Chamber and committees

That comes back to some of the points that I raised previously on the replacement for the EU funding for marine. We are also facing a funding shortfall for agriculture. Again, we had been promised that those funds would be replaced in full, but that has yet to transpire. We have an allocation of £14 million for our marine industries when we should be able to expect to receive something in the region of £62 million, and there is also a £95 million shortfall in agriculture spend.

Obviously, if those funds were available to us, that targeted spend would help those industries. It would also help us towards a transition to net zero and would enhance the work that we are undertaking on climate change and enhancing biodiversity. It would help us to achieve all those aims. We continue to make representations on that to the UK Government, to ensure that it upholds its obligations and the promises that it made to replace those funds in full.

The interaction that I have had with my counterparts in the UK Government has related to the shortfalls that we have faced in the funding for agriculture and marine. I would have to check back to see whether that specific point on inflation has been raised, but I will be happy to come back and confirm that either way, unless officials have that information.

On your last point, about taking the same trajectory as England, you will be aware that we are taking a different road because we do not agree with the policy decisions that have been taken in England in relation to future agricultural support. That is why it is vital that we formulate our own policy in Scotland.

One of the key commitments in the SNP manifesto was about maintaining direct payments, and we have also committed to making half those payments conditional by 2025. That is very much the route that we want to go down, because we want to support active farming and food production as well as ensure that we tackle climate change and the biodiversity crisis that we face. That approach is quite different from the approach that has been taken in England, which has been met with quite a lot of concern from the agricultural sector.

That has been a source of frustration for us in the Scottish Government. Obviously, we welcome any additional funding. However, a key issue with the £100 million that has been allocated through the UK seafood fund is that it duplicates the funds that we already have. We have in place the marine fund Scotland, which replaces the previous EMFF. The £100 million fund from the UK Government looks to duplicate and replicate some of our funding through that.

Ultimately, that is direct spending on what is a devolved area. Given that we have our own priorities and that we work closely with our stakeholders and with industry in Scotland, we think that that resource should be given to the devolved Administrations, because we can best determine the priorities and how to spend the funds. However, unfortunately, the UK Government has decided to progress with its plans.

As you highlighted, there is an increase in the commission’s budget. As a result of the section 22 report on the commission, a programme of work is under way to make the necessary improvements. The commission has undertaken various pieces of work. One of the report’s recommendations was to undertake a workforce review, of which we are considering the implications, and to look closely at what the Crofting Commission needs to enable it to carry out its functions and deal with the backlog of cases that has emerged. The increase in funding is important to enable some of those changes to take place, to ensure that the Crofting Commission has the necessary resources to enable it to carry out its functions and to ensure that it deals with cases as effectively as it can.

As, I am sure, the committee is aware, I am happy to follow up with specifics and further information on the sustainable agricultural capital grant scheme that you are talking about.

A lot of what has transpired has been completely outwith our control or the control of anybody else who applied for specific pieces of equipment. Unfortunately, budgets have not been able to be fully utilised purely because people have not been able to get access to the equipment that the fund would enable them to buy. Again, those issues were entirely outwith our control and that is why, when we look specifically at the financial transactions for this year, we do not include them as part of the budget. There is no point in taking an allocation that we know that we will not be able to spend.

That is also why we did not open another round of the fund last year. If we had opened another round of the sustainable agricultural capital grant scheme, knowing that there were the same issues with the availability of equipment, it would have created more problems. In the allocations that we have made in this budget, we have tried to set out what we know we realistically can spend.

I hope that that is helpful, but if you would like more specific information on the capital grant scheme itself, I would be happy to provide the committee with more details, or perhaps James Muldoon would like to add something just now.

I am not too sure that I understand the question. We want to ensure—it is an obligation to ensure—that as we introduce new policy, we carry out island communities impact assessments. Those should be built into the process across Government as we look at any other areas. I do not know whether that answers your question.

Getting the biggest bang for our buck is exactly what we want to do with our spending, and we are identifying an amount that we know that we can spend and that we hope to spend over the course of the coming financial year.

On holding numbers, again, I would be happy to get back to the committee if you know of specific issues with people being unable to access the previous round of the grant scheme. We have been evaluating the scheme and, as part of our discussions with the implementation board, we are considering whether the fund can be better targeted and are looking to learn lessons from the pilot round that was run so that we can better spend the resource that we have allocated in the budget this year.

Brexit has undoubtedly had a huge impact across the portfolio, and has undoubtedly led to a lot of the issues that we are currently experiencing, whether in agriculture, fisheries or our food and drink industry. There has undoubtedly been a huge impact right across the portfolio when it comes to Brexit.

I come back to my response to Mercedes Villalba, because what you have described is not a straightforward assessment of how the budget works, in particular the lines that relate to AECS. The £36 million in the budget line for AECS this year is actually contract spend from previous years to which we had already committed. It also reflects the projects that have been funded through the 2021 round.

It is not possible for me to predict right now, given that we will be opening the 2022 round for applications this month, what the budget for the following year will be. The budget line therefore simply reflects previous contracts and financial commitments that we have made, so it is not quite accurate to portray it as a cut.

In addition, we had to run a more restricted round last year. We had an extension of contracts in 2020 purely because we were not getting the financial certainty from the UK Government to enable us to open another round. AECS contracts run for a period of five years, and without any financial commitment or certainty it was impossible for us, at that time, to reopen a full round.

I know that that was a huge cause of concern and frustration; I heard directly from a lot of farmers about that at the time. However, we were left with little option—or even no options—with regard to what we could do. It would have been irresponsible of us, over the past two years, to open full rounds for the future without having a bit more clarity. I hope that the announcement that has been made about reopening this year, and the commitment until 2024, provides clarity and an assurance that we are committed to continuing the programme.