employment agenda.

Budget changes

Historic Scotland has received additional capital of £3.3 million in 2013-14 to invest in maintenance of its heritage assets and to allow an important grant repair project in the Western Isles at Lews Castle to proceed.

In 2013-14 we will:

● complete, in partnership with the National Trust for Scotland, the Battle of Bannockburn project ready for its opening in 2014;

● progress work on the National Conservation Centre enabling young people to learn traditional skills in a modern context, for completion in 2015;

● invest an additional £1 million in maintenance of historic properties throughout Scotland, providing local opportunities for the construction sector and helping the efficient carbon management of the historic estate and benefiting cultural tourism, economic regeneration and pro-active maintenance of the estate;

● invest in local regeneration throughout Scotland through grant schemes, refresh properties to improve visitor offering, and provide guidance on energy efficiency and on maintaining traditional buildings;

● continue to explore all means of growing income from current and alternative sources to support our functions;

● review processes and systems to identify further potential efficiencies, investing in the short term to deliver long-term savings; and

● continue to carry out a fundamental review of the Scottish Historic Environment Policy to ensure it supports delivery of the Scottish Government’s commitment to the historic environment and to sustainable economic growth.


Young Scots Fund


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m


Total Level 2 5.4 12.5 7.5

of which:



AME – – –


The Young Scots Fund is a new initiative that will invest over four years in emerging young talent in sport, enterprise and creativity. We believe that to invest in our young people is an investment in a better future for Scotland. In 2012-13 we funded a graduate incentive programme with the Scottish Chambers of Commerce that looks to increase graduate recruitment in Scotland’s small businesses; we are committed to invest in each of the three financial years to support up to 2,500 young people towards the labour market. The Young Scots Fund will be used to take forward a number of projects, including a National Indoor Football Centre, National Centre for Youth Arts and National Conservation Centre. It will also provide opportunities for developing, encouraging and building talent, for young Scots to excel and realise their potential as our future entrepreneurs, creative practitioners and sports champions.

In 2013-14 we will:

● commence investment, through Historic Scotland, in the National Conservation Centre based in Stirling, focusing on reviving scarce technical skills and promoting best practice in conservation;

● continue to invest to ensure that Scotland’s young people, aged between 16-24, have access to a range of interventions to move them towards and into work; and

● continue development of our plans for a National Football Academy.


National Records of Scotland


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Operational Costs* 29.0 27.2 26.5


Less retained income -7.5 -7.5 -7.5

Total Level 2 22.0 20.8 19.5

of which:



AME – – –

*Note: NRS Operational Costs are now shown as one level 3 figure.


The National Records of Scotland (NRS) plays an important role in cultural and economic life and its holdings are central to the nation’s sense of identity.

NRS has assumed all of the functions of the former General Register Office for Scotland and National Archives of Scotland. The functions of NRS are to:

● administer the registration of events such as births, deaths, marriages, civil partnerships, divorces and adoptions;

● maintain the statutes relating to the formalities of marriage and the conduct of civil marriage;

● take the Census of Scotland’s population every ten years and prepare and publish demographic and other statistics;

● make available to customers public records about individuals, and maintain for the Scottish Government the National Health Service Central Register (NHSCR);

● select public records worthy of permanent preservation; acquire other historical records of national importance, and make suitable arrangements for the disposal of other material;

● preserve to archival standards all records selected for permanent preservation in the NRS;

● increase sustainable public access to the records; and

● take the lead in the development of archival and records management practice in Scotland and provide advice to custodians of records outwith the NRS.


Budget changes

Additional capital funding of £0.6 million in 2013-14 to assist with essential maintenance and repairs.

In 2013-14 we will:

● work in cooperation with local authorities to provide a network of Local Family History Centres where family historians will be able to access the same records as are available at the ScotlandsPeople Centre;

● continue to expand the ScotlandsPeople service, in particular adding records (e.g. Valuation Rolls) in order to stimulate further ancestral research and potential tourism visits;

● finalise the creation of the single ICT solution for NRS and ensure that we continue to use technology effectively to support our business, increase efficiencies and deliver better services to our customers;

● conclude the publishing of results from Scotland’s 2011 Census, in parallel with censuses in the other parts of the UK;

● develop the data linkage service for Scotland (alongside other government departments) which will, over time, increase secure and acceptable data sharing; and

● continue to investigate models for delivery of census type information in 2021, and offer advice to Scottish Ministers in 2014.

CHAPTER 9 Infrastructure,

Investment and Cities


The Infrastructure, Investment and Cities portfolio makes a major contribution to the Scottish Government’s work on economic recovery and is responsible for transport policy and delivery, housing and regeneration, fuel poverty, veterans, digital infrastructure, European Structural Funds, Scottish Water, Scottish Government procurement, Scottish Futures Trust, cities strategy, parliamentary business and government strategy.

In line with the Government Economic Strategy the majority of the portfolio spend is focused on investment in transport and water infrastructure, providing good quality, sustainable and affordable housing, tackling homelessness and helping to regenerate our communities. Overall, the portfolio will look to support a renewed focus on cities and their regions, given the critical contribution they make as drivers of economic growth.


Improving Scotland’s physical infrastructure brings immediate benefits to our economy by supporting employment in the construction sector and its supply chains. While Westminster took the short-sighted decision to cut the Scottish Government’s capital budget, we have been determined to continue to invest in our infrastructure and aid our economic recovery. We are doing this with the additional use of revenue financed capital investment and innovative financing methods. The Scottish Government will continue to call on the UK Government to take steps to boost the economy while we work with all the powers we currently have to strengthen the Scottish economy. However, with our hands on the full set of economic levers we could do more to aid economic recovery and deliver economic growth.

Cities are vital to the success of the Scottish economy. The more successful our cities and their city regions are, the more successful Scotland will become. We will continue to invest directly in cities, taking account of their own priorities. We recognise the benefits that improved connectivity will deliver for Scotland and we are committed to dualling the roads between all our cities. We have accelerated our £3 billion plans for the A9 between Inverness and Perth, which will now start in 2015-16, making a strong start to completing the scheme by 2025. Our £842 million investment in the New South Glasgow Hospitals and the £246 million for the modernisation of Glasgow’s subway brings our investment into Scotland’s largest city to over £1 billion, helping boost the economy and support jobs.


An efficient transport system is essential for enhancing productivity and delivering faster, more sustainable growth in a low carbon economy. Ongoing investment in transport also connects regions and people to economic opportunity, whether through business, leisure travel or tourism, thus contributing to national social cohesion and reducing the disparity between the regions of Scotland. Our investment in Scotland’s transport infrastructure therefore plays a key role in creating the best possible conditions for business success. In 2011-12, 95 per cent of Transport Scotland’s £1.8 billion budget was invested back into the private sector, supporting over 25 per cent of civil engineering contracts in Scotland and more than 12,000 jobs.

Improving our digital connectivity is one of the key aims of our digital strategy. We want to ensure that all of Scotland’s citizens are equipped to take advantage of the digital revolution. Improving connectivity will support future innovation in the digital economy and ensure Scotland’s business base can remain competitive in the global digital environment. It will also play a critical role in driving economic growth and competitiveness, creating more and better jobs. It will support the transition to a low carbon economy, opening up new opportunities for a different way of living and working that encourages strong and growing rural towns and villages.

Housing is a key part of our physical, economic and social fabric. Our strategy shows how getting housing ‘right’ can create good quality homes across Scotland while contributing to sustainable economic growth. We estimate that the £750 million housing investment budget for the three-year period 2012-13 to 2014-15 could generate around £3 billion of economic activity and support up to 8,000 jobs each year, directly and indirectly, across the Scottish economy.

Our draft sustainable housing strategy sets out a significant programme of enhancement of the energy efficiency of the existing housing stock, including renewable energy. This is required to meet our climate change targets and to assist in tackling fuel poverty. It will also bring significant benefits to local economies across Scotland. A National Retrofit Programme will be launched in 2013-14 bringing together Scottish Government funding and support from the new Energy Company Obligation as well as the market led Green Deal, creating expenditure of around £200 million a year.

We also want to ensure our most disadvantaged communities in Scotland are supported. Our regeneration strategy sets out a vision where all places are sustainable and promote wellbeing. We are clear on the need for regeneration to be holistic, supporting economically, physically, and socially sustainable communities. The Scottish Government will also undertake a review of town centres with key stakeholders this year to ensure they are fit for the 21st century.

We believe that our commitments to economic growth, to reducing child poverty, and to reducing the gap between rich and poor will be undermined by the UK Government’s welfare reforms. Faced with the consequences of these reforms, our challenge is to be as creative and as innovative as we can within our legislative competence and our available resources to mitigate the worst effects of the UK’s welfare reforms and protect the most vulnerable in our society. However, we believe that transferring responsibility for welfare to the Scottish Parliament is vital to ensure that we have a welfare system for the long term that reflects our values of enterprise, community and solidarity.

INFRASTRUCTURE, INVESTMENT AND CITIES | 113

European Structural Funds play a significant role in meeting Europe 2020 and Scottish Government objectives of achieving our full economic potential by supporting infrastructure investment, improving digital connectivity, supporting the transition to a low carbon economy, raising skill levels and supporting individuals into employment. The programmes follow the seven-year cycle set by the EU budget, and run until the end of 2013 with some activity continuing through until 2015. In this current programme the Scottish Government front loaded expenditure to support economic recovery and growth, and by the end of this programme we aim to have secured training and improved skills for 390,000 individuals and to have delivered approximately 45,000 new jobs for Scotland. We will also have invested over £13.5 million in upgrades to harbour infrastructure in preparation for a larger and stronger renewables industry in Scotland.

