beta

You're viewing our new website - find out more

Publication - Publication

A nation with ambition: the Government's Programme for Scotland 2017-2018

The Programme for Government 2017 to 2018 sets out the actions we will take in the forthcoming year.

124 page PDF

3.5MB

124 page PDF

3.5MB

Contents
A nation with ambition: the Government's Programme for Scotland 2017-2018
Chapter 1: A Future of Opportunity

124 page PDF

3.5MB

Chapter 1: A Future of Opportunity

A future‑proofed, high‑tech, low carbon economy

The current pace of technological change is unprecedented - it is transforming the way we work, conduct business, buy goods and communicate with one another. Businesses and governments across the world are investing in artificial intelligence, machine learning, data analytics and low carbon energy technologies that will revolutionise the global economy.

The opportunities for those that adapt and lead these changes are substantial. The value of the digital economy in Scotland was estimated to be £4.45 billion in 2014. Data driven innovation alone has the potential to deliver £20 billion of productivity benefits for our economy over the next five years. The prize is an innovative, growing economy which creates more and better jobs for everyone in Scotland.

But we know that to grasp these opportunities we must act quickly and with purpose or be left behind. We intend to seize the moment, and this Programme for Government sets out actions to make Scotland a country that will lead change and reap the economic rewards it will bring.

Our economic ambition

Our ambition is to build a modern, dynamic, open economy which benefits everyone in Scotland.

Scotland is already a global competitor in food and drink and in asset management. It is also Europe's energy capital. We are leading the way in sectors such as financial technology (FinTech), advanced manufacturing, life sciences and creative industries. We will continue to give support and investment to ensure these sectors reach their full growth potential.

These ambitious businesses are the employers of today, innovating for the future. We must do all we can to support them in providing the jobs of the future.

This Programme for Government is about backing businesses that want to innovate and grow. Whether they are in manufacturing, technology, retail, services - or indeed any of our key sectors - success will have common factors: the constant drive to innovate, to stay ahead of the competition and to deliver, and protect jobs.

We know how important skills are to businesses' growth plans. Many businesses identify digital and leadership skills as vital to innovation and growth. We also know that wider business investment is key to growth.

We will specifically support sectors that are already leading the way, but also create the digital infrastructure and the opportunities for ambitious businesses across all of Scotland to modernise, digitalise, innovate and grow.

The jobs of the future

Scotland is uniquely placed to lead the way on decarbonising our economy; our human, natural and research resources are hard to match. The economic benefits of our climate change ambitions are clear, but it is time to fully realise the economic potential of world-leading low carbon innovation.

We also have a head start in high-tech and digital spheres, where advanced manufacturing and digital and data solutions have the potential to revolutionise our industries and communities. It is vital that we provide the right infrastructure to support this - both through expanding and improving our high-speed broadband network and providing our people with the skills that they need to take advantage of it.

It is also why we must nurture and build entrepreneurialism within our economy, education system and society. For centuries, Scotland's inventions have changed the world - we now have the opportunity to shape this century, by matching the ambition and ingenuity of the famous innovators of our past.

To grasp these opportunities, we must also attract the best and brightest talent from outwith Scotland and make clear to the world that we are open for business. We need a business environment which promotes growth, investment and innovation. The proposals in this Chapter include:

  • a bold new ambition on ultra-low emission vehicles, including electric cars and vans, with a target to phase out the need for petrol and diesel vehicles by 2032, underpinned by a range of actions to expand the charging network, support innovative approaches and encourage the public sector to lead the way
  • establishing a new Strategic Board to co-ordinate the work of our enterprise and skills agencies and ensure maximum impact from our £2 billion investment each year in enterprise and skills
  • providing direct support for additional business research and development
  • establishing a National Investment Bank to support infrastructure investment, help companies grow and support our economic vision
  • establishing a new two-year competition for entrepreneurs, which will enable them to bring their ambitions to grow their businesses and create jobs to reality, with mentoring, networking and skills-sharing support from established entrepreneurs
  • investing billions of pounds in infrastructure, both traditional and digital, to ensure that all of Scotland's communities benefit from growth

Scotland's potential - the low carbon economy

The rapid increase in the availability of technology provides specific strategic opportunities for business to grow and for higher skilled, more rewarding jobs in the low carbon economy.

