Chamber and committees

The Government is committed to delivering the £500 million fund over 10 years, with £20 million being allocated in the first year. However, many of the projects that have come forward are multiyear projects, so we have committed up to £50 million for the next four years; some of those projects will account for that extra money. The Scottish Government will introduce its budget in the next few weeks, including next year’s funding for the just transition fund. We are committed to that and have no plans to change it.

There are challenges, because the money is capital funding and I am sure that many projects will require revenue funding, but we can only do what we can do. We have a capital budget, and we are using financial transactions. There are always challenges, because there is not enough resource to achieve what people want to achieve, and the UK Government, the Scottish Government, the private sector and the public sector all have to play their roles.

I know that the Scottish National Investment Bank is funding some just transition and decarbonisation projects, but I do not have details in front of me. It is playing a role and it has a big responsibility with regard to supporting the net zero transition. It is important to say that, across the board, our enterprise companies and the Scottish National Investment Bank are signed up to prioritisation of the transition to net zero, so they are playing a role. They are also playing a role in peatland restoration and other issues.

SE is making substantial investments in projects that are involved with decarbonising certain sectors. I do not have a list of the investments in front of me, because they are not part of my responsibilities, but I know that SE is playing that role and that it will have to do more of that in the future.

Catriona Laing might be able to add to that.

Zero Waste Scotland and Scottish Enterprise—in fact, the enterprise companies generally—are running schemes to help SMEs to take advantage of net zero opportunities. Zero Waste Scotland runs a loan scheme for SMEs. Scottish Enterprise and Business Gateway are now giving advice to small businesses about steps that they can take for net zero as well.

A lot more must be done on that. I have a vision for the situation that we must create. I talk about just transition plans for sectors of the economy and place-based just transition plans for Grangemouth. In 2024, we will look at regional just transition plans for regions of Scotland.

We would also like every business and organisation in Scotland to have a just transition plan, so we need to work with the business community. Let us take the example of a car mechanic business that works with petrol and diesel vehicles. We have to find a way to support such a business to have its own just transition plan, so that, as petrol and diesel cars are phased out in a few years’ time, the business will survive and people will still be in work. We have to work with the business community to—

The Just Transition Commission is unique. It has been encouraging to hear from other countries that they are impressed by the fact that we have such a commission. We have also had a lot of good feedback from within Scotland about the people who are on the commission.

Its role is to give independent advice to Government, but we have a relationship. I have met the new commission only once formally in the past few months, but we will be having much more intense engagement going forward. The commission has invited us to ask it for advice and whether there is anything that it can help us with. Obviously, it is considering some of the big challenges and is keen to know what our priorities are so that it can give us the right advice. That will intensify our engagement.

We have of course accepted the recommendations from the commission’s two reports. We will respond to the second report and we have accepted all the recommendations of the first one.

It is a good relationship. The commission will hold our feet to the fire—that is why it is there—but it will also play a constructive role in giving advice. From the commission’s reports, and from our discussion today, it is clear that there are no easy or quick solutions to some of the issues that we are speaking about. Also, we are doing this for the first time. I think that the commission recognises that, and I hope that we all recognise it as we go forward.

The commission will play a very valuable role.

That is a good question, and it is on something that we have wrestled with. We want to get the fund under way, because we do not have time: we cannot wait several years for perfect plans for the future, especially when we are in an evolving situation. We therefore chose the route of no-regret decisions—that is, all decisions will contribute in their own way, because they are all good projects. There are large projects, smaller projects, community projects, strategic projects, science projects, skills projects and so on, so there is a good basket of things that are required for the just transition in the years ahead.

We intend to use the next two or three years to develop a more strategic approach. What we are funding just now fits in with that direction of travel, whether in relation to hydrogen or plugging the skills gaps that will need to be addressed in the years ahead. We are confident that all the projects are good and robust projects that will contribute to the just transition.

However, we know that we have to work on the fund for the north-east and Moray in relation to the strategic robustness that is required to ensure that it is transformational. We have to ensure that when we look back in 10 years, we will see that we have invested £500 million of public money in transformation, which is a big challenge. I hope that some of the projects will be transformational, and that when we will look back, they will have benefited not only the north-east of Scotland but the rest of the country.

I thought that you were going to give me a warning there. [Laughter.]

That is a good challenge to put to the Government and to the local economic partnerships that are involved.

As a backdrop, I note that since day 1, when speaking to organisations, public sector groups and community groups in north-east Scotland, I have been clear that, in a project that is as vital for north-east Scotland as energy transition is—which includes the energy transition zone and development of Aberdeen harbour—if the neighbouring communities do not see benefits, the just transition will have failed in those areas.

When it comes to the plans for the energy transition zone, I understand that, recently, there has been some good community engagement, and that residents are now involved in plans for the future of that area. I hope that that is productive and that progress is made.

We have not directly funded any oil or gas companies. The development of the north-east economy cannot be supported without the involvement of the offshore sector and the oil and gas industry—

—which is a crucial part of the just transition. That industry has the skills, the expertise and the investment that will underpin the just transition. We need its buy-in and we need to work with it as it transitions over the coming decades because, irrespective of net zero policies, employment in oil and gas in Aberdeen and north-east Scotland is going to decline substantially by 2040 to 2050. The transition is therefore superimportant for the future economy, so those industries are part of the local economic partnerships with which we will work.

We must take care to say that none of the just transition funding that was announced has gone directly to oil and gas companies. We are supporting economic partnerships, of which the oil and gas sector has to be a part.

Through the area-based schemes, the Scottish Government funds local authorities to carry out retrofitting and other such measures in the renewable energy sector, so the situation that has arisen is not necessarily the Government’s direct responsibility. It might be that various factors have slowed down the implementation of some schemes over the past couple of years, but I would have to investigate the reasons behind that. I am happy to do that and come back to the committee.