Cash boost – maybe

Summary

The Draft Infrastructure Investment Plan for Scotland details around £24 billion of major projects and large programmes. Whilst all the proposed infrastructure investment will inevitably impact local places (everything has to be built somewhere), there are a number of investments where tangible local socio-economic benefits are more readily recognisable and which will be discussed in this Swift Read. The plan also contains several proposals which could deliver significant environmental and health benefits, these too will be discussed in more detail in this brief.

Upon analysis, it is clear that the Draft Infrastructure Investment Plan genuinely aspires to have a positive social, environmental and economic impact at local levels. Indeed, many of the proposals have the potential to achieve just that provided care is taken to ensure alignment with regional development priorities and strategies. This brief should be of interest to local authorities seeking further clarification on what infrastructure investment over the next parliamentary term may mean for them.

Briefing in full

Introduction

Scottish Government recently released the Draft Infrastructure Investment Plan for Scotland 2021-22 to 2025-26. Complimented with a £24 billion price tag and the catchy title ‘A National Mission with Local Impact’, the draft plan is packed full with infrastructure projects which, if realised, could have significant impact at local levels. This swift read will draw out the flagship proposals within the draft plan and discuss the implications that they may have for local government. This brief should be of interest to authorities seeking further clarification on what infrastructure investment over the next parliamentary term may mean for them.

Background

The draft infrastructure investment plan builds upon recommendations made by the ‘Infrastructure Commission for Scotland’, an independent body set up by ministers in 2019. The plan presents investments that the Scottish Government intend to deliver either itself or through its own agencies and non-departmental public bodies. It therefore does not include external investments by the UK Government or the private sector. Furthermore, it does not include investments made by councils.

It is also important to note that the Draft Infrastructure Investment Plan has been released ahead of the UK spending review and confirmation of future budgets for Scotland. In other words, there is currently no guarantee that Scottish Government will be licensed with the fiscal flexibility to implement the entirety of the proposals detailed within the plan. However, with the cost of borrowing historically low and in the midst of significant challenges (not least climate change, the Covid-19 pandemic and the small matter of Brexit), the argument that there has never been a better time to invest in Scotland’s future will undoubtedly resonate with many.

The Draft Infrastructure Investment Plan for Scotland 2021-22 to 2025-26

The Draft Infrastructure Investment Plan details around £24 billion of 
major projects and large programmes that, according to Cabinet Secretary for Transport, Infrastructure and Connectivity, Michael Matheson, are ready to be confirmed now. The plan is centred around 3 key themes, namely: Enabling the transition to net zero emissions and environmental sustainability; Driving Inclusive Economic Growth; Building Resilient and Sustainable Places. These themes link directly to Scotland’s National Performance Framework and the UN SDGs, whilst being closely linked to the National Planning Framework and soon to be updated Climate Change Plan.

The draft plan includes significant proposed investment including: active travel; decarbonisation of heat (including public sector estate); local authority recycling collection infrastructure and improved landfill gas capture; increasing forest cover; superfast broadband rollout; bridge and road maintenance; city region and regional growth deals; national islands plan; place-based investment programme; supporting Local Housing Strategies and regional development priorities; decarbonisation of Scottish Water; and, a Learning Estate Improvement Programme.

According to Scottish Government, the overarching themes and specific investments proposed have all been considered within the context of post-Covid-19 recovery and long term trends including climate change, technological developments, and demographic change. This includes specific reference to taking advantage of ‘a number of positive shifts as people’s lives became home-based, for example towards active travel or to make more use of digital services’.

Tangible local socio-economic benefits

Whilst all the proposed infrastructure investment will inevitably impact local places (everything has to be built somewhere), there are a number of flagship investments where tangible local socio-economic benefits are more readily recognisable, they include:

• £2.8 billion in direct capital grant funding, over 5 years, to deliver more affordable and social homes, continuing to ensure the right types of homes in the right places reflecting and supporting Local Housing Strategies and regional development priorities
• £525 million to deliver the next five years of city region and regional growth deals
• £275 million to support community-led regeneration and town centre revitalisation as part of a new Place Based Investment Programme
• £55 million to tackle fuel poverty (additional investment)

Building a more equitable future

A recently published report by the Joseph Roundtree Foundation shows that poverty is on the rise in many parts of the UK, Scotland is no exception. The report goes on to state that increasing the provision of affordable housing (particularly social rent) constitutes one of the most effective responses available to try and reign in poverty (according to the report a significant factor keeping poverty levels in Scotland lower than in England is the relatively larger provision of affordable social housing that currently exists North of the border). With this in mind, the £2.8 billion investment in direct capital grant funding to build more ‘affordable and social’ housing will be welcome news for many. However, to maximise the positive impact of this investment, it is vital that Scottish Government ensure that development takes place with the support of local communities and authorities, whilst also supporting local housing strategies and regional development priorities as pledged. Furthermore, new developments should be future proof and high-quality to ensure a good living environment and operational savings for residents, as well as being consistent with the decarbonisation agenda.

