Chamber and committees

We can certainly provide you with the information on the detailed discussions with that organisation about its targets. In difficult times, we have had to prioritise where resources will have the most impact, and part of that discussion involves looking at organisations’ reserves. I am not saying that it is the whole picture or that it replaces every pound; all I am saying is that it is taken into account in relation to the funding that organisations have to deploy.

I will hand over to Neil Gray on that question. There are quite a lot of complexities in looking to the future beyond ScotWind, but I will let Neil answer on that.

On your fundamental point about tackling fuel poverty and making sure that the measures that are taken to tackle climate change are not exacerbating inequalities, I am very mindful of the discussions with the housing sector about moving to net zero. Heating systems have to be done in a way—this is a red line for us, as a Government—that does not push more people into fuel poverty because the systems are more expensive to run. We have to make sure, in every step that we take, that we are mindful of those who could benefit most if we get it right, but who could also be at risk if we do not get it right. Heating systems are one example.

Yes.

As a basic answer to your question I will say that those are matters for negotiations, but it is important to me that Crown Estate Scotland can continue to do the good job that it is doing.

I will kick off. As I have touched on, the joint budget review was to take forward three strands of work. The first strand was to have a dedicated climate narrative in the budget document—which we have done. The second strand was to enhance the categorisation that we talked about earlier, which we have also done, although it is a work in progress.

The third strand was to develop and implement a Scottish Government-wide net zero assessment. That could be described as an iterative process, with the intention being to roll it out across the wider Scottish Government from late 2024. Following roll-out, there will be a review to ensure that it is fit for purpose.

That is about selecting a broad range of policies from across the Scottish Government to pilot the methodology and go further than we have so far. The benefit of that will be that we will be able to look at policies as they develop and check whether they are impacting positively and in the way that they need to, so that we meet our climate change goals. Once completed, the three strands will have taken us to a better place.

There will be work in progress to ensure—as we go forward and are able to compare budget to budget, for example—that we are able to provide more monitoring of whether we are making the improvements that we need to make. The new methodology evaluates each spending line on its potential impact, either on emissions or adaptation.

The capital and financial transactions funding position for 2024-25 is £6.4 billion, and it apportions around 42 per cent of spend to positive activities in absolute terms; that means around £2.7 billion for positive spend for climate. There is a lot that would be described as being in the neutral space. The resource budget is £36 billion for 2024-25.

Clearly, most of that spend is on front-line services including the NHS, social security, local government and so on. Seventy-five per cent of the total resource budget is categorised as neutral spend, so it is not having a negative impact on climate, but neither is it having a positive impact. It is important to make that point when we bring in the resource budget. The bulk of it is going on staffing, which will not have a positive or a negative impact. The resource side of things will have a minimal carbon impact.

As this is the first year, there is potential for improvements to be made to the evidence base that is used to assess impact. We see this as the start of a process, not the end of the journey. Perhaps after the experience of this budget, the committee might be happy to revisit it to see where we might make further improvements.

There will be such information in the evidence base on what makes the biggest impact. That is where we get into quite difficult decision making, because if there is an array of things that make an impact to some extent, but there is only a certain amount of money to deploy, we then have to make judgments about where the biggest impact will be at this moment in time. That does not mean that we will not revisit it. Philip Raines’s point was that the budget trajectory is not a straight line. There will be peaks and troughs, but the destination is the planting of more trees and meeting the targets. In years when there are big real challenges, we sometimes have to prioritise other areas.

Neil Gray may want to—

I guess that I could not say, hand on heart, that it will all be fully functioning across every line and policy decision by the time of the next budget. It probably will not be, because it is complex, but we are on a journey that is about all the stages, including the policy development stage as well as the negotiations to agree policy and the amount of money that we are going to spend on it. When we are looking at policy, we need to embed analysis of the impact on net zero from the start and be able to set it out.

We talked about that a few months ago when we were looking at the outcomes of the small vessel replacement programme at phase 1, when the outline business case was presented at the end of 2023. Subject to approvals and procurement, that could see the delivery of the seven new small vessels between 2026 and 2028.

The reprofiling was due to the stage that the discussions had got to, in terms of the detail. The funding follows where the contracts and the negotiations are at, and the reprofiling was due to the stages at which the funding would be deployed not being reached.

You will know this, Convener. When you set out your funding profile, it is based on what you think that the timeframe will be. Inevitably, things change, and that is what happened. Transport Scotland gave assurances that that would have no impact on the end point, but it was about the profiling of the resources that were going to be needed at which stages. That allowed us to make those in-year savings.

That does not mean that the pot is going to be any smaller by the end of the process—far from it—but the timeframe of when and what is spent has shifted because of where the contract negotiations were. That is what I set out a few weeks ago.