Modern, efficient and affordable services are key to driving economic growth, ensuring competitiveness and ensuring that Scotland’s environment is protected for future generations. Scottish Water has delivered significant improvements to services over the last ten years. With an annual turnover of over £1.1 billion, it is one of Scotland’s twenty largest businesses. It employs some 3,500 staff and sustains a further 20 per cent of the Scottish civil construction industry. After four years of charges being frozen in Scotland, services are comparable to those received by households in England and Wales. Furthermore, average housesehold charges are now £52 lower than the average in England and Wales. We are committed to ensuring that services continue to improve and that Scottish Water delivers its vision to be Scotland’s most valued and trusted business.

In addition, the Water Resources (Scotland) Bill, that is currently being considered by the Scottish Parliament, seeks to build Scotland’s reputation as a ‘Hydro Nation’. Scotland has abundant water resources and a dynamic water sector. We can capitalise on global economic opportunities and support the good stewardship of water resources in an increasingly water stressed world.

With an annual spend of around £9 billion each year, public sector procurement in Scotland can help support sustainable economic growth, aid economic recovery and contribute to many of the Scottish Government’s strategic priorities. For example, thinking creatively about how we develop procurement strategies and set up specific contracts can help ensure a level playing field for small and medium sized enterprises (SMEs). We will introduce a Procurement Reform Bill that will establish a national legislative framework for sustainable public procurement that supports Scotland’s economic growth by delivering community benefits, supporting innovation, considering environmental requirements and promoting public procurement processes and systems which are transparent, streamlined, standardised, proportionate, fair and business-friendly.

Through the Scottish Futures Trust (SFT), the Scottish Government aims to achieve better value for money from public infrastructure investment in Scotland. The importance of this work has grown, given the speed and scale of planned reductions in capital DEL budgets. Overall SFT has delivered £131 million of net future benefits and savings during 2011-12. Added to the two previous years, SFT has now delivered a total of £371 million of savings and benefits to the people of Scotland.


BUDGET CHANGES

The key changes have been the consequence of capital acceleration and the allocation of capital consequentials, which the Government has used to stimulate the economy through investment in affordable homes and transport infrastructure. Adjustments have also been made to the budgets for European Structural Funds.

Funding for Welfare Reform has transferred to the Infrastructure Investment and Cities portfolio to reflect the new Ministerial responsibilities announced on 5 September 2012.

OUR PRIORITIES

In 2013-14, the Scottish Government will continue to focus expenditure on activity that will aid economic recovery and stimulate economic growth. We will continue to drive out efficiencies from existing activity and look for innovative ways to deliver as much as possible for the public pound. We will continue our significant investment in the road network, spending £690.4 million on motorways and trunk roads in 2013-14, including £259 million on the construction of the Forth Replacement Crossing.

We will also contribute funding for the Fastlink core scheme in Glasgow, in support of the Commonwealth Games and opening of the New South Glasgow Hospitals. We have pledged to support the Caledonian Sleeper services and will continue with our ambitious investment in the rail network, including the construction of the Borders railway and the development of the Edinburgh to Glasgow line. In total we will spend £837.4 million on the development of rail services in 2013-14.

In recognising the importance of having a cohesive economy and good transport links to the whole of Scotland, the Scottish Government has not altered its plans for expenditure on air and ferry services. It has also protected expenditure on concessionary fares and bus services recognising the importance of these services to particular groups in our society.

In 2013-14, we will spend £173 million on delivering homes and community-led regeneration across Scotland. Together with over £70 million within the local government settlement, this will deliver over 6,000 more homes through the Affordable Housing Supply Programme, provide a boost to the construction sector and aid in our economic recovery. We will use the £50 million Scottish (JESSICA) Spruce Fund to target sustainable investment in disadvantaged areas, which will enable gains to be recycled into further projects in the future. We will also provide funding for the successful applicants to the £10 million Greener Homes Innovation Scheme aimed at encouraging the provision of sustainable, greener homes.

We will also continue to develop Scotland’s water and digital infrastructure in accordance with our investment plans and strategies and use European Structural Funds to support projects that will improve Scotland’s competitiveness.




Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Air Services 34.5 39.9 41.0

Concessionary Fares and Bus Services 248.6 248.6 248.6

Ferry Services 107.1 109.2 114.9

Motorways and Trunk Roads 655.4 690.4 691.1

Other Transport Policy, Projects and Agency Administration 57.7 76.3 59.9

Rail Services 780.9 837.4 846.3

Scottish Futures Fund 6.5 15.5 37.5

Housing and Regeneration 300.8 303.9 282.4

Digital Economy and Infrastructure 10.6 4.0 1.0

European Regional Development Fund — 2007-13 Programmes - - -

European Social Fund — 2007-13 Programmes - - -

Scottish Water 12.7 -24.3 95.5

Other Expenditure 10.2 14.0 -11.1

Parliamentary Business and Government Strategy 6.5 9.8 6.0

Total Portfolio 2,231.5 2,324.7 2,413.1

of which:

DEL Resource 1,174.5 1,238.8 1,315.3

DEL Capital 1,057.0 1,085.9 1,097.8

AME - - -

Central Government Grants to Local Authorities 129.0 114.3 162.2


Table 9.02: Detailed spending plans (Level 2 real terms at 2012-13 prices)

Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Air Services 34.5 38.9 39.0

Concessionary Fares and Bus Services 248.6 242.5 236.6

Ferry Services 107.1 106.5 109.4

Motorways and Trunk Roads 655.4 673.6 657.8

Other Transport Policy, Projects and Agency Administration 57.7 74.4 57.0

Rail Services 780.9 817.0 805.5

Scottish Futures Fund 6.5 15.1 35.7

Housing and Regeneration 300.8 296.5 268.8


European Regional Development Fund — 2007-13 Programmes – – –

European Social Fund — 2007-13 Programmes – – –

Scottish Water 12.7 -23.7 90.9

Other Expenditure 10.2 13.7 -10.6

Parliamentary Business and Government Strategy 6.5 9.6 5.7

Total Portfolio 2,231.5 2,268.0 2,296.8

of which:

DEL Resource 1,174.5 1,208.6 1,251.9

DEL Capital 1,057.0 1,059.4 1,044.9

AME - - -

Central Government Grants to Local Authorities 129.0 108.8 154.8

Air Services:


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Highlands and Islands Airports Limited 22.9 32.4 33.4

Support for Air Services 11.6 7.5 7.6

Total Level 2 34.5 39.9 41.0

of which:



AME - - -



The budget supports Highlands and Islands Airports Limited (HIAL), which operates 11 airports at Barra, Benbecula, Campbeltown, Dundee, Inverness, Islay, Kirkwall, Stornoway, Sumburgh, Tiree and Wick. The budget includes resources for capital investment required by the regulatory authorities. It sustains the operation and development of airport services throughout the Highlands and Islands, supporting the economic and social development of remote and island communities. The budget also supports the Air Discount Scheme (ADS) which provides discounted fares on eligible routes to people whose main residence is in Orkney, Shetland, the Western Isles, Islay, Colonsay and Jura, Caithness and north-west Sutherland. In addition, the budget supports lifeline Public Service Obligation (PSO) air services between Glasgow and Barra, Campbeltown and Tiree, which cannot be provided commercially.

Through continuing to invest in these air services we will help to ensure 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.

Budget changes

Since the publication of the Spending Review, additional funding following reclassification of Highland & Islands Airports Ltd to an NDPB has resulted in budget cover required for depreciation costs for 2013-14 and 2014-15.

In 2013-14 we will:

● ensure that HIAL has the necessary resources to maintain its 11 airports at current levels of operational ability;

● continue to fund the lifeline PSO air services to Barra, Campbeltown and Tiree; and

● continue to fund the Air Discount Scheme.

Concessionary Fares and Bus Services:


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Smartcard Programme 2.8 2.8 2.8

Concessionary Fares 192.0 192.0 192.0

Support for Bus Services 53.8 53.8 53.8

Total Level 2 248.6 248.6 248.6

of which:

DEL Resource 246.6 246.6 246.6


AME - - -



The budget provides support for the development and delivery of concessionary travel schemes for older, disabled and young people. The funding provides for bus infrastructure systems to recognise Smartcards, which is essential to effective implementation of our anti fraud strategy. Access to national concessionary travel is through Smartcards issued as part of the Scottish Citizens’ National Entitlement Card project.

Bus Service Operators’ Grant (BSOG) provides support to the bus industry across Scotland helping operators to keep their fares down and enabling them to run services that might not otherwise be commercially viable. It helps sustain the economy and to reduce the cost to local authorities of supporting non-commercial socially necessary services. Changes to BSOG, effective from April 2012, have encouraged fuel efficiency which supports bus routes and the bus network as a whole.

Budget changes

There have been no changes to the 2013-14 budget since the Spending Review publication.

In 2013-14 we will:

● continue to deliver the concessionary travel schemes to provide free or discounted trips on public transport to the people that need it most, connecting Scotland’s people and communities; and

● continue to make efficiency savings in the operation of the schemes and the validation of bus operator claims.

Ferry Services


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Support for Ferry Services 97.4 97.5 103.9

Vessels and Piers 5.2 5.7 5.5

Road Equivalent Tariff 4.5 6.0 5.5

Total Level 2 107.1 109.2 114.9

of which:

DEL Resource 101.9 103.5 109.4


AME - - -



The Support for Ferry Services budget covers the subsidy paid for the:

● Clyde and Hebrides Ferry Services (CHFS) contract;

● Northern Isles Ferry Services contract;

● Northern Isles Lift-On Lift-Off Freight Services contract; and

● Gourock-Dunoon Ferry Service contract.