Investing in the low carbon economy - an opportunity as much as an obligation

There is increasing recognition of the wider economic and social benefits that come with the move to a low carbon economy, such as new jobs, improved air quality, and positive health outcomes. The low carbon economy now supports over 58,000 jobs in Scotland and generates over £10 billion in turnover. Recent analysis by the International Finance Corporation indicates that the 2015 UN Paris Agreement will help open up $23 trillion worth of opportunities between now and 2030.

Our proposals for a new Climate Change Bill to update Scotland's already pioneering climate targets in response to the Paris Agreement will send a clear, long‑term signal that this is the best place in the world to invest in low carbon business.

The 'Climate Change Plan' to be published in early 2018 will provide certainty to businesses and investors about how we plan to reduce emissions over the 2020s and early 2030s. The message is clear - this Government is determined to create a world-leading low carbon economy and we want business and investors to share our ambition.

We will establish a Just Transition Commission to advise Scottish Ministers on adjusting to a more resource-efficient and sustainable economic model in a fair way which will help to tackle inequality and poverty, and promote a fair and inclusive jobs market.

Leading the way on electric vehicles

We will take the lead in promoting the use of ultra-low emission vehicles ( ULEVs) and phase out the need for new petrol and diesel cars and vans by 2032, well ahead of the 2040 target recently announced by the UK Government.

To support this, we will:

  • expand our electric charging infrastructure between now and 2022, whether in rural, urban or domestic settings. Easy access to smart and rapid charge points will mean 'range anxiety' will be a thing of the past in Scotland
  • work with each of our delivery partners to create Scotland's first 'electric highway' on the A9, including charging points along the route, demonstrating that electric vehicles offer important advantages to motorists in rural, as well as urban, Scotland
  • accelerate the procurement of ULEVs in the public and private sectors, transforming public sector car and van fleets by the mid 2020s and commercial bus fleets by the early 2030s
  • introduce large scale pilots across the country, to encourage the private motorist to use ULEVs and remove barriers to their use
  • provide financial support for local solutions and small scale research and development to address the particular challenges to expanding the charging infrastructure in Scotland, such as charging in tenement properties, and capitalising on opportunities such as better linking electric vehicles with renewable energy and energy storage and systems in Scotland

We recognise that many of the key fiscal levers still rest with the UK Government and we note their 2040 commitment. We will ask them to play their part in meeting our ambitions by making full use of their reserved powers to help shape the market, including through vehicle standards and taxation.

The new Strategic Board for the enterprise and skills agencies will also be expected to work with our agencies to ensure that we are not simply a purchaser of these technologies, but innovators and producers as well.

Securing jobs, investment and carbon reduction

Transitioning to a resource efficient, low carbon and circular economy represents a massive opportunity for business and for jobs. To grasp these opportunities we will:

  • raise our ambitions and introduce a Climate Change Bill to increase our statutory 2050 target and make sure Scotland plays its full part in efforts to limit the global temperature increase to 1.5°C above pre-industrial levels
  • publish a final Energy Strategy by the end of 2017 that builds on Scotland's existing strengths and supports the development of a modern, integrated clean energy system, delivering reliable energy supplies at an affordable price in a market that treats all consumers fairly
  • include recommendations on a Government owned energy company in the Energy Strategy
  • establish an Innovation Fund to invest a further £60 million to deliver innovative low carbon energy infrastructure solutions across Scotland, such as electricity battery storage, sustainable heating systems and electric vehicle charging. This will build on the momentum generated by the European-supported Low Carbon Infrastructure Transition Programme and will benefit consumers, communities and businesses up and down the country
  • make our towns and cities more attractive places in which to invest and work - as well as protecting health - by introducing low emission zones in our four biggest cities by 2020 and into all other Air Quality Management Areas by 2023 where the National Low Emission Framework appraisals advocate such mitigation

We will also develop a deposit return scheme designed to increase recycling rates and reduce littering and implement it across Scotland. This represents a step change in our level of ambition and over the next year we will build on detailed work already being carried out by Zero Waste Scotland, ahead of roll-out across Scotland. We will ensure the scheme is tailored to meet Scotland's specific needs and we will work closely with the business community during its design and implementation. The question of whether this scheme should extend to small retailers - who have specific difficulties that would need to be overcome - will be addressed as part of this process.

