Chamber and committees

No office has failed to deliver towards any of the strategic objectives. The progress made towards, or challenges against, achieving strategic objectives are best understood as cumulative.

Scotland’s international network comprises a broader range of partners who support our efforts across trade, investment and diplomacy. Colleagues both in Scotland and in our international offices across Scottish Government and Scottish Development International contribute together towards trade and investment measures for international sales and jobs.

The Scottish Government’s international network of offices deliver benefits to Scotland across all five strategic objectives. This is reflected in the annual monitoring and evaluation report submitted each financial year.

Monitoring and evaluation reports outline the work undertaken by each office to progress against each strategic objective; and to contribute towards ensuring they provide value for money. As part of this, offices highlight challenges as well as outlining potential and/or planned areas for improvement. In recent years this has included factors such as the COVID-19 pandemic and the negative impact Brexit continues to have on our economy, jobs and trade.

We recognise that there are areas where improvements can be made. The Constitution, Europe, External Affairs and Culture Committee’s report into the Scottish Government’s international work, published last year, highlights the challenges in measuring the impact of diplomacy and soft power, as well as quantifying areas through metrics and performance indicators as direct and immediate benefits.

This is an area where we are committed to a continuous cycle of improvement alongside ensuring our international work is measurable, transparent and available to the public. From this year, we will publish an annual report explaining how our international offices work to promote our values, objectives and priorities across the globe.

Details of progress made against each strategic objective are as follows:

Reputation

• The recently published Nation Brands Index (NBI) 2022 survey, which scores and ranks countries against six dimensions (culture, tourism, governance, immigration and investment, exports, and people) demonstrated that Scotland has achieved its highest ever reported score, jumping to 65.3 out of 100, compared to a score of 62.6 out of 100 in 2020.
• The work of the international offices in maintaining and promoting Scotland’s image abroad via facilitating collaborations, developing networks, and hosting officials and events is a key contributor to Scotland’s overall international reputation.

Trade & Investment

• The most recent monitoring and evaluation report of the offices demonstrated that cumulatively the forecast international sales within each location country as a result of SDI support totalled approximately £972,000,000 in 2021/22.
• Another source of evidence was the EY 2022 Attractiveness Survey which demonstrated that Scotland was the most successful national or region within the UK, outside London, in attracting foreign direct investment.

Research & Innovation

• Scottish education has a worldwide reputation for excellence in teaching and research and each of the international offices undertakes work to help facilitate and develop further research and innovation opportunities abroad.
• Recent examples include funding which was secured in Germany to facilitate a bilateral research collaboration in the fields of hydrogen, life sciences and biotechnology, as well as capacity building work around the Horizon Europe programme.
• In Brussels we have also worked to ensure Scotland is able to retain a role in European organisations which facilitate research, development and innovation collaboration such our membership of the Vanguard Initiative - a network of some 30 European regions.

Scotland’s Interests in the EU and Beyond

• Protecting and promoting Scotland’s interests in the EU and beyond is a key focus of Scotland’s international network. Our network comprises offices from the Scottish Government and Scottish Enterprise (SE) through the latter’s international trade and investment delivery arm, Scottish Development International (SDI). Collectively this network supports activity by the Scottish Government, its agencies and public and private sector partners, in strategic locations outside Scotland.
• A key feature of the international offices’ activities in this domain includes the work of the GlobalScot network, a worldwide network of entrepreneurial and inspirational business leaders, dedicated to supporting Scotland’s most ambitious companies. Within the most recent measurement and evaluation report for the offices it was demonstrated that the network continues to grow.
• The GlobalScot network now comprises 1200 individuals globally, of whom 545 are in Europe (January 2023). GlobalScots can be found in 68 countries and represent all key sectors.
• Trade and investment envoys are also a central part of Scotland’s international business network. They are ministerial appointed to promote international trade and investment interests, strengthen local market knowledge in the countries and sectors they represent and provide strategic business insight and connections. There are eleven trade and investment envoys working in a non-political capacity across specific markets and/or sectors.