The Vessels and Piers budget 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.

The budget for Road Equivalent Tariff (RET) funds this approach to ferry fare setting on the services to the Western Isles, Coll and Tiree.

Budget changes

Since the publication of the Spending Review, additional funding of £0.2 million in 2013-14 and 2014-15 has been allocated to Kennacraig port.

In addition, the funding for RET has been increased by £1.5 million in 2013-14 and £1.0 million in 2014-15 to meet commitments to transitional measures following the withdrawal of RET from commercial vehicles. The funding has been secured through efficiencies in the ferry services, whose budgets have been reduced accordingly.

In 2013-14 we will:

● maintain ferry services on the Clyde and Hebrides, Gourock – Dunoon and Northern Isles routes;

● bring into service two innovative new low carbon small hybrid vessels and complete harbour works at Ullapool;

● maintain the RET fares for the routes to the Western Isles, Coll, Tiree, Islay, Gigha and Colonsay and prepare for the next roll out in October 2014; and

● commence implementation of the government’s Ferries Plan.

This investment will help Scotland realise its full economic potential with more and better employment opportunities for its people.


Motorways and Trunk Roads


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Structural Repairs 30.0 30.0 30.0

Network Strengthening 27.0 30.0 31.0

Private Finance Initiative (PFI) Payments 74.5 76.8 84.7

Routine and Winter Maintenance 68.5 70.5 72.5

Other Current Expenditure 4.8 4.8 4.8

Roads Improvement 19.2 14.2 14.2

Capital Land and Works 42.4 104.9 46.1

Forth Replacement Crossing 282.0 259.0 307.0

Roads Depreciation 89.0 89.0 89.0

Forth and Tay Road Bridge Authorities 18.0 11.2 11.8

Total Level 2 655.4 690.4 691.1

of which:

DEL Resource 268.3 247.9 257.8

DEL Capital 387.1 442.5 433.3

AME - - -


Investment in the road infrastructure is vital to ensuring that Scotland is an attractive place for doing business in Europe. In addition to major roads construction projects and other road improvements, the budget delivers road and bridge strengthening as well as 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.

The budget also covers the construction of the Forth Replacement Crossing (FRC).

Budget changes

Since the publication of the Spending Review, additional funding of £48.2 million (2013-14) and £42.9 million (2014-15) has been allocated for Capital Land and Works, funded from Barnett consequentials and other additional capital. In addition, since the publication of the spending review the Scottish Government has agreed with HM Treasury an arrangement whereby future years’ Capital DEL could be deployed against early years of the FRC project. Compared to the previously published figures this has had the effect of a £50 million increase in 2012-13 followed by decreases of £22 million and £52 million in 2013-14 and 2014-15. The impact of this arrangement is cash neutral over the life of the project.


In 2013-14 we will:

● continue construction of the Forth Replacement Crossing as programmed;

● complete the procurement of the M8 Baillieston to Newhouse motorway upgrade, together with improvements to the M74 Raith Interchange and the M8 associated improvements and commence construction;

● continue to progress the Aberdeen Western Peripheral Route (AWPR) and Balmedie projects and bring forward to procurement as soon as the legal issues surrounding the project are resolved;

● complete construction of the A82 Pulpit Rock, A75 Hardgrove to Kinmount, and A77 Symington to Bogend Toll trunk road improvements;

● continue construction on the A75 Dunragit Bypass and A82 Crianlarich Bypass;

● progress design work on the A96 Inveramsay Bridge, A737 Dalry Bypass, and A77 Maybole Bypass along with development work on the A82 Loch Lomond and A90 Haudagain Roundabout;

● progress design and development work on dualling the A9;

● focus on essential improvements and on safety and congestion relief improvements that offer value for money;

● utilise lower cost repairs alongside safety critical work until funding allows renewal of life expired roads and strengthening of bridges to take place;

● maximise value in the routine and winter maintenance budgets by identifying savings in the work delivered by the Trunk Road Operating Companies;

● complete the transfer of the Traffic Scotland Control Centre to new purpose built facilities in South Queensferry; and

● continue to maintain the safe operation of the Forth and Tay Road Bridges.


Other Transport Policy, Projects and Agency Administration


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Transport Information 1.2 1.2 1.2

Agency Administration Costs 17.7 17.3 16.9

Strategic Transport Projects Review 3.6 3.6 3.6

Support for Freight Industry 1.1 1.1 1.1

Scottish Canals 10.0 10.0 10.0

Support for Sustainable and Active Travel 16.0 35.0 19.0

Travel Strategy and Innovation 5.1 5.1 5.1

Road Safety 3.0 3.0 3.0

Total Level 2 57.7 76.3 59.9

of which:


DEL Capital 14.0 32.3 15.7

AME - - -


The Transport Information budget funds the provision of impartial travel information services such as Traveline and Transport Direct.

The Agency Administration budget funds the running costs of Transport Scotland.

The Strategic Transport Projects Review (STPR) budget is designed to ensure the robustness of the appraisal and analysis tools that enable decisions to be made on individual projects, as well as supporting the wider business case development and appraisal.

The Support for the Freight Industry budget focuses on measures which encourage the freight industry to reduce emissions by transferring freight from road to rail and water, where practicable.

The grant to Scottish Canals supports the maintenance of Scotland’s canals and their contribution to economic regeneration.

The budget for Sustainable and Active Travel delivers support for the promotion of more sustainable travel choices, including support for the actions in the Cycling Action Plan for Scotland as well as fuel efficient driving and the development of a network of car clubs across Scotland. It includes funding for the core Fastlink scheme in Glasgow and the increased use of hybrid buses.


The budget for Transport Strategy and Innovation provides running cost support for Regional Transport Partnerships, the Mobility and Access Committee for Scotland (MACS) and Passengers’ View Scotland (PVS).

The Road Safety budget covers Road Safety Scotland’s delivery of road safety research, education and publicity, as laid out in their annual business plan, and support for partnership working under the Road Safety Framework to 2020. Scotland currently has some of the safest roads in Europe and we will continue to strive to make the roads safer.

Budget changes

Since the publication of the Spending Review, additional funding of £10.0 million (2013-14) and £4 million (2014-15) has been allocated for Support for Sustainable and Active Travel, aimed at cycling initiatives and hybrid buses.

In 2013-14 we will:

● continue to invest in infrastructure to encourage cycling and walking, working in partnership with local authorities across the country;

● continue to invest in hybrid buses to reduce the impact on our environment;

● continue development of a route strategy for the dualling of the A96;

● continue development of the schemes comprising the Forth Replacement Crossing Public Transport Strategy;

● operate the Mode Shift Revenue Support and Waterborne Freight Grant schemes and promote best practice in the freight industry;

● continue to contribute to economic regeneration through Scottish Canals involvement in the Helix project; and

● continue to support road safety initiatives to deliver the Road Safety Framework.


Rail Services


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Rail Franchise 447.4 511.5 530.9

Rail Infrastructure 290.7 278.0 277.7

Rail Development 3.0 3.5 9.0

Major Public Transport Projects 39.8 44.4 28.7

Total Level 2 780.9 837.4 846.3

of which:

DEL Resource 450.4 515.0 539.9

DEL Capital 330.5 322.4 306.4

AME - - -


The budget supports the delivery of ScotRail passenger rail services in Scotland and the Caledonian sleeper services, the maintenance and safe operation of the Scottish rail infrastructure and investment in network enhancements. The rail infrastructure and track access charge elements of rail services costs paid to Network Rail are determined by the Office of Rail Regulation (ORR).

Funding is provided under Major Public Transport Projects for the delivery of major rail public transport projects such as the Edinburgh Glasgow Improvement Programme (EGIP), the Borders Railway and the City of Edinburgh tram project and improvements to the sleeper services.

Budget changes

The UK Government’s Autumn Budget Statement in November 2011 made £50 million available in 2011-12 to improve the Caledonian Sleeper service, subject to match funding from the Scottish Government. As it was not possible to procure or refurbish rolling stock in the short period of time that remained in 2011-12, with the agreement of HM Treasury, these funds were allocated to Scottish Water. These funds will be returned to the Scottish Government for use on the sleeper service in the following profile: £5m/£10m/£25m/£10m in the years 2013-14 to 2016-17.

Since the publication of the Spending Review, the budget for rail infrastructure has been reduced in 2013-14 by £5.2 million.

In 2013-14 we will:

● increase expenditure to improve rail passenger services and operate, maintain and enhance the rail network;

● continue construction of the Borders Railway to open in 2014;

● continue design, development and delivery of EGIP;


● let the next contracts for the provision of ScotRail passenger and Caledonian Sleeper services; and

● continue to meet the Scottish Government’s funding obligation to make a £500 million contribution to the City of Edinburgh Council’s tram project.

Scottish Futures Fund


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Warm Homes and Future Transport Funds 6.5 15.5 37.5

Total Level 2 6.5 15.5 37.5

of which:


DEL Capital - - -

AME - - -


The Future Transport Fund will reduce the impact of transport on our environment, reducing congestion and supporting better public transport, active travel and low carbon vehicles. This investment provides a platform for increasing support thereafter for a range of sustainable transport initiatives, including cycling infrastructure and freight modal shift.

The Warm Homes Fund will help to address fuel poverty in the most vulnerable communities. The Fund will support take up of renewable energy and energy efficiency measures to reduce energy costs and provide the opportunity to generate energy and income to support local community projects.

Budget changes

There have been no changes to the 2013-14 budget since the Spending Review publication.

In 2013-14 we will:

● continue to progress initiatives to advance adoption of electric and other low carbon vehicles;

● continue to promote active travel choices, through support for cycling and walking initiatives;

● continue to support freight modal shift; and

● invest £7.75 million in the Warm Homes Fund.