It’s no secret that the last decade has not been kind on many Town Centres; empty high-streets lined with charity and pound shops have arguably become an archetypal image of social and cultural degradation in low-income areas. The Covid-19 crisis has only exacerbated this trend, keeping shoppers at home and accelerating the demand for online services. Taking this into consideration, £275 million to support community-led regeneration and town centre revitalisation as part of a new Place Based Investment Programme will also come as welcome news for many. Indeed, taken alongside the other proposed investments, this programme reinforces the participatory and well-being centred approach that much current Scottish Government policy eschews. However, given the severity of this challenge critics may argue that £275 million is only going to go so far.

Tangible environmental and health benefits

As well as tangible local socio-economic benefits, the Draft Infrastructure Investment Plan for Scotland also contains several proposals which could deliver significant environmental and health benefits, they include:

• £500 million over 5 years on active travel
• £350 million to increase forest cover, reaching 18,000 hectares of new woodland
• £95 million programme to decarbonise the public-sector estate
• £55 million new investment in energy efficiency
• £75 million to improve local authority recycling collection infrastructure, accelerate the land fill gas capture and improve waste data through electronic waste tracking
• £10 million annually for peatland restoration

Building a healthier future

Increasing active travel is widely recognised as a low regret approach to tackling a multiplicity of health and environmental ills; £500 million represents a significant investment and has clearly been conceived with the intention of capitalising on one of the few positive externalities of the Covid-19 pandemic. With regards to the £350 million investment to increase forest cover, this constitutes another low regret approach to address both health and environmental issues; as carbon sinks, biodiversity havens, and air purifiers, bigger forests and new woodlands can make a significant contribution towards reducing net greenhouse gas emissions whilst also improving the environmental quality for local residents and critters alike. Similarly, the peatland restoration programme has the potential to bring significant benefits, particularly in the environmental sphere. However, £10 million annually represents a much less significant investment.

Decarbonisation of the public-sector is imperative if Scotland is to meet its national and international commitments. Taking this into consideration, few are likely to object to the proposed £95 million programme to decarbonise the public-sector estate. However, despite clear alignment and coherency within the wider trajectory of current policy, some may argue that the investment lacks ambition and appropriate scale. Although, as noted, another £55 million has been proposed for new investment in energy efficiency taking the total of decarbonisation focussed proposals to £1.6 billion. Likewise, few are likely to object to the £75 million investment to improve local authority recycling collection infrastructure, accelerate the landfill gas capture and improve waste data through electronic waste tracking. Nevertheless, questions may again be raised regarding scale and ambition.

Implications for local government

As has been discussed, several of the proposals within the Draft Infrastructure Investment Plan for Scotland constitute low regret options that have the potential to reap significant social, environmental and economic benefits at the local scale. Most notably this includes investment in affordable, high-quality social housing, increasing forest cover, peatland restoration, public-sector estate decarbonisation and improved recycling infrastructure.

First and foremost, local authorities should do everything within their power to ensure that Scottish Government honour their pledge that investment will reflect regional development priorities; it would be disappointing (and damaging) if top-down implementation without community and council consultation were to lead to the wrong things being built in the wrong places. Furthermore, local government might evaluate their own capacity for undertaking infrastructure investment projects which incorporate one or more of the low regret, high benefit proposals discussed here. By doing so, local authorities can proactively tackle a range of social and environmental challenges whilst also (directly or indirectly) creating jobs which are much needed to drive a post-Covid-19 recovery.

Comment

• Upon analysis, it is clear that the Draft Infrastructure Investment Plan for Scotland genuinely aspires to have a positive social, environmental and economic impact at a local level. Many of the proposals have the potential to achieve just that provided care is taken to ensure alignment with regional development priorities and strategies.
• However, if there has never been a better time to spend (as the infrastructure plan seems to suggest), then questions may be asked regarding the scale and ambition of some of the proposals. This is especially true of proposals focussed on climate change mitigation and environmental sustainability.
• The Stern Review, one of the most comprehensive studies ever undertaken concerning the economics of climate change, concludes with one simple but terribly important finding: ‘the benefits of strong and early action far outweigh the economic costs of not acting’.
• (Green) infrastructure investment, especially proposals which require a large workforce (e.g. increasing forest cover or energy efficiency upgrades), would also create a significant amount of labour-intensive jobs in the short-term. According to a recent report by the LSE, this would help to ‘address the large-scale labour market displacements as the Covid-19 crisis continues to unfold and crucially, to help avoid costly and damaging labour market scarring’.