For the period between the UK Withdrawal from the European Union (Continuity)(Scotland) Act 2021 coming into effect and 31 August 2021, information relating to the Scottish Government's use or considered use of the section 1(1) power of the Act is in the public domain and can be found at https://www.parliament.scot/-/media/files/committees/constitution-europe-external-affairs-and-culture-committee/correspondence/2022/eu-alignment--continuity-act--6-may.pdf

For the period 1 September 2021 - 31 August 2022 information is also in the public domain and can be found at https://www.parliament.scot/-/media/files/committees/constitution-europe-external-affairs-and-culture-committee/eu-continuity-act--draft-annual-report-for-laying--final--27-oct-2022.pdf

The Scottish Government has used the section 1(1) power in respect of The Public Water Supplies (Scotland) Amendment Regulations 2022, relating to drinking water standards. These amended the Public Water Supplies (Scotland) Regulations 2014 to implement partially Directive (EU) 2020/2184 on the quality of water intended for human consumption. The section 1(1) power has not been used in relation to food and livestock updates or digital content and services.

As we strive towards a lower carbon transport network and reduced environmental footprint, the wider re-use or recycling of waste materials within construction is of significant interest. Transport Scotland has investigated the potential use of waste products (including plastic) under a project funded by Scottish Road Research Board. The study provides a valuable contribution in exploring the re-use of waste derived materials within road construction and the evaluation of their overall benefits. The report, published in 2019, is available at the link below.https://www.transport.gov.scot/media/50949/briefing-report-recycled-materials-in-road-construction-and-maintenance.pdf

The report concluded that the case for waste-derived plastics to improve the performance of road materials is far from proven. There are also concerns around the quality control of mixed waste-derived plastics and this needs to be addressed to prevent variations in the material which can influence pavement performance.

The Scottish Government is a signatory of the Ellen MacArthur Foundation's New Plastics Economy global commitment to end plastic pollution and has introduced legislation to prevent the use of micro-beads and single-use plastic items. Transport Scotland continues to maintain a watching brief on this topic and any such proposals will continue to be subjected to technical review against the published national standards for the design and construction of trunk roads.

For the period between the UK Withdrawal from the European Union (Continuity)(Scotland) Act 2021 coming into effect and 31 August 2021, information relating to the Scottish Government's use or considered use of the section 1(1) power of the Act is in the public domain and can be found at https://www.parliament.scot/-/media/files/committees/constitution-europe-external-affairs-and-culture-committee/correspondence/2022/eu-alignment--continuity-act--6-may.pdf

For the period 1 September 2021 - 31 August 2022 information is also in the public domain and can be found at https://www.parliament.scot/-/media/files/committees/constitution-europe-external-affairs-and-culture-committee/eu-continuity-act--draft-annual-report-for-laying--final--27-oct-2022.pdf

Since the enactment of the UK Withdrawal from the European Union (Continuity) (Scotland) Act 2021, the Scottish Government has used the section 1(1) power to introduce secondary legislation once, in respect of The Public Water Supplies (Scotland) Amendment Regulations 2022. This legislation was subject to the affirmative procedure.

For the period between the UK Withdrawal from the European Union (Continuity)(Scotland) Act 2021 coming into effect and 31 August 2021, information relating to the Scottish Government's use or considered use of the section 1(1) power of the Act is in the public domain and can be found at https://www.parliament.scot/-/media/files/committees/constitution-europe-external-affairs-and-culture-committee/correspondence/2022/eu-alignment--continuity-act--6-may.pdf

For the period 1 September 2021 - 31 August 2022 information is also in the public domain and can be found at https://www.parliament.scot/-/media/files/committees/constitution-europe-external-affairs-and-culture-committee/eu-continuity-act--draft-annual-report-for-laying--final--27-oct-2022.pdf

The Scottish Government has not used the ‘keeping pace’ power in regards to primary legislation. The ‘keeping pace’ power in section 1(1) of the UK Withdrawal from the European Union (Continuity)(Scotland) Act 2021 is a power to make secondary legislation, therefore primary legislation would not be made under the ‘keeping pace’ power.

The following tables show the number of people from Scotland who have received elective or emergency treatment as an inpatient or day case in hospitals in other parts of the UK in each year since 2017.

Information is provided in the following table on the number of finished admission episodes for patients resident in Scotland who have received healthcare from the NHS in England since 2017.