We will also go further in our efforts to end the 'throw-away' culture, by examining how to reduce demand for single-use items, such as disposable coffee cups. We will appoint an expert panel to advise on the use of charges, similar to the successful plastic bag charge, with the goal of encouraging long-term and sustainable changes in consumer behaviour.

In the coming weeks, we will also set out our considered view and seek parliamentary approval on Scotland's approach to unconventional oil and gas extraction.

Creating Scotland's future - innovation and productivity

To truly grasp the opportunities of the future we must do more to promote entrepreneurial skills and culture in Scotland and to attract, nurture and retain the most innovative companies and individuals in Scotland.

Through our Innovation Action Plan, we are already building on the successes of Scotland CAN DO and are committed to ensuring that efforts of the Government and our agencies are aligned to provide the best possible support to entrepreneurs.

We have doubled the funding available to CivTech ®. CivTech has already provided the opportunity for entrepreneurs to use their digital innovations to create solutions to challenges faced by public services. It is an innovative and exciting way of using public sector spending power to create new business and improve people's lives.

But we can and must do more. The fantastic success of BrewDog, Skyscanner and FanDuel show us what is possible. Those companies provide jobs, investment and enjoyment to people in Scotland and all over the world.

To show our ambition and determination in this area, we will:

  • introduce the Unlocking Ambition Challenge. Each year, this scheme will support up to 40 of the most talented and ambitious entrepreneurs to bring their ideas to market and create jobs. It will be an international competition with candidates chosen by established entrepreneurs and supported by them. It will provide and support a cohort of Scottish innovators to potentially replicate the success of their mentors. Some will succeed, some will not, but each will be given every possible opportunity to succeed
  • increase current grant funding for business research and development by £15 million in each of the next three years

This increased investment in business research and development is part of our goal to double business research and development between 2015 and 2025. This is a stretching and ambitious target but Scotland's spend on business research and development is, and has consistently been, poor compared to other OECD countries. This is in stark contrast to our higher education research and development spend which compares well with other countries. That success is welcome and must continue but it also shows us that the talent and ability is there, we just need to harness it better.

The direct funding announced in this programme will help but will not achieve this growth alone. It is incumbent on all players in the economy to drive progress. For our agencies to play their part the new Strategic Board will be tasked with identifying and addressing specific barriers to research and development ( R&D) across all sectors, and sending a clear message to the world that Scotland is the place for investment in R&D. We will also seek opportunities to maximise the impact of our infrastructure investments and procurement on business R&D in areas such as electric vehicles, digital and mobile technologies.

As well as directly encouraging and stimulating innovation, we must create the conditions for businesses across Scotland to digitalise, modernise, innovate and grow. Adoption of existing technology such as superfast broadband, Wi-Fi and mobile internet can assist better business management, and create opportunities for employees to develop and apply their digital skills to enhance productivity. That is why creating the digital and connectivity infrastructure is vital to businesses across the economy.

Driving technological and digital innovation

New and existing technologies are transforming whole sectors of our economy. We want to harness this change for the good of all of Scotland, deliver a step-change in productivity and safeguard Scotland's reputation as a leader in innovation. We will do this by driving the proliferation of digital infrastructure for the good of all businesses and households and supporting the development of world-class tech-clusters in Scotland.

Enabling innovation - digital and connectivity infrastructure

As just one example, in 2015, 75% of internet users in Scotland reported that they used the internet to buy goods and services online in the past three months. Increasingly, much of this is done through mobile devices.

We cannot afford to wait for the UK Government to match our ambition, even though this is a reserved policy area. We will pursue the UK Government and Ofcom to implement changes to UK-wide policy and regulation which have the potential to improve broadband and mobile coverage in Scotland - and press for Scotland to get its fair share of UK funding and investment to enhance connectivity.

