Chamber and committees

The Scottish Government recognises the challenges faced by our rural and island communities and works closely with stakeholders and partners to ensure that those challenges are addressed.

All relevant authorities listed in the Islands (Scotland) Act 2018 , must have regard to island communities in carrying out their functions. They must prepare an Island Communities Impact Assessment (ICIA) in relation to a policy, strategy or service, which is likely to have an effect on an island community, which is significantly different from its effect on other communities (including other island communities). The islands team supports colleagues from across the Scottish Government as well as relevant authorities in completing ICIAs. This includes offering island specific knowledge, published ICIA guidance , and providing links to key stakeholders.

As committed to in the Policy Prospectus, we are developing a Rural Delivery Plan, which will provide a platform to prioritise and progress existing work to seize opportunities and address the challenges faced by rural Scotland, as well as drive greater rural mainstreaming and reprioritise action to support our rural communities.

Where Scottish Government has the powers to do so, we have provided funding that responds to rural and island communities’ specific needs through, for example, the Islands Programme and our Community Led Local Development (CLLD) programme.

Over the period 2021-2026, the £25.8 million Islands Programme is providing targeted capital funding to support delivery of the National Islands Plan across a range of areas, including tourism, infrastructure, innovation, energy transition and skills. We have invested over £14.6m of CLLD funding in our rural communities following the end of the LEADER programme in December 2021.

There are many other, independent organisations which provide funding that may benefit rural and island communities. The terms and conditions applied to each open fund are clearly stipulated when a fund is announced. Scottish Government has no locus in setting these terms unless it is a fund which is being distributed on our behalf.

A table showing the number of social and affordable completions by local authority area can be accessed using the following link:

https://www.gov.scot/publications/affordable-housing-supply-programme-completions-updates/

The homes provided through the Affordable Housing Supply Programme comprise homes for social rent, for mid-market rent and for low cost home ownership. These homes take various forms including; new build homes, rehabilitation projects, conversions and off-the-shelf purchases of both new and second hand homes.

The following table shows the number of affordable homes delivered in remote, rural and island communities in 2021-22 and 2022-23:

The Scottish Government has put in place a range of incentives in the Highland area to support NHS dental provision. Specifically:

• Scottish Dental Access Initiative. These grants are available to applicants wishing to open a new or expand existing practice provision. Payments of up to £100,000 for the first surgery, and £25,000 for each subsequent surgery are available through this initiative.

The legal obligation to provide public library services within Scotland lies with the local authorities, who have a statutory duty to secure the provision of adequate library facilities for all people resident in their area, taking into account local needs.

The Scottish Government supports the Scottish Library and Information Council (SLIC), who provides leadership and advice to Scottish Ministers, local authorities, and the wider libraries sector, with annual funding of £665,000. This includes £450,000 for the Public Library Improvement Fund (PLIF) and is on top of the Scottish Government’s general revenue funding to local authorities.

Examples of PLIF support in rural communities includes Digi Bytes and Takeaways in Moray, which is enabling Moray Libraries to support families during the current cost-of-living crisis and encouraging children and parents to engage with STEM in the early years; and Sensory Exploration in Orkney, in which a mobile interactive floor projector allows for sensory sessions to take place with a variety of age-groups. The project aims to enhance the library’s digital offering and widen access to a technology designed to improve the mental and physical wellbeing of those interacting with it.

The New Scots Refugee Integration Delivery Project includes a workstream on research and evaluation. This entails working with New Scots partners and external evaluators to carry out project monitoring, research work and an evaluation of the New Scots Strategy 2018-2022. This evaluation report is due to be published in August 2023.

The New Scots refugee integration strategy has been developed and is led in partnership by the Scottish Government, COSLA and Scottish Refugee Council. The current strategy was published in 2018.