Many remote and rural communities in Scotland are hugely impacted by wildfire incidents, which can also cause significant environmental and economic damage. This is something the Scottish Fire and Rescue Service (SFRS) is very aware of, and it works closely with key partners, including land managers and communities, to establish a common understanding of the risks, prevention measures and response procedures. SFRS has produced a wildfire strategy with partnership at its heart, that will ensure that personnel are equipped and trained to deal with these emergency risks and that the Service’s delivery model has sufficient resilience and flexibility to support wildfire incidents occurring over extended geographies and timescales – ensuring the right resources are in in the right place at the right time to fight wildfires. This not only provides a framework for wildfire response but also a strong platform for preventative work including a joined-up approach to land management including the use of Muirburn and prescribed burning, but also wildfire mitigation in planning stages for new forest plantations.

Climate change is identified as a strategic priority in the Scottish Government’s Fire and Rescue Framework for Scotland 2022. The Framework asks SFRS to continue to invest in the provision of specialist resources, technological advancements and forward thinking operational practices to enhance its response to wildfire incidents. It states that SFRS should continue to make use of local assets available to bolster its response during prolonged or widespread incidents such as wildfire.

We are already seeing warming here in Scotland, with more extreme weather events and rising sea levels. As a nation we must adapt to these changes and prepare for the impacts of global climate change which are already locked in. The Scottish Government is responding to the full range of climate risks identified for Scotland through its 2019 Adaptation Programme, which sets out more than 170 policies and proposals to build resilience to the impacts of global climate change as part of our Just Transition to net zero emissions by 2045. We are also preparing our next Programme, in response to the most recent UK Climate Change Risk Assessment, for publication in 2024.

The Cost of Living (Tenant Protection) (Scotland) Act 2022 is a response to the impact of the cost crisis on those living in the rented sector. The Scottish Government has made clear provisions in the Act must be expired or suspended if they are no longer considered necessary and proportionate in connection with the cost of living.

As set out in our first report to Parliament on the operation of the Act, the social sector rent cap expiry follows the development of an agreed approach on rent setting for 2023-24, taken forward on a voluntary basis, with social housing landlords. Social housing landlords are “not for profit” organisations and all rental income is used to support the delivery of housing and associated services for tenants. Under the Scottish Government’s Social Housing Charter, social landlords are required to set rents and service charges in consultation with their tenants so that a balance is struck between the level of services provided, the cost of the services and how far current and prospective tenants and service users can afford them.

The private rented sector has a high quantity and range of landlords, as well as a very different statutory regime governing its rent increase process. It was therefore not feasible to replicate the Task Group that formed in respect of the social rented sector, where all landlords could be effectively represented by membership bodies.

Whereas social sector rent setting practice involves rents being set annually and in consultation with tenants, with further rent increases typically not taking place either inter- or intra-tenancy, the latest data shows high levels of recent private sector rental growth.

The Scottish Government Private Rent Statistics (primarily based on advertised rents) show a 6.2% annual increase in average 2 bedroom monthly rents across Scotland in the year to end September 2022, while data from letting agents (which relates to new let rents only) show high growth: Rightmove reporting an annual increase of 13.0% and Citylets an increase of 8.3% in Q3 2022 in Scotland, and Zoopla reporting an increase of 11.4% for Scotland in October 2022.

In light of the updated economic analysis recently undertaken – and as set out in the recently published Statement of Reasons – the Scottish Government is of the view that it would be proportionate to raise the rent cap in the private rented sector to allow within-tenancy rent increases of up to 3%.

The voluntary approach to rent setting taken by landlords in the social sector is intended to equate to an approximate average rental increase of less than £5 a week (or less than £22 per month) across the country. As rents in the private rented sector are generally significantly higher than those in the social rented sector, allowing a maximum rent increase of 3% for rents in the private rented sector equates to a similar average rent increase for tenants in two-bedroom properties (the most common property size in the private rented sector). There will be variation around these averages, with higher increases for three-bedroom and four-bedroom properties and lower increases for one-bedroom properties.

The Scottish Government considers that this will give a measure of parity to landlords in the private and social sectors in monetary terms, while continuing to protect tenants from unaffordable rent increases during the cost crisis. The increase to the rent cap will mitigate against a disproportionate impact on private landlords who may also be experiencing increased costs due to the cost crisis, allowing them to maintain their properties and meet other expenses. We are also proposing that private landlords could, alternatively, opt to apply to Rent Service Scotland for a rent increase of up to 6% if they have had an increase in their defined, prescribed property costs within a specific period.

