Chamber and committees

Yes, that is why it is not possible for us to do that. We get indicative allocations.

I should make it clear that what we see through the capital and resource spending reviews are not budgets; those figures are based on a number of assumptions, and we still have to go through the normal annual budget cycles. I should also emphasise that we do not have any clarity on funding beyond 2025; it is therefore not possible for us to plan in detail beyond that point, because we do not know what our allocations will be. What we have set out in the capital and resource spending reviews are the overall funding envelopes, but we will still have to work through the detail when we know what the actual allocations will be.

It was interesting to go through the evidence that the committee heard last week. We ran the competitive model for funding this year and the direct allocation process the year before. It is important for us to hear feedback and find out how local authorities are finding the process.

As with anything, there are pros and cons to both approaches, but it is all learning that we can take forward as we look to develop the islands programme in future years. I know that some local authorities will probably have received less through the competitive process than they would have received through the direct allocation process, whereas other local authorities will have received more. In some instances, it was quite a significant chunk of funding. Orkney Islands Council, for example, was allocated £1.5 million, which was over and above what it would have received through a direct allocation model. It is important for us to listen to the feedback to determine how we take the programme forward.

We decided to go with the competitive funding model this year to ensure that we delivered the funding as effectively and efficiently as we could within the available timescale. I know from evidence that the committee has heard that there were concerns about the local government elections, but we want to ensure that there is enough time to develop bids and that those bids are going to be successful and deliverable in the timescale to which we are working.

The model that we are using was built on the model for the regeneration capital grant fund, with which local authorities are familiar. That is why we adopted it. However, it is important that we take this learning into future years.

I agree with you—it does. Indeed, that comes through in the evidence and the feedback that we get. It can make things very difficult, and I appreciate the difficulties that businesses have when they apply for our grant funding rounds, because of the tight timescales for turning things around. I talked earlier about the model that we adopted for the islands programme and why we adopted it—we did so to ensure that projects were deliverable in the timescales that we had. I am absolutely sympathetic to that, but unfortunately, it is not possible for us to open up multiyear rounds, because we do not have the clarity of the seven-year funding rounds that we previously had when we were a member of the EU.

To be honest, I have to agree that it would be. Unfortunately, however, we are not in a position to do that, because we do not have certainty of funding for future years. It is therefore simply not possible to deliver to that timescale. I am really sympathetic to those arguments; ideally, we would be running multiyear rounds, but, unfortunately, it is just not possible because of the yearly allocations that we are getting from the UK Government.

When we were members of the European Union, it was different, because we had the clarity of seven-year funding. That made it possible for us to plan things. I know that the situation is difficult for local authorities, but it is just not possible for us to consider doing that at the moment.

I think that it does strike that balance. Another benefit of the competitive model was that it enabled us to ensure that we aligned national priorities with the needs of our communities on the ground.

In response to the first question that I was asked, I spoke about a project that we funded to build a nursery in Orkney. I think that, during your evidence sessions, you have heard about that project’s impact on retaining the population in Orkney and how critical it was. The competitive model has benefits in relation to such projects, and the work that SFT did in working with local authorities and giving its expertise was helpful throughout that process.

As I said, the approach was modelled on the regeneration capital grant fund scheme because that model is more familiar to local authorities. There are pros and cons on both sides when it comes to whether to use the competitive model or the direct allocation model. I think that some of the projects that were successful in the rounds show that the competitive approach has delivered on the national priorities and on what our island communities need.

That is right. We are significantly constrained. Obviously, we could do a lot more if we had the full allocation that we believe we are entitled to, but, instead, we received £14 million. From the regulations that we passed earlier in the year, the committee will be aware of what we can fund. We can fund a broader range of activities now, which is good, but we still have the same budget, of course. The resources that we have significantly constrain our ability to do more.

I believe that it is very effective. The ARIOB is critical, because we want to ensure that we are co-developing our policies for the future. It is really vital that we do that with the industries that are most affected by the policies that we are going to implement, because we need to make sure that the policies will work for our farming and agriculture industries.

An example of the impact of the ARIOB and how that has informed our work is the national test programme. I talked about the different phases within the programme. We launched track 1, on preparing for sustainable farming, earlier this year. We are looking at the roll-out of carbon audits and encouraging farmers to undertake those carbon audits, and, in the next phase of that, we will be encouraging farmers to consider doing soil testing as well.

The ARIOB was critical to how that developed, ensuring that the claims that people could make for carbon audits would be done in a way that was simple, accessible and easy for the industry to undertake, and its work has helped us to focus on the key areas that will make a big difference. That is where its work has been critically important, and that will continue to be the case. The ARIOB is, of course, an advisory group to the Scottish Government. It has been able to get all those interests together and hear those ideas, which has been really important for us, and I think that is why we have been able to do the work that we have done so far.

As far as emissions reductions and restoring and enhancing biodiversity are concerned, we already know a lot of the measures that work, and we will be able to show as much. We have a number of different networks that it is important to highlight, such as our integrating trees network. I have also talked about the farming for a better climate initiative and the work that we have done in that respect on soils, and we also have the agriculture, biodiversity and climate change network. We are asking farmers to join that, because the more who do so, the better we can showcase different types of work and their impact.

I go round and speak to farmers, and it is incredible to see the efficiencies that they have made, the impact that they have had on their emissions reductions and what they have done for biodiversity. We know that that will get better if farmers can see what is happening on similar farms; after all, they learn from each other more than from anything else. As a result, it is important that farmers look to those networks and take part in them.

Again, we are at the start of exploring what can be done. If there is potential there, we will need that extra investment, and either capping or tapering can help. It is important that we at least consider the option.

I can give you the example of our carbon audits. I do not know whether George Burgess has the exact figures—I will give him a minute to think about it—but there has been greater uptake in our carbon audits in the first quarter of this year than there was in the whole of last year, which is a really positive and encouraging sign. We will also open the window for the soil-testing component later this year. The committee will probably be aware from its visits that a lot of people are already undertaking a lot of the measures that we want to see, and, as I have said, the uptake in the carbon audits has been a really encouraging and positive sign.

As for next steps, various people have highlighted to me that we can encourage people to undertake audits, but what is important is what happens with the information on the back of that. In relation to future policy, we are thinking about continuing professional development and that extra element, so we hope to develop skills and help people take the next steps that need to be taken.

At the moment, it is not possible for me to say what areas we will be looking at, as that is something on which we will look to consult and engage. However, the sorts of activities that you have mentioned would not be permitted to be undertaken.