All partners have committed to refreshing the strategy and to ensuring that it continues to be shaped by refugees and people seeking asylum, as well as those with expertise supporting them. We are currently developing professional and lived experience engagement events, which will take place throughout Scotland this Autumn to inform the next iteration of the Strategy. Publication of the strategy itself will follow after these events have taken place to ensure the views of those the strategy seeks to serve are properly reflected.

Banking Hubs are a welcome industry initiative from UK Finance’s Cash Action Group. In October 2022 the Minister for Community Wealth and Public Finance visited the pilot Banking Hub in Cambuslang to see the positive impact it has had on the local area. The Scottish Government shares the industry’s aspiration that Banking Hubs can play an important role in servicing the banking needs of communities that have suffered recent branch closures.

The decision to open a new Banking Hub lies with the banking sector and is overseen by LINK, the UK’s cash machine network. The Scottish Government cannot mandate where and when a new Banking Hub is opened. Each time a bank branch closes LINK independently reviews the impact this will have on the local community’s cash access. Depending on the outcome of this review LINK can then recommend a Banking Hub is installed, amongst other additional services.

Scottish Government officials met with LINK in April 2023 to understand the process they follow when assessing a community’s cash access needs to ensure it is sufficient for LINK to properly determine the appropriate support measures required post branch closure in Scotland.

To improve a community’s access to cash and banking services any individual, including members of the public, elected officials, and community groups, can request a review of their areas access to cash from LINK - even if that community has not faced a recent branch closure. This can result in the installation of additional services in the area, including shared Banking Hubs .

Scottish Government officials meet bi-monthly with FCA officials to discuss a range of industry and regulatory issues. As part of these discussions the FCA have flagged the increased regulatory powers they will receive, through the Financial Services and Markets Bill, to act where they find impacts on consumers’ ability to access cash across the UK. The FCA have explained that the Bill provides a cash access framework within which they will seek to ensure the reasonable provision of cash withdrawal and deposit services in local areas where they anticipate potential deficiencies. The FCA have also said that, before they make any rules under these new powers, they will conduct a public consultation.

These new powers have only been granted to the FCA upon the passing of the Financial Services and Markets Bill which received Royal Assent on the 29 th of June. Until now, conversations between officials on this topic have centred around the progress of the Bill through the UK Parliament, as opposed to its implementation. Officials will continue to meet bi-monthly with the FCA and discuss with them how these new powers, and any new rules implemented post consultation, impact on cash and banking services in Scotland.

It has also been suggested that senior representatives from the FCA meet with me in the near future to discuss these increased regulatory powers. I am conscious of the importance of banking services to our communities, particularly in rural areas and our islands, and officials are working with the FCA on a suitable date for this meeting. I would be pleased to report progress to the Member once this has taken place.

The Scottish Government understands the importance of bank branches to rural communities in Scotland and recognises that when a local branch closes it can be difficult for those living in rural and highland communities to access their next nearest branch.

The regulation of financial services is reserved to the UK Government. As such, the Scottish Government cannot intervene on banks’ commercial decisions to change their branch network and so we have not conducted data analysis on what we would consider a necessary number of bank branches in a particular area. We are, however, aware of ONS data showing a 41% decline in Scottish bank branches since 2012 and the data the FCA reported in Q4 2021 that only 32.7% of the Scottish rural population live within 5km of their nearest branch.

We proactively engage with the banking sector following decisions they have made to close Scottish branches. Through these engagements we have reminded banks of their social responsibility and re-iterated the importance of in-person banking services for communities across Scotland. We welcome industry commitments made through the Access to Cash working group to ensure alternative services are available to mitigate the impact of branch closures. This includes “Banking Framework 3” which allows customers of 30 major UK banks to use the Post Office for their basic banking needs. We note that, when including Post Offices with bank branches, 78.4% of Scotland’s rural population live within 5km of the nearest branch.

We will continue to engage with the banking sector and encourage them to do all they can to ensure that appropriate support is provided so that our rural communities are not disproportionately disadvantaged by branch closures.