Housing and Regeneration


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Supporting Economic Growth/Housing Supply 155.3 172.8 170.1

Supporting Sustainability 118.3 114.0 95.0

Supporting Transitions 32.2 22.1 22.3

Less Income -5.0 -5.0 -5.0

Total Level 2 300.8 303.9 282.4

of which:

DEL Resource 101.2 97.9 118.5

DEL Capital 199.6 206.0 163.9

AME - - -


The budget enables us to meet the commitments for housing and regeneration capital investment and continue to support the economy and protect the supply of new homes. This can be achieved with partners by using less taxpayer investment for each new home and leveraging more funding from other sources. In particular it supports our manifesto commitment to deliver at least 30,000 affordable homes over the lifetime of this Parliament, including 20,000 social homes of which at least 5,000 will be council homes.

In addition there is further funding for housing supply within the local government capital settlement.

Budget changes

Since the publication of the Spending Review, the budget for housing and regeneration has increased by £38.9 million due to the allocation of Barnett consequentials and acceleration of existing resources from future years into 2012-13 to support economic growth.

In 2013-14 we will:

● use the £50 million Scottish (JESSICA) Spruce Fund to target sustainable investment within the 13 eligible local authority areas (to enable gains to be recycled into further projects in the future);

● create a National Retrofit Programme to support energy efficiency and carbon reduction measures in existing housing that contribute to the Scottish Government target to eradicate fuel poverty by 2016 as far as practicable and the targets within the Climate Change Act 2009;


● complete the approvals of the social and affordable housing projects for 30 local authorities from their three year resource planning assumptions; Glasgow and Edinburgh City Councils will also approve three year affordable housing programmes from the resources within the local government TMDF budget;

● deliver over 6,000 affordable homes, of which 4,000 will be social homes;

● continue to support first-time buyers through our shared equity programmes and existing home owners through the mortgage rescue schemes;

● continue to support the construction industry through funding of the House Building Infrastructure Loan Fund and our work with Homes for Scotland and the Council for Mortgage Lenders on the mortgage indemnity scheme for new build housing in Scotland; and

● provide funding for the successful applicants to the £10 million Greener Homes Innovation Scheme aimed at encouraging the provision of sustainable, greener homes.

Digital Economy and Infrastructure


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m


Total Level 2 10.6 4.0 1.0

of which:


DEL Capital 9.6 3.0 –

AME - - -


The capital budget for the Digital Economy and Infrastructure line funds Pathfinder, a public sector procurement project for broadband services for the public sector (excluding health) in the Highlands & Islands and South of Scotland. Local Authority partners manage the delivery of the project on our behalf. This is a £90 million project that the Scottish Government committed to in 2004 and our expenditure commitments are expected to run until mid 2013.

The resource budget supports growth in the digital economy, including programmes to support SMEs to develop their digital skills as well as contributing towards a centre of digital expertise within the Scottish Government that drives the delivery of digital programmes.


In addition to the capital funding outlined above the £78 million Next Generation Digital Fund within the Rural Affairs and Environment portfolio and £40 million within the Local Government portfolio form part of the national fund available to deliver the Step Change 2015 Programme. As well as this, funding from Broadband Delivery UK (BDUK) and the European Regional Development Fund make up the national fund of over £240 million to support the delivery of next generation broadband infrastructure in Scotland.

This funding is in addition to the funding secured by Edinburgh from the first round of the Urban Broadband Fund and we continue to support the Scottish Cities Alliance and individual cities in order to secure additional support from the second phase of the process.

Budget changes

Since the publication of the Spending Review, the budget for digital infrastructure has increased due to the allocation of Barnett consequentials. This is reflected in the increase in the Next Generation Digital Fund within the RAE portfolio. The reduction in the Digital Economy and Infrastructure budget is the consequence of expenditure on Pathfinder coming to an end.

European Regional Development Fund — 2007-13 Programmes


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Grants to Local Authorities 9.0 14.9 36.3

Central Government Spend 78.5 44.0 87.2

Grants to Local Authorities — EC Income -9.0 -14.9 -36.3

Central Government Spend — EC Income -78.5 -44.0 -87.2


of which:

DEL Resource - - -

DEL Capital - - -

AME - - -

These figures net to zero because of matching receipts from the European Union


European Social Fund — 2007-13 Programmes


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Grants to Local Authorities 16.0 16.6 31.2

Central Government Spend 26.0 28.2 35.9

Grants to Local Authorities - EC Income -16.0 -16.6 -31.2

Central Government Spend - EC Income -26.0 -28.2 -35.9


of which:

DEL Resource - - -

DEL Capital - - -

AME - - -

These figures net to zero because of matching receipts from the European Union


We have responsibility for implementing the 2007-13 European Structural Funds programmes in Scotland, principally through the European Regional Development Fund and the European Social Fund, as well as other cross-border and transitional programmes.

European Structural Funds contribute to the improvement in Scotland’s economic competitiveness through support for business research and innovation, infrastructure, skills improvement and the promotion of lifelong learning across a wide range of sectors, underpinning a number of our Strategic Priorities in delivery of the Scottish Government’s Purpose.

Budget changes

The revised figures reflect changing profiles of expenditure in approved projects.


Scottish Water


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Interest On Voted Loans -87.3 -90.3 -94.5

Voted Loans 100.0 66.0 190.0

Total Level 2 12.7 -24.3 95.5

of which:

DEL Resource -87.3 -90.3 -94.5

DEL Capital 100.0 66.0 190.0

AME - - -


In 2012-13 to 2014-15 Scottish Water will continue to deliver the improvements required by Ministers. This will be financed through customer charges and new loans from the Scottish Government as set out above. The budget also recognises the receipt of interest to the resource budget from the loans issued to Scottish Water.

Budget changes

The UK Government’s Autumn Budget Statement in November 2011 made £50 million available in 2011-12 to improve the Caledonian Sleeper service, subject to match funding from the Scottish Government. As it was not possible to procure new rolling stock in the short period of time that remained in 2011-12, with the agreement of HM Treasury, these funds were allocated to Scottish Water. These funds will be returned to the Scottish Government for use on the sleeper service in the following profile: £5m/£10m/£25m/£10m in the years 2013-14 to 2016-17.

We have also examined the expected level of further savings and efficiencies by Scottish Water over the remainder of the regulatory period. Based on that, we have agreed with Scottish Water that the lending to them can be reduced by £45 million in 2013-14. Scottish Water have also confirmed that they will be in a position to repay the loan made to them in 2008 to support the creation of Business Stream over 2013-14 and 2014-15.

As a Hydro Nation we can capitalise on global economic opportunities and support the good stewardship of water resources in an increasingly water stressed world. We intend to make resources available from within the Scottish Water budget to promote this agenda. The current estimated profile of expenditure is £1 million in 2012-13, £4 million in 2013-14 and £4 million in 2014-15.


Other Expenditure


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Housing Regulator 4.0 3.8 3.7

ESF Programme Operation 1.5 1.5 1.5

Scottish Futures Trust 4.7 4.7 4.7

Asset Management – 1.0 -24.0

Welfare: Miscellaneous (1) – 3.0 3.0

Total Level 2 10.2 14.0 -11.1

of which:


DEL Capital – 1.0 -24.0

AME

Note (1): discussions relating to the transfer of funding for crisis loans for living expenses and community care grants continue with the UK Government (and are not reflected in these figures). Scottish Ministers will take decisions about the future funding of its successor arrangements for these aspects of the current social fund when the negotiations have concluded.


The Scottish Housing Regulator, the independent body established by the Housing (Scotland) Act 2010, has the statutory objective of safeguarding and promoting the interests of the 600,000 households in social rented housing. The budget will allow the Regulator to continue to drive up the quality of services delivered to tenants, homeless people and other service users.

European funds are used to support economic recovery and future growth. The ESF Programme Operation budget provides the resources necessary to run these programmes of support.

In 2013-14, the Scottish Futures Trust will continue to work to enhance value for money for infrastructure investment across the public sector in Scotland. It will, in particular, progress delivery of the pipeline of investment through the Non-Profit Distributing model, working in partnership with others in transport, education and health; support innovative new ways of working, including through collaborative procurement through the hub initiative; support the National Housing Trust to create affordable housing; and use Tax Incremental Financing pilots to lever in additional investment for regeneration.

Working in partnership with the third sector, Scottish local authorities and others, the funding for welfare will be used to: respond to the UK Government’s welfare reforms by supporting people and organisations make the transition to the new benefits system; and assess the longer term and cumulative impact of those reforms on our people and communities.


Budget changes

Since the spending review, an Asset Management Fund of £1 million per annum has been established, funded through Barnett consequentials and to be administered by the Scottish Futures Trust.

Parliamentary Business and Government Strategy


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Strategic Communications 3.1 2.9 2.7

Crown Office and Procurator Fiscal Service Inspectorate 0.3 0.3 0.3

Royal and Ceremonial 0.3 0.3 0.3

Office of the Chief Statistician 1.5 1.5 1.4

Strategic Research and Analysis Fund 0.9 0.9 0.9

Scotland Act Implementation – 3.5 –

Office of the Chief Economic Adviser 0.4 0.4 0.4


of which:


DEL Capital - - -

AME - - -


The Parliamentary Business and Government Strategy budget;

● allows Scottish Ministers to communicate with various audiences;

● supports procurement of data and specific technical assistance to strengthen understanding of key developments in the economy and public finances;

● funds developments in statistics at a local level and is used to respond to emerging data requirements relating to the National Performance Framework and Single Outcome Agreements;

● supports the independent inspection of the Crown Office and Procurator Fiscal Service (COPFS), through support of the office and production of thematic reports;

● funds implementation of the financial provisions in the Scotland Act 2012; and

● covers Royal and Ceremonial events and tasks within Scotland.