No matter their response, by 2021 we will ensure that Scotland is fully digitally connected. In the coming year, we will:

  • exceed our target of 95% of properties having access to fibre broadband
  • launch the first phase of procurement for 'Reaching 100%' (R100), our programme of investment to deliver 100% access to superfast broadband of 30Mbps to all homes and businesses by 2021
  • review our approach to enable more effective development of community broadband projects

We are also aiming to make Scotland the most attractive place in the UK to invest in telecoms. So we will:

  • deliver free Wi-Fi throughout major town and city centres across Scotland
  • unlock the potential of international fibre connectivity for new business opportunities, improved broadband performance and increased resilience by exploring opportunities to link Scotland to existing or new transatlantic fibre crossings
  • match the UK Government's rates relief on certain new fibre investment, subject to confirmation of the associated detail

Enhancing our telecoms connectivity benefits everyone and creates opportunities for businesses around mobile e‑commerce. Our ground‑breaking Mobile Action Plan, developed in collaboration with industry and launched in 2016, is the first of its kind in the UK. In 2017‑18, we will deliver transformative measures, including:

  • reforming planning measures to create favourable conditions for infrastructure investment
  • developing a programme to address 4G mobile coverage 'not spots' with delivery of initial phase activity in 2017-18
  • accelerating deployment of infrastructure, for example through delivering new rental guidance for mobile infrastructure, including small cells, on public buildings

We want more businesses to make better use of digital infrastructure and adopt digital technology. We will provide support for them to do this by investing an additional £1.7 million in 2017-18 to build on the highly successful and well-received first year of 'DigitalBoost' delivered through Business Gateway.

Digital Strategy

The refreshed digital strategy, 'Realising Scotland's Full Potential in a Digital World', emphasises the importance of business transformation through effective use of digital technology to ensure public services are designed around the needs of users and make sense to the people who need them most.

We assess all new or redesigned services to the Digital First Service Standard to ensure that all services are built in line with best practice and are aligned across the public sector. The Standard describes the minimum level required for digital public services and contains 22 criteria grouped around three themes - technology, business capability, and capacity and users. Compliance with the Digital First Service Standard is now mandatory for all central government bodies.

We are committed to ensuring all new public bodies are digital businesses who will deliver on these standards.

Financial technology (FinTech)

In 2017, Edinburgh was ranked 15th of 44 financial centres assessed by the Global FinTech Hubs Federation. Our goal is for Edinburgh to be ranked in the top 10 global FinTech centres by 2021.

We have been working with Scottish Financial Enterprise and its members to develop and deliver a shared FinTech Strategy to raise the global profile of Scotland's FinTech sector across Scotland.

We will now take that further by providing £250,000 over the next two years and leveraging further financial support from industry, to support a virtual FinTech hub and the establishment of FinTech Scotland, an industry-led body that will champion, nurture and grow Scotland's FinTech community.

Life sciences

The life sciences sector is critical to the competitiveness of Scotland's economy. This highly innovative sector currently employs over 37,000 people, and has turnover of £4.3 billion, with GVA at £2 billion.

The 2017 industry-led 'Life Sciences Strategy for Scotland' outlines the sector's priorities to grow the sector's turnover to £8 billion by 2025.

The Scottish Lifesciences Association works closely with the NHS to provide opportunities for Scottish companies to introduce new products and services to the NHS. The NHS will support implementation of the strategy and step up its engagement with industry and academia to build sustainable economic growth in Scotland.

The development of the precision medicine sector is vitally important to Scotland's future health. It will revolutionise health care, allowing specific treatments to be tailored to the individual characteristics of each patient. Scotland has outstanding strengths in this area and we will continue to build on these to assist the commercialisation of world-class research in precision medicine and genomics sequencing.

Advanced manufacturing

Our Manufacturing Action Plan has laid the foundations for Scotland becoming a world leader in advanced manufacturing. We have provided practical support and advice through the Scottish Manufacturing Advisory Service and taken decisive action to support jobs in Lanarkshire steelworks and the UK's last aluminium smelter in Lochaber. These actions are driving innovation and protecting jobs.