To respond to the emergency situation caused by the impact of the cost crisis on those living in the rented sector, the Cost of Living (Tenant Protection) (Scotland) Act 2022 introduced a temporary, variable rent cap, initially set at 0% and in place until 31 March 2023.

Our recently published first report to Parliament on the emergency Cost of Living Act, and Statement of Reasons , provided updated economic evidence demonstrating the continued pressure being placed on private rented households due to the ongoing cost crisis. In light of this, the Scottish Government have brought forward regulations to extend the rent cap for the private rented sector for a further six months, along with the moratorium on enforcing evictions – which will continue to apply across all sectors.

While the focus of the emergency measures continues to be on protecting tenants, the Scottish Government recognises that the ongoing impacts of the cost crisis may also be being experienced by some private landlords. Mortgage interest rates, which had been on an upward trend since the end of 2021, experienced a further sharp increase after the UK Government Growth Plan / Mini-budget on 23 September 2022. The average advertised five-year fixed rate rose from 4.75% on 23 September to 6.51% on 20 October, before falling to 5.95% on 22 November.

The Scottish Government is of the view that it would therefore be proportionate to raise the rent cap in the private rented sector to allow within-tenancy rent increases of up to 3% from 1 April.

The voluntary approach to rent setting taken by landlords in the social sector is intended to equate to an approximate average rental increase of less than £5 a week (or less than £22 per month) across the country. As rents in the private rented sector are generally significantly higher than those in the social rented sector, allowing a maximum rent increase of 3% for rents in the private rented sector equates to a similar average rent increase for tenants in two-bedroom properties (the most common property size in the private rented sector). There will be variation around these averages, with higher increases for three-bedroom and four-bedroom properties and lower increases for one-bedroom properties. The Scottish Government considers that this will give a measure of parity to landlords in the private and social sectors in monetary terms, while continuing to protect tenants from unaffordable rent increases during the cost crisis.

While there may be some households where even the modest rent increase allowed under the 3% cap causes an increase in financial hardship, we consider that the amended rent cap will ensure that rent increases are proportionate and therefore continue to protect households against high rent increases while the cost crisis is ongoing. The increase to the rent cap will mitigate against a disproportionate impact on private landlords who may also be experiencing increased costs due to the cost crisis, allowing them to maintain their properties and meet other expenses. We are also proposing that private landlords could, alternatively, opt to apply to Rent Service Scotland for a rent increase of up to 6% if they have had an increase in their defined, prescribed property costs within a specific period.

Scotland leads the way in the delivery of affordable housing across the UK, and we have committed to delivering 110,000 affordable homes by 2032, of which at least 70% will be available for social rent. Enabling continued investment in the delivery of high-quality social housing is therefore crucial. Social sector representatives have set out that the current cost crisis poses an enormous threat to this progress, with inflation rates having a far greater impact on the poorest 10% of the population, and living standards and real incomes expected to fall across the UK. The volatility of the economic environment also has significant consequences for housing associations, and the services they provide to tenants.

The Scottish Government has therefore been clear from the introduction of the Cost of Living (Tenant Protection) (Scotland) Act 2022 that we want to work with the social rented sector to seek an agreed way forward as an alternative to the continuation of the Act’s rent cap beyond March 2023.

The outcome of discussions led by COSLA, in respect of local authorities, and the Scottish Federation of Housing Associations (SFHA) and Glasgow and West of Scotland Forum of Housing Associations for Registered Social Landlords, has reached an agreed position with their members that would see increases of 6.4% and 6.1% respectively, as an average across Scotland.

The agreement of an average figure, rather than a fixed cap, is only possible due to the nature of the social rented sector and the opportunity to reach agreement with sector representative bodies. This approach has the advantage of allowing a degree of flexibility to recognise social landlords' priorities for investment such as new supply, refurbishment and services to tenants. We anticipate that the majority of rents will be increased at a level below the agreed 6.4% (for local authority landlords) and 6.1% (for registered social landlords) but there may be some social sector landlords who will, for specific reasons, go beyond these levels. This approach recognises that in some cases tenant feedback to the statutory rent consultations may be in favour of an increase higher than the overall averages agreed, for example to allow planned improvements or maintenance to proceed.

The Scottish Housing Regulator is monitoring and collating social sector rental data presently, and will report in due course.