● support public engagement activities to encourage the public to make changes to help create a greener, healthier Scotland;

● offer advice and support materials to parents of children 0-3 to empower early years development;

● continue to support vaccination for Seasonal Flu and recruit members of the public to register as Organ Donors;

● promote greater understanding of the symptoms of breast and colorectal cancer to empower earlier presentation;

● procure data and technical expertise to help inform and advise on developments in the Scottish economy, including new powers from the Scotland Bill;

● provide additional funding to bodies responsible for implementing new responsibilities particularly relating to taxation, set out in the Scotland Act; and

● continue to cover relevant Royal and Ceremonial expenditure such as Lord Lieutenant expenses, expenses incurred by the Pursebearer to the Lord High Commissioner of the General Assembly of the Church of Scotland and specific Royal and Ceremonial projects.


Table 9.17 More detailed spending plans (Level 3)

Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Regional Transport Partnership 16.7 15.3 22.5

Cycling, Walking and Safer Routes 6.1 5.6 8.2

Housing Support Grant and Hostels Grant 9.0 8.0 8.0

National Housing Trust Provision (AME) 4.0 4.0 4.0

Vacant Derelict Land grant 8.1 7.5 11.0

Transfer of Management of Development Funding 79.5 73.0 107.3

Assistance to owners — Glasgow Stock Transfer 5.6 0.9 1.2

Total Level 2 129.0 114.3 162.2

of which:

DEL Resource

DEL Capital 116.0 110.3 158.2

AME 13.0 4.0 4.0

CHAPTER 10 Administration


The Administration budget covers the costs of running the core administration required to support the Scottish Government’s Purpose and Strategic Objectives. These costs comprise primarily staffing, but also accommodation, information technology, travel and training. The budget contributes to the achievement of all the Strategic Objectives across each of the Ministerial portfolios and to the delivery of our 16 National Outcomes.


Our Government Economic Strategy sets out the framework for delivering the Purpose, and identifies our priorities for accelerating recovery, driving sustainable growth, boosting employment and tackling inequality. We are taking forward a range of activities to deliver these priorities, and in particular developing and implementing policies and programmes across government portfolios within the principles of the Government Economic Strategy.

BUDGET CHANGES

Our spending plans include the following changes made since the publication of Draft Budget 2012-13 which showed total budget plans of £202.6 million for 2013-14 and £193.5 million for 2014-15. These changes in total result in a net increase to plans of £4.3 million, giving the revised budget figures of £206.9 million and £197.8 million in Table 10.01 below.

Transfer from Rural Affairs and Environment

Increase of £4.5m/£4.5m for the provision of facilities and estates services to Marine Scotland. This is an annual transfer previously given effect through an in-year budget revision and does not reflect an increase in expenditure.

Transfers to Portfolio programme budgets

Net decrease of £0.2m/£0.m due to the transfer of resources (£0.4 million) from the Justice programme for the provision of HR services to Mental Health Tribunal and transfers (£0.5 million) to various portfolio programme budgets to reclassify functions directly involved in service delivery as programme rather than administration spending.

ADMINISTRATION | 135

OUR PRIORITIES

In 2013-14 we will continue to make progress in reducing the costs of the Scottish Government while maintaining a high quality service to Scottish Ministers and the people of Scotland. Over the period from 2010-11 to 2014-15 we will reduce the Scottish Government’s Administration budget by £69 million or around 25 per cent. In doing so, our intention is to help mitigate the impact of the UK Spending Review settlement on frontline public services and demonstrate leadership at a time when all public sector bodies are being asked to operate within an increasingly tight financial settlement. This has required us to work with staff and in partnership with trade unions to manage the business of the organisation at a time when we have reduced the number of staff working for it by 1,050 since 2010-11.

Within this financial framework, our priorities for 2013-14 include:

● ensuring that the organisation is equipped to deliver the outcomes and objectives set for it by Ministers and the people of Scotland, as set out in the Programme for Government, the Government Economic Strategy and the National Performance Framework;

● continuing to focus on better alignment, collaboration and partnerships across the public sector in order to maximise the outcomes that are delivered for the people of Scotland;

● ensuring that the Civil Service in Scotland continues to support open, transparent government, working effectively with delivery partners;

● providing leadership in the delivery of an ambitious programme of public service reform, including a decisive shift towards preventative interventions, the further development of shared services and maximising the opportunities presented by digital technology;

● ensuring that the organisation offers maximum value for public money by releasing resources through efficiency savings, building on significant efficiencies already achieved in procurement, facilities, travel and other operational costs, and adhering to the Government’s public sector pay policy;

● ensuring that the percentage of total expenditure devoted to administration costs remains at least 25 per cent below the comparable percentage for the UK Government;

● demonstrating our commitment to public sector staff by maintaining a policy of no compulsory redundancies;

● continuing to implement a Business Strategy which includes a commitment to investing in our people, an improvement programme and a programme of organisational development that will ensure we deliver with greater flexibility and higher impact for Ministers and for Scotland;


● maintaining high performance standards across the Government’s corporate functions, including the delivery of Ministers’ legislative programme, maintaining rates of response to ministerial correspondence, parliamentary questions and freedom of information requests, and the prompt payment of invoices;

● ensuring the Scottish Government as an employer plays a full part in the Modern Apprenticeship programme, offering young people the chance to gain experience and invaluable industry-recognised accreditations;

● continuing to demonstrate that we are an exemplar in diversity, equality and wellbeing through the implementation of our public sector equality duties and the delivery of the Civil Service diversity agenda;

● continuing to make progress in making the most effective use of the Scottish Government estate, in partnership with other public bodies; and

● implementing a range of measures to reduce emissions across the Scottish Government, including the installation of Building Management Systems in order to reduce energy consumption.

Draft Budget for 2013-14 and spending plans for 2014-15 are set out below.


Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Government Administration 214.7 206.9 197.8

Total Level 2 214.7 206.9 197.8

of which:

DEL Resource 207.2 201.8 192.7


AME – – –


Level 2

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Government Administration 214.7 201.9 188.3

Total Level 2 214.7 201.9 188.3

of which:

DEL Resource 207.2 196.9 183.4


AME – – –

ADMINISTRATION | 137


Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Scottish Government Staff 139.9 133.4 126.8

Accommodation 15.1 17.4 16.7

Other Office Overheads (1) 32.8 31.2 29.6

Training 4.2 4.0 3.8

Office of the Queen’s Printer for Scotland 0.1 0.1 0.1

Depreciation 15.1 15.7 15.7

Capital ICT Projects 5.5 3.7 3.7

Other Capital Expenditure 2.0 1.4 1.4

Total Level 2 (2) 214.7 206.9 197.8

of which:

DEL Resource 207.2 201.8 192.7


AME – – –

Note 1. Includes ICT projects and minor non-pay items e.g. travel, transport, stationery, hospitality, etc.

Note 2. The breakdown of spending plans for 2013-14 is subject to change as we seek to reduce overhead costs in favour of minimising the reduction necessary in the number of staff available for deployment to support existing and new priority activities.

CHAPTER 11 Crown Office and

Procurator Fiscal Service


The Crown Office and Procurator Fiscal Service (COPFS) provides Scotland’s sole and independent public prosecution and deaths investigation service. The Lord Advocate’s position as head of the systems of criminal prosecution and investigation of deaths is enshrined in the Scotland Act 1998.

The overarching responsibility of the Crown Office and Procurator Fiscal Service (COPFS) is to serve the public interest, investigating and prosecuting cases independently, fairly and effectively and investigating all deaths which require further explanation.

Our Role

We work with others across the criminal justice system to make Scotland safer and stronger — a place where all live their lives safe from crime, disorder and danger.

The public interest is at the heart of all we do as independent prosecutors. We take into account the diverse needs of victims, witnesses and communities and the rights of accused persons.

We also collaborate with others, including specialist support organisations across Scotland, to create an environment within the criminal justice system in which victims and witnesses feel confident contributing their evidence and feel that their information and support needs are met.

Our objectives are:

● to investigate, prosecute, and disrupt crime;

● to seize the proceeds of crime; and

● to investigate deaths that require explanation.


An effective, independent prosecution service is essential to the achievement of sustainable economic growth because it is fundamental to Scotland’s status as an attractive place to do business. Our work and achievements in targeting serious crime and in targeting and disrupting serious and organised crime in Scotland over recent years are particularly of note in this context.

CROWN OFFICE AND PROCURATOR FISCAL SERVICE | 139

More directly, in terms of training, unlike most employers of solicitors, we have continued to offer 20, two-year, legal traineeships each year. This year, we are starting a Modern Apprenticeship scheme with a first intake of 30 apprentices. We are currently recruiting these apprentices through fair and open competition so that under Civil Service rules, if our budget permits, we will be able to provide apprentices who do well with permanent jobs.

BUDGET CHANGES

There are no significant changes to the spending plans published in Spending Review 2011 and Draft Budget 2012-13.

OUR PRIORITIES

In 2013-14 we will be focusing on maintaining effective operational delivery in what we recognise is a very challenging financial context. Our main functions will continue to be:




Operational delivery will include:

● the prosecution of serious, complex and organised crime, whether in the High Court or before a Sheriff and jury, including the prosecution of terrorism, murder, serious assaults, sexual offences, drug and people trafficking, fraud and organised crime and recovering the proceeds of crime;

● taking efficient, timely and appropriate action in respect of the large majority of the 300,000 crime reports submitted each year which relate to offending behaviour which would not attract a disposal at jury court level but which merit imposition of a Direct Measure or prosecution in the Justice of the Peace and Sheriff Courts, without a jury;

● the investigation of deaths that require further explanation, discharging the public duty to investigate relevant categories of deaths promptly, appropriately and with sensitivity to the needs of the bereaved; and

● improved support for victims of crime and vulnerable witnesses.