In 2017-18, we will:

  • directly support the £8.9 million Lightweight Manufacturing Centre in Renfrew. Working with the Advanced Forming Research Centre, this Centre will give Scottish companies a competitive edge in new manufacturing processes for lightweight materials such as titanium and carbon fibre, which increase efficiency and performance and help further reduce carbon emissions
  • confirm the location and academic and business partners for the National Manufacturing Institute for Scotland ( NMIS) this year and begin construction work onsite during 2018
  • launch a service to engage 200 manufacturing businesses each year to develop their own 'Manufacturing 4.0 Improvement Plan' so that manufacturing companies take advantage of new technologies and advance their integration with data and digital
  • provide £18 million support - from the Scottish Government and the European Regional Development Fund - through Zero Waste Scotland. This will help manufacturing businesses unlock the economic potential of the circular economy by maximising the value of the manufacturing process from beginning to end. This includes providing grants of between £20,000 and £1 million to SMEs through the Circular Economy Investment Fund

Sensor and imaging systems

Around 170 companies in Scotland are active in the market for sensor and imaging technology across a wide range of activities including aerospace, healthcare, agriculture and public services. These companies already employ 16,000 people and contribute £2.6 billion to the Scottish economy.

We have demonstrated our confidence in the sector through our investment in the Fraunhofer Centre for Applied Photonics and the Censis Innovation Centre. The Censis Centre supports Scottish businesses to develop their ideas and secure commercial opportunities by forging partnerships with universities and economic development agencies.

We will invest in a new and more supportive wireless sensor network. This national resource will transform the potential for businesses to explore sensor and imaging applications, to pilot their ideas and then launch proven, sustainable products and services into the global market.

Harnessing the resources and ingenuity of the oil and gas sector

In the last two years, the North Sea oil and gas industry has found new ways to innovate and to develop its expertise in order to deal with the downturn in the market. Harnessing the resources of the North Sea will be vital to the Scottish economy for decades and the expertise which the industry has brought to Scotland provides innovative, job creating opportunities for the north east of Scotland. We will continue to take steps to support the industry. To secure the many and varied opportunities it provides for Scotland we will:

  • continue to push the UK Government to:
    • bring forward immediate measures to improve exploration and attract fresh investment to provide support to the supply chain and workforce
    • ensure that issues relating to the tax treatment of late life assets are addressed as quickly as possible to allow assets to be in the right hands and contribute towards maximising economic recovery
    • provide support to the industry in its ambitions to increase the total economic value of the North Sea sector through export‑led growth
  • provide leadership on carbon capture and storage ( CCS). The UK Government's apparent withdrawal from CCS risks the North Sea's potential as the largest carbon storage resource in Europe. While continuing to press the UK Government to put in place the policy and financial framework to secure CCS investment in Scotland, we will provide early stage support of £100,000 to underpin the feasibility stage of the newly proposed Acorn Project at St Fergus in Aberdeenshire
  • support decommissioning work for older assets which are coming to the end of their economic life. We have already approved the first projects from our Decommissioning Challenge Fund but we will also invest in an Ultra-Deep Water Port to be established in Scotland. The North Sea has put £330 billion into the UK Treasury so we believe the UK's Ultra-Deep Water Port must be in Scotland. We will work with industry to build the case for this and seek cross-party support for the proposal. To show our commitment we will make available capital funding of £7.5 million and challenge the UK Government to commit funding as well
  • support the Oil and Gas Technology Centre

Tourism, innovation and our economy

Tourism is a vital part of the Scottish economy, employing 217,000 people and supporting a visitor spend of almost £9 billion a year. It showcases Scotland as a great place to live, work, study and invest in. Tourism continues to diversify and innovate - from the enormous success of the NC500 to the Dark Skies of Galloway. Much more can be achieved through further diversification, including not only traditional promotion and redevelopment, but also an increase in support for modernisation and digital innovation to help capture the potential within this vital sector.