Capital expenditure will primarily be invested in maintaining and, where possible, improving our Information Technology systems in order to increase case-processing efficiency.

Draft Budget for 2013-14 and Spending plans for 2014-15 are set out below.


Table 11.01 Detailed spending plans (Level 2)

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Crown Office and Procurator Fiscal Service 108.1 108.1 108.7

Total Level 2 108.1 108.1 108.7

of which:

DEL Resource 104.5 104.5 105.1


AME – – –

Table 11.02 Detailed spending plans (Level 2 real terms) at 2012-13 prices

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Crown Office and Procurator Fiscal Service 108.1 105.5 103.5

Total Level 2 108.1 105.5 103.5

of which:

DEL Resource 104.5 102.0 100.1


AME – – –

Crown Office and Procurator Fiscal Service

Table 11.03 More detailed categories of spending (Level 3)

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Staff Costs 67.2 67.1 67.1

Office Costs 4.4 4.4 4.4

Case Related 12.5 12.8 13.1

Centrally Managed Costs 20.4 20.2 20.5


Total 108.1 108.1 108.7

of which:

DEL Resource 104.5 104.5 105.1


AME – – –

CROWN OFFICE AND PROCURATOR FISCAL SERVICE | 141


The Crown Office and Procurator Fiscal Service (COPFS) provides Scotland’s sole and independent public prosecution and deaths investigation service. The Lord Advocate’s position as head of the systems of criminal prosecution and investigation of deaths is enshrined in the Scotland Act 1998.

The COPFS is responsible for making decisions about, and bringing prosecutions for, all criminal offences in Scotland. The COPFS also has the duty to investigate all suspicious deaths and those that are unexplained or require further explanation and is responsible for deciding whether criminal proceedings or a Fatal Accident Inquiry should be held in respect of such a death and for conducting all such proceedings and inquiries.

Responsibility for investigating complaints against the police, involving allegations of criminal conduct, rests with the COPFS. Prosecution of police officers is undertaken on the instruction of Crown Counsel.

The COPFS’ Serious and Organised Crime Division and the Civil Recovery Unit investigate and recover proceeds of drug trafficking and other serious crime.

The COPFS also provides a Victim Information and Advice Service across Scotland.

The COPFS works closely with its criminal justice partners to help make Scotland a safer place and plays a pivotal role in maintaining the security and confidence of all communities of Scotland in the criminal justice system, making the system more accessible and responsive.

The key aims of the COPFS are to:




In this way, the COPFS contributes to a safer and stronger Scotland by ensuring that cases are brought to a conclusion in the most appropriate way, as quickly as possible. By tackling crime quickly and using a range of measures appropriate for specific offences, the COPFS portfolio will help to reduce crime and the fear of crime, improve the conditions which support economic development and social capital in communities, and enhance the quality of life of all Scottish people.

CHAPTER 12 Local Government


Local government provides a wide range of services and plays a major role in local partnerships that are essential to the delivery of the outcomes that matter to the people of Scotland. The partnership between the Scottish Government and local government established in 2007 remains a cornerstone of our approach to government in Scotland. Following the 2012 local government elections, the Scottish Government was keen to build on that partnership given that local government are key partners with whom we will deliver many of the Public Service Reform ambitions building on the findings of the Commission on the Future Delivery of Public Services. These will include the implementation of the review of community planning and the integration of adult health and social care provision.

Through this partnership and through community planning partnerships, local government makes a substantial contribution to the delivery of the Government’s programme, as set out in the Government’s Programme for Scotland 2012-2013 and the Government Economic Strategy.


In 2013-14, the Scottish Government will provide a total baseline package of resource and capital funding of £9,914.2 million in support of local authorities’ services. This figure includes income from business rates. However, it does not include the Council Tax, or income from fees and charges which local authorities collect themselves nor funding provided directly from the UK Government nor funding from the European Union. The package will be focused on delivery of our joint priorities of growing the Scottish economy and protecting frontline services and the most vulnerable in our society, including through a greater focus on prevention. This total funding package for 2013-14 consists of:

● a general revenue grant, which supports all services;

● non-domestic rate income, collected by local authorities, paid into a central pool; this is then redistributed along with the general revenue grant to each local authority, using a formula that takes account of relative need;

● a general capital grant to support local authorities’ spending on infrastructure and other projects; and

● a small number of specific revenue and capital grants.

LOCAL GOVERNMENT | 143

The Scottish Government guarantees the combined general revenue grant and distributable non-domestic rate income figure, approved by Parliament, to each local authority. A drop in non-domestic rate income is compensated for by an increase in general revenue grant and vice versa.

The delivery of services is the responsibility of individual local authorities who will do all they can to protect frontline services and as a result provide protection to the most vulnerable in our society. In so doing, they will have regard to the requirements of the Climate Change (Scotland) Act 2009 and the provisions of the Equality Act 2010. Actions that local authorities take will also continue to help grow the economy. These will be delivered in partnership with the Scottish Government and other agencies, and by undertaking activities at a local level. These activities include their planning function; economic strategy and policy; support for business start up and growth; export support programmes; economic, physical and social regeneration and skills and training related to employment or employability. Some of these actions are provided through the Business Gateway, complementing local authorities’ wider economic development activities, and through councils’ support to existing and new Business Improvement Districts within their areas. Local authorities themselves provide a major contribution directly to local economies through their purchases of goods and services.

Local government continues to be active in supporting the transition to a low carbon economy and in combating climate change, and is aware of the economic opportunities that will arise from this transition. Scottish councils have demonstrated consistent commitment and political leadership on climate change following the signing of Scotland’s Climate Change Declaration in 2007-08. Local authorities will continue to work towards the delivery of the new statutory obligations of the Climate Change (Scotland) Act 2009 and to provide leadership to wider civic society as Scotland moves to a low carbon economy.

Carbon reduction programmes and activities often require upfront expenditure. However they should generally result in savings for local government, for example through reduced energy bills, some with relatively short pay back periods. Reducing energy expenditure not only supports the climate change agenda, but can help local government during a period of significantly constrained public spending.

Clearly, local government has a range of competing spending priorities to consider but local and national government are committed to working together to reduce emissions as far as possible through our overall spending, and to build upon the strong foundations already established at national and local level to respond to the challenges and opportunities of climate change.

The partnership between local and central government has achieved a great deal to help support recovery and increase sustainable economic growth including the freezing of the Council Tax for five years in a row.

The Scottish Government has also fully implemented the Small Business Bonus Scheme from 2009-10 which has benefited over 85,000 business properties and will have reviewed the business rates system in 2012-13 to help improve transparency and streamline the system and identify opportunities to further promote sustainable growth.


BUDGET CHANGES

A number of changes have been made to our spending plans since the publication of the Scottish Spending Review 2011 and Draft Budget 2012-13. The changes in respect of local government revenue funding are as follows: a reduction of £954.7m/£953.9m following the transfer of responsibility for policing from local government to the new Scottish Police Authority (SPA); a reduction of £274.8m/£273.0m following the transfer of responsibility for the fire service from local government to the new Scottish Fire and Rescue Service; an increase of £23 million in 2013-14 as a result of the Department of Work and Pensions (DWP) transfer of the Council Tax Reduction Scheme; £3 million in 2013-14 for Free Personal Care; and an £8m/£8m reclassification of the Hostels Grant and Housing Support Grant former AME grants to DEL.

The establishment of the new Scottish Police Authority and Scottish Fire and Rescue Services will also result in a reduction of Capital funding of £14.8m/£21.7m and £15.1m/£22.2m respectively. The Capital funding will, however, be increased by £34.7m/£47.6m as a result of consequentials announced at Stage 3 of the Budget Bill on 8 February 2012.

OUR PRIORITIES

In 2013-14 we will make available to local government a total funding package amounting to £9,914.2 million. This total includes the Government’s best estimate of non-domestic rate income to be collected during 2013-14. The final non-domestic rates figure cannot be confirmed until later in the year as it is linked to the September Retail Price Index (RPI) figure. To access the full amount of this package, each local authority will require to agree formally to work with the Scottish Government to deliver a Council Tax freeze for the sixth consecutive year. How the financial support is to be distributed to authorities will be the subject of consultation with COSLA and set out in a Scottish Local Government Finance Circular early in December.

Given the continuing significant financial constraints on the Scottish Budget, this represents a challenging but fair settlement for local government which builds upon the financial commitment demonstrated in settlements over the previous four years.

Within the Local Government portfolio, the 2011 Spending Review maintained the 2011-12 cash settlement for NDRI/RDEL. The capital settlement, although calculated on maintaining share of the reduced overall capital budget, (-£8.8m/-£74.5m/ £52.1m), was then reprofiled with reductions in 2012-13 and 2013 14 of £120 million and £100 million respectively with a corresponding increase in 2014-15 of £120 million, with the remaining £100 million to be added back in 2015-16. By the end of the Spending Review period, local government’s share of DEL plus NDRI will have been maintained above the level inherited in 2007.