In 2017‑18, we will build on previous success by:

  • developing with partners sustainable tourism action plans and a national food tourism action plan in key areas across the country, reflecting the further boost that will come from modernisation, innovation and promotion
  • improving digital capability across the tourism and hospitality sectors through the Digital Tourism Scotland programme and the Big 5 Questions project, which also supports better customer service and staff development, reduced costs and industry engagement
  • improving access to visitor information across Scotland by modernising key visitor information centres, developing partnership arrangements and improving digital and online information provision
  • launching an app, developed through our own CivTech ® programme, which provides in-car radio entertainment and tourist information for the A9 corridor - meaning that the A9 will soon be dualled, electric vehicle ready, and provide integrated tourist advice
  • promoting, through digital and traditional methods, the south of Scotland and Ayrshire as a tourism destination for coastal and forest tourism activities, with enhanced visitor experiences, development of walking opportunities and cycling routes, 7stanes mountain biking, the Galloway Dark Sky Park and South West Scotland Biosphere
  • progressing the redevelopment of Inverness Castle to deliver a quality visitor attraction that celebrates the spirit of the Highlands and provides a cultural hub of international significance by 2021

Our creative industries - a vital cultural and economic resource

We will strengthen and coordinate support for our film and television sector to drive its growth by creating a dedicated screen unit within Creative Scotland, to coordinate existing and new public sector investment and resources more effectively.

We will provide an additional £10 million of funding in 2018-19 to bring screen development, production and growth funding to £20 million next year. This is in addition to the existing £12.8 million commitment to BBC Alba/MG Alba.

As part of this work, we will support the world-renowned National Film and Television School with £475,000 to establish a new base in Scotland.

We will also maintain the investment in the Production Growth Fund. Since September 2015, £3.25 million has been made available to the Fund to incentivise productions to choose Scotland as a base. Creative Scotland figures show that the first £1.75 million awarded generated a spend of £17.5 million in the Scottish economy. We are also working with Scottish Enterprise, Creative Scotland and others to facilitate the creation of additional studio facilities.

Regeneration

Our approach to regeneration recognises the unique contribution that can be made by every part of Scotland.

During this Parliament, we will invest in regeneration activity including delivery of the Regeneration Capital Grant Fund ( RCGF) in partnership with local government. The RCGF has invested in over 90 projects across Scotland since 2014 and, in 2017-18, it is anticipated to support or create more than 2,000 jobs, refurbish and bring back into use a number of historic and landmark buildings, create more than 18,000 square metres of business space, support over 50 community facilities and services and bring long-standing vacant land and buildings back into use.

We will assist, through the SPRUCE infrastructure investment loan fund, the Vacant and Derelict Land Fund and sponsorship of the Clyde Gateway.

Creating the conditions for businesses to invest for the future and internationalise

To allow our businesses to seize opportunities, it is incumbent on us to provide the environment and conditions which will allow our businesses and people to innovate. This requires investment in our businesses, infrastructure and people and this Programme sets out how we match our ambition with our actions.

Helping the bottom line - nondomestic rates

We will continue to ensure that 100,000 businesses pay no rates at all through the Small Business Bonus Scheme.

We will, urgently take forward the Barclay Review and, as a priority, the recommendations to:

  • introduce a new relief for day nurseries to support childcare provision
  • move to three-yearly revaluations from 2022 with valuations based on market conditions on a date one year prior
  • support town centres by expanding Fresh Start relief
  • commission a separate review of plant and machinery valuations with particular focus on renewable energy sector valuations and statutory improvements to property including sprinkler systems

We will give urgent consideration to the remaining recommendations of the Barclay Review and will publish an implementation plan shortly.

Providing investment for growth

Our businesses and financial services sectors continue to invest in our economy and have a vital role to play in securing innovation and growth. We recognise, however, the potential catalyst the public sector's own investments can provide to the economy.

In last year's Programme, we announced plans to establish a new, £500 million Scottish Growth Scheme ( SGS) to support new and early-stage companies over the next three years.

In June, we announced the first tranche of the SGS which aims to stimulate over £200 million of investment to help businesses grow via the Scottish-European Growth Co-Investment Programme.

This year, we will make a further tranche of investment under the SGS, a £25 million expansion of the SME Holding Fund. Alongside additional private sector investment, we expect this to provide over £100 million to innovative, high-growth companies. The SGS is putting more money into the Scottish economy and will continue to do so over its three-year lifecycle.