As part of the wider partnership based approach to the delivery of joint priorities, the Scottish Government and local government will each continue to do what is required to ensure delivery of the specific commitments agreed as part of the Spending Review, as described below. In addition, the Scottish Government and local government are committed to working together to ensure that our collective capital resources are used to best effect to support economic growth. The Scottish Government and local


government will also ensure that a preventative approach to key strategic outcomes is embedded in new Single Outcome Agreements (SOAs) to be agreed in April 2013. Working with partners, we expect that local government will ensure that Community Planning Partnerships set out in new SOAs the plans, resources required and oversight arrangements for the delivery of this approach and will ensure these arrangements are fully built into their own budget decision-making processes.

Local government has a key role to play in this agenda and this is reflected in the funding settlement for 2012-15. A new Change Fund to support preventative approaches in the early years was established in 2012-13 and the change fund to enable independent living for older adults has been expanded. Together national and local government and their community planning partners will continue to invest up to £198 million through these change funds to support the greater alignment of budgets across the public sector on a preventative and outcomes-focused basis.

Local government also makes a vital contribution to creating a more equal Scotland, including working with wider public and private and third sector partners and communities themselves in Community Planning Partnerships. Protecting the most vulnerable in our society continues to be more difficult because of the financial constraints, but local and national government agree that decisions needed to balance the budget must take full account of their needs. The Scottish Government’s commitment to a more equal Scotland includes in this portfolio a preventative approach which will be at the heart of new SOAs, the Council Tax freeze and the commitment to the extension of exemption from the Council Tax to articulating students.

The Council Tax freeze, although providing welcome relief to all Council Tax payers in these difficult economic times, continues to provide the greatest benefit, as a proportion of net household income, to households in the lower deciles. The preventative spending change funds covering early years and independent living for older adults have also brought about positive impacts on vulnerable groups and support the greater alignment of budgets more generally. The Scottish Government will continue to work collaboratively with local government towards outcome-focused public services, using the framework provided by the Equality Act 2010. This helps public bodies to recognise and reduce negative impacts on vulnerable groups and also helps to promote equality by ensuring that services are responsive to local people’s needs.

Empty property relief will be reformed to provide strong incentives to bring vacant premises back into use, reducing the prevalence of empty shops in town centres and supporting urban regeneration.

The health and social problems associated with alcohol and tobacco use are well documented and we remain firmly committed to addressing them. These not only affect the health of the population, but create additional burdens on policing, business, local authorities and the NHS. In order to address these, the business rates paid by large retailers who sell tobacco and alcohol products were increased by a supplement from 1 April 2012 and this will continue for the remainder of the current Spending Review period. The estimated income raised from this supplement has and will continue to support preventative spend, helping the Scottish Government sustain spend on direct business support and the preventative measures to be taken forward by local authorities and their partners in NHSScotland and Scottish Government.


Council Tax

As part of the overall funding package, the Scottish Government will provide a share of a further £70 million in 2013-14 to those councils which freeze their Council Tax rates at 2007-08 levels for a sixth consecutive year. In the light of current continuing tough economic circumstances, extending the Council Tax freeze in 2013-14 will provide further protection to hard-pressed households across Scotland, many of whom have been affected by the economic downturn and UK welfare reform.

Education

Teacher numbers will be maintained in line with pupil numbers and places will be secured for all probationers who require one under the teacher induction scheme.

Police and Fire

The previous commitment by local government to provide sufficient money to maintain the number of police officers at least at 17,234 has transferred, along with the Police and Fire funding, to the Justice portfolio following the reform of Police and Fire services.


Table 12.01: Detailed spending plans (level 3)

Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

General Resource Grant 7,747.6 6,858.2 6,605.4

Non-Domestic Rates (NDR) and other AME Grants 2,272.0 2,435.0 2,664.0

Support for Capital** 430.7 419.7 613.2

Specific Resource Grants* 571.2 98.9 98.9

Specific Capital Grants* 132.3 102.4 150.2

Total Local Government Portfolio 11,153.8 9,914.2 10,131.7

Other Local Government* 323.9 – –

Total Local Government Level 3 11,477.7 9,914.2 10,131.7

of which:

DEL Resource 8,318.8 6,957.1 6,704.3

DEL Capital 563.0 522.1 763.4

AME 2,272.0 2,435.0 2,664.0

* Held within other portfolio chapters: includes both resource and capital specific grants and ring-fenced funding for police numbers and police and fire pensions for 2012-13 only.

** The 2012-15 capital allocations have been reprofiled (-£120/-£100/+£120 million with the remaining £100 million to be added in 2015-16).

Notes:

1. The Scottish Government guarantees the combined General Resource Grant plus the distributable Non-Domestic Rates (NDR) Income figures. The figures above are provisional as the NDR figure cannot be finalised until the September RPI figure is known and a decision taken on whether to increase the non-domestic rates poundage by the full increase in RPI. Any increase in NDR will be matched by the same reduction in General Resource Grant and vice versa.

2. The 2012-13 figures include the funding for the police and fire services which have been removed from both 2013-14 and 2014-15 following the formation of the single police and fire authorities. The 2012-13 figures also include funding for police and fire pensions and the cost of funding the additional police officers. The reduction in police funding includes the latest estimated figures for the funding of police loans charges (£5.8 million in 2013-14 and £5.4 million in 2014-15).



Level 3

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

General Resource Grant 7,747.6 6,690.9 6,287.1

Non-Domestic Rates (NDR) and other AME Grants 2,272.0 2,375.6 2,535.6

Support for Capital** 430.7 409.5 583.7

Specific Resource Grants* 571.2 96.5 94.1

Specific Capital Grants* 132.3 99.9 143.0

Total Local Government Portfolio 11,153.8 9,672.4 9,643.5

Other Local Government* 323.9 – –

Total Local Government Level 3 11,477.7 9,672.4 9,643.5

of which:

DEL Resource 8,318.8 6,787.4 6,381.2

DEL Capital 563.0 509.4 726.6

AME 2,272.0 2,375.6 2,535.6

* Held within other portfolio chapters: includes both resource and capital specific grants and ring-fenced funding for police numbers and police and fire pensions for 2012-13 only.

** The 2012-15 capital allocations have been reprofiled (-£120m/-£100m/+£120 million with the remaining £100 million to be added in 2015-16).


Table 12.03: Specific Grant Funding and Other Local Government Funding 2012-2015

2012-13 Budget

£m

2013-14 Draft

Budget £m

2014-15 Plans

£m

Justice

Resource Specific

Police 480.3 – –

Criminal Justice Social Work 86.5 86.5 86.5

Resource Other

Police Numbers 33.0 – –

Police Pensions 222.6 – –

Police Loans Charges 9.0 – –

Fire Pensions 59.3 – –

Capital Specific

Fire 16.4 – –

Infrastructure, Investment and Cities

Resource Specific

Housing Support Grant (AME in 2012-13 only)* 1.2 1.0 1.0

Hostels Grant (AME in 2012-13 only)* 7.8 7.0 7.0

Capital Specific

Vacant and Derelict Land 8.1 7.5 11.0

Transfer of Management of Development Funding (TMDF) 79.5 73.1 107.3

Assistance to Owners Affected by Glasgow Stock Transfer 5.5 0.9 1.2

Regional Transport Partnership 16.7 15.3 22.5

Cycling, Walking and Safer Routes 6.1 5.6 8.2

Education and Lifelong Learning

Resource Specific

Gaelic 4.5 4.5 4.5

Total Specific Revenue Grants (DEL)Total Specific Revenue Grants (AME)Total Other ResourceTotal Specific Capital Grants

571.29.0

323.9132.3

98.9––

102.4

98.9––

150.2

* Housing Support and Hostels Grants moved from AME to DEL in 2013-14. A decision on whether to subsume the grants within the General Revenue Grant is still the subject of discussion with COSLA.


Local Government’s Spending Plans 2012-13

For information purposes only, Scotland’s local authorities have budgeted to spend the total resources available to them from the Scottish Government’s funding and income raised locally through the Council Tax on services as set out in table 12.04.

Table 12.04: Local government revenue expenditure plans 2012-13

2012-13 Budget Estimate – Net Revenue Expenditure

2012-13 Budget

£m

Education 4,612.6

Social Work 2,896.3

Police 950.6

Fire 263.4

Roads and Transport 475.4

Environmental Services 679.9

Planning and Development Services 288.8

Culture and Related Services 600.1

Emergency Planning 5.1

Administration of Housing and Council Tax Benefits 28.1

Private Sector Housing Renewal 27.5

Housing Benefits 8.7

Non Housing Revenue Account Housing 45.2

Homelessness 76.9

Housing Support Services 187.8

Welfare Services 8.0

Licensing -0.4

Elections 16.8

General Grants, Bequests and Donations 9.1

Registration of Births, Marriages and Deaths 5.0

Local Tax Collection (including Non-Domestic Rates) 39.2

Council Tax and Non-Domestic Lands Valuation 30.3

Non-Road Lighting 11.1

Corporate and Democratic Core 175.2

Statutory Repayment of Debt 1,263.7

Equal Pay/Single Status (Prior Year Cost Provision Only) 2.8

Other Miscellaneous Services 38.0

Non-Distributed Costs 94.4

Total Budgeted 2012-13 Net Revenue Expenditure 12,839.6

Note: The difference between the individual figures and the total figure of £12,839.6 million is due to roundings.

In addition, Scotland’s local authorities are planning a capital expenditure programme for 2012 13 as set out in table 12.05. The capital resources available to them to fund this programme come from grants from the Scottish Government and its agencies; self financed borrowing, capital receipts from the sale of assets and other sources.


Table 12.05: Local government capital expenditure plans 2012-13

2012-13 Budget Estimate — Gross Capital Expenditure (Figures taken from 2012-13 Quarter 1 forecasts)*

2012-13 £m

Police 79.7

Fire 39.2

Non-Housing Revenue Account Housing 250.5

Roads and Transport 1059.3

Education 1146.9

Social Work 228.4

Environmental Services 326.6

Culture and Related Services 593.8

Planning and Economic Development 340.0

Trading Services 49.6

Central Services 303.1

Other Services 88.7

Capitalisation of Equal Pay 0.0

Capitalisation of Other Revenue Expenditure 10.3

Capital Grants to Community Groups 5.5

Total Estimated 2012-13 Capital Expenditure 4,521.5

* Figures taken from 2012-13 Quarter 1 forecasts from local authorities (95 per cent) and 2011-12 Quarter 4 figures from joint boards (5 per cent).

Annex A

Table 1: Departmental Expenditure Limits by Portfolio

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

Health 11,483.0 11,713.0 11,870.5Other Health and Wellbeing 104.9 164.8 238.9Total Health and Wellbeing 11,587.9 11,877.8 12,109.4Finance, Employment and Sustainable Growth 486.5 532.1 506.7Education and Lifelong Learning 2,544.1 2,605.3 2,616.7Justice 1,341.0 2,546.6 2,527.4Rural Affairs and the Environment 530.9 521.1 522.1Culture and External Affairs 237.8 240.8 225.5Infrastructure, Investment and Cities 2,231.5 2,324.7 2,413.1Administration 214.7 206.9 197.8Crown Office and Procurator Fiscal 108.1 108.1 108.7Local Government 8,881.8 7,479.2 7,467.7Scottish Parliament and Audit Scotland 95.5 95.5 95.5Total 28,259.8 28,538.1 28,790.6

ANNEXES


Annex B

Table 2: Annually Managed Expenditure by Portfolio

2012-13Budget

£m

2013-14Draft

Budget£m

2014-15Plans

£m

Health and Wellbeing 100.0 100.0 100.0Finance, Employment and Sustainable Growth 3,200.8 2,827.6 2,939.7Education and Lifelong Learning 125.8 289.8 347.8Justice - - -Rural Affairs and the Environment - - -Culture and External Affairs - - -Infrastructure, Investment and Cities - - -Administration - - -Crown Office and Procurator Fiscal - - -Local Government 2,272.0 2,435.0 2,664.0Scottish Parliament and Audit ScotlandTotal 5,698.6 5,652.4 6,051.5

ANNEXES | 153

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ANNEXES | 155

Leve

l 22

01

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32

01

3-1

42

01

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5B

udge

tD

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get

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00

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cen

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gov

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ent

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07

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ital

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nom

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PA)

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1,0

40

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Tab

le 4

: Com

pari

son

20

08

-09

to

20

14

-15

Annex D

ANNEXES | 157

20

08

-09

20

09

-10

20

10

-11

20

11

-12

20

12

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20

13

-14

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1. F

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20

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ANNEXES | 159

Table 5: Estimated payments under PPP contracts2012-13 2013-14 2014-15

£m £m £mHealth and Wellbeing 224.0 230.0 236.0Finance, Employment and Sustainable Growth1 140.0 139.0 142.0Education and Lifelong Learning 326.0 332.0 339.0Justice 48.0 52.0 55.0Rural Affairs and the Environment - - -Culture and External Affairs - - -Infrastructure, Investment and Cities 225.0 230.0 240.0Administration - - -Total 963.0 983.0 1,012.0

Note

1. The FESG figures comprise PPP projects undertaken by local authorities in the Level Playing Field Support funding round and include for example, waste management and schools projects. Figures for the majority of school projects however are included under Education and Lifelong Learning.

The table shows the total unitary charges of all the PPP projects that are operational in each of the years and represents the total amount that public sector bodies estimate they will pay or will expect to pay in each year for PPP projects. The unitary charge covers all the integrated services that the PPP consortium will provide for the length of the contract and includes the upfront construction costs, lifecycle maintenance and facilities management where appropriate.

Annex E


Annex F Glossary

Annually Managed Expenditure (AME)

Annually Managed Expenditure is spending that does not fall within Departmental Expenditure Limits (DEL). AME is generally less predictable than expenditure in DEL and is not subject to multi-year limits. It is set each year and contains those elements of expenditure that are not readily predictable. For example, NHS and Teachers’ pensions.

Audit Scotland

Audit Scotland was set up in April 2000 to audit the accounts of the Scottish Government and other public sector bodies in Scotland, and to ensure that public funds are used properly, efficiently and effectively.

Barnett Formula

The Barnett Formula allocates to Scotland a population share of changes in comparable spending programmes in England. Comparability is the extent to which services delivered by Whitehall departments correspond to services delivered by the devolved administrations. Barnett only applies to expenditure classified within Departmental Expenditure Limits — about 85 per cent of Scotland’s total budget.

Best Value

Best Value is about continuous improvement, seeking to change what we do in a way that transforms and sustains the delivery of quality public services in Scotland.

Budget Exchange (BX)

HM Treasury allow the Scottish Government to carry forward DEL underspends and draw down these underspends up to a maximum of 0.6 per cent on the Resource budget and 1.5 per cent on the Capital budget.

Cash Terms

Figures expressed in cash, or nominal, terms are not adjusted for the effect of inflation (See Real Terms).

Common Agricultural Policy (CAP)

The CAP was set up under the European Union Treaties to increase agricultural production, provide a fair standard of living for farmers and make sure that food is available at reasonable prices.

ANNEXES | 161

Cross-border Public Authorities

The Scotland Act 1998 allows for cross-border public authorities to be specified by Order in Council. They are public bodies and agencies, government departments, offices or office-holders which have functions exercisable in or as regards Scotland that do not relate to reserved matters (GB/UK bodies which deal only with reserved matters in Scotland cannot be cross-border public authorities). Examples include the Forestry Commission and the National Criminal Intelligence Service.

Consumer Prices Index (CPI)

The Consumer Prices Index is an internationally comparable measure of inflation used by the UK Government that measures the change in the general level of prices charged for a defined “shopping basket” of goods and services bought for household consumption. The CPI forms the basis of the UK Government’s inflation target that the Bank of England’s Monetary Policy Committee is required to achieve.

Departmental Expenditure Limits (DEL)

Departmental Expenditure Limits (DEL) forms the majority of the Scottish Government’s budget. This is the budget provision that the Scottish Government can plan and control over the Spending Review period. The DEL budget is presented for both resource DEL and capital DEL. Resource DEL consists of fiscal DEL and non-cash ring-fenced DEL. Non-cash ring-fenced DEL covers depreciation and impairments and does not represent spending power for the Scottish Government.

Depreciation

A depreciation charge is a non-cash item which measures the wearing out, consumption or other reduction in useful life of a fixed asset.

European Structural Funds

European Structural Funds include the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Fund for Rural Development (EAFRD) and the European Fisheries Fund (EFF). They are used to tackle regional disparities and support regional development through actions including developing infrastructure and telecommunications, developing human resources and supporting research and development. The Scottish Government is the ‘managing authority’ for the Funds in Scotland.

Executive Agency

Semi-autonomous executive agencies operate within a framework set by the responsible Cabinet Secretary or Minister, which specifies policies, objectives, and available resources. All agencies are set annual performance targets by their Minister, who in turn accounts to Parliament for the work of the agency.


Gross Domestic Product (GDP)

The Gross Domestic Product is a measure of the total economic activity in a region. References to growth in the economy are quoting growth in GDP. It is a measure of the total amount of goods and services produced within a year in a country. In the UK, three different approaches (measuring production, income or expenditure) are used in the generation of one single GDP estimate.

Local Government

All 32 local authorities in Scotland.

Non-Departmental Public Body (NDPB)

A body that operates independently of Ministers, although Ministers have ultimate responsibility. There are two main types of NDPB: executive NDPBs, which carry out administrative, regulatory, executive or commercial functions; and advisory NDPBs, which provide independent, expert advice to Ministers.

Non-Profit Distributing (NPD)

The Non-Profit Distributing model is a system for funding capital infrastructure projects. It is 100 per cent debt-financed and maximises value for money and allows shareholder transparency.

Office for Budget Responsibility (OBR)

The Office for Budget Responsibility (OBR) was formed in May 2010 to make an independent assessment of the public finances and the economy for each UK Budget and Pre-Budget Report.

Prudential Regime

The prudential regime for local authority capital expenditure took full effect on 1 April 2004. It allows local authorities to make their own decisions about how much to borrow or spend, but they are under a duty to determine how much they can afford and to keep that under review.

Real Terms

Any price or value adjusted for the effect of inflation.

Scottish Futures Trust (SFT)

The Scottish Futures Trust is the independent company established by the Scottish Government to deliver value for money across public infrastructure development.

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Single Outcome Agreement (SOA)

The Concordat between the Scottish Government and COSLA in November 2007 required each local authority and its Community Planning Partners to develop a Single Outcome Agreement. They are intended to set out outcomes at a local level which local public bodies will work towards in order to contribute to the National Outcomes set by government. They are characterised by streamlined external scrutiny, effective performance management and an outcomes focus.

STPR

The Strategic Transport Projects Review (STPR) supports the process of prioritisation applied by Scottish Ministers when allocating the capital budget across all sectors and when determining the level of infrastructure investment that can be supported from revenue finance (e.g. public private partnerships (PPP/PFI), non-profit distributing, and borrowing against regulated asset base (RAB) for investment in rail infrastructure).

Total Managed Expenditure (TME)

Total Managed Expenditure comprises the Departmental Expenditure Limit (DEL) and Annually Managed Expenditure (AME).

Scottish Budget Draft Budget 2013-14

Scottish

Bu

dget D

raft B

ud

get 20

13

-14


ISBN: 978-1-78256-016-6


APS Group Scotland DPPAS13304 (09/12)

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