It is time to go further and to provide a fuller investment vehicle to deliver our economic vision. The Council of Economic Advisers have set out the importance to Scotland's economic growth of supporting infrastructure development, providing finance for high growth businesses, and supporting strategic investments in innovation. They recognised the scale and scope of our investment and intervention in infrastructure and business development, but also identified national promotional banks as a cornerstone of a number of European countries' approaches to support the delivery of long-term investment to support economic development. They also recognised that there were presently barriers, including UK Government budgetary rules, which would need to be considered and overcome for such a bank to be internationally competitive and successful.

We will now develop a full implementation plan for a Scottish National Investment Bank, including its remit, governance, operating model and approach to the robust management of financial risk. We will discuss the implementation plan with Scottish Parliament's Finance Committee and UK Government to ensure that it has the full necessary support to allow the Bank to operate effectively.

£2 billion to realise our vision - enterprise and skills

One of the largest investments in the Scottish economy comes from our enterprise and skills agencies. While that investment has done much to ensure that inward investment is at record levels, unemployment is at record lows and exports continue to increase, we know there is more that can be done to get better outcomes from that investment.

The report covering Phase 2 of the Enterprise and Skills Review was published in June 2017 and outlines a wide range of key actions including the creation of a new enterprise agency for the south of Scotland to drive inclusive growth in that region. We will prepare legislation to establish the agency in 2018 and put in place interim arrangements later this year to ensure the south of Scotland benefits from a new approach that supports a diverse and resilient economy, sustains and grows communities, and capitalises on people and resources.

From October, the new Strategic Board for Enterprise and Skills will oversee the work of the enterprise and skills agencies (Scottish Enterprise, Highlands and Islands Enterprise, the new south of Scotland Agency, Skills Development Scotland and the Scottish Funding Council) and will improve the co-ordination of activities across the enterprise and skills agencies. As announced on 31 August, this Strategic Board will be chaired by Nora Senior, who will bring decades of experience and leadership in business to drive our ambition.

Part of the work of the Strategic Board will be ensuring that our agencies provide a first-class service to our businesses, entrepreneurs and people. But it will also ensure that we are getting the best possible return from our investment while making our economic vision a reality.

This Programme provides the strategic framework and priorities which we expect the Strategic Board and agencies to deliver. As we have made clear (and as evidenced by the creation of the new South of Scotland Agency), the detailed solutions which are appropriate for particular communities, businesses and individuals cannot always be set by government but this Programme provides an overarching set of ambitions which each agency can unite behind.

Promoting trade and investment

One of the key aims of our enterprise agencies is to boost Scotland's international profile and to build on recent successes in increasing exports; not least in the food and drink sector.

Exporters are amongst our most productive and innovative businesses and through 'Global Scotland', our Trade and Investment Strategy, we are creating the right environment to enable Scottish businesses to internationalise and boost Scotland's export performance and attract investment.

Since 2007, Scotland's international exports have increased by 41%. But more needs to be done to identify and exploit international market opportunities. This is particularly important in the context of Brexit.

The EU is Scotland's most important destination market for international exports. Membership of the European Single Market provides Scotland's firms with a market of over 500 million people, to which Scotland's businesses exported £12.3 billion in 2015 - 43% of our total international exports.

We want to ensure that as many businesses as possible are enabled to start exporting or to grow their exporting activity. Therefore, we will continue to do all we can to protect Scotland's interests in Europe during the UK's negotiations to leave the European Union. We are also doubling the number of people working for Scottish Development International ( SDI) in Europe.

To build resources in Scotland, we are establishing up to six pilots for local and regional export partnerships to provide business-to-business support in Scotland for small and medium enterprises that have limited experience of exporting. This complements our support to the Chambers of Commerce for building trading alliances with the international network of Chambers and for new business-led trade missions.

Our overseas footprint continues to develop. Innovation and Investment Hubs are now operational in London and Dublin, with our Berlin Hub opening this year. We are developing our existing presence in Brussels into a Hub and we will open a new Hub in Paris to maximise opportunities for Scotland in France, our third largest export market.

We have also established a Board of Trade and will appoint a network of Trade Envoys this autumn to champion and represent Scotland's export interests and strengthen our market intelligence capacity. We will maximise the trade and investment benefits of Expo 2020 in Dubai.

Scottish Enterprise will develop interactive online tools and services for companies seeking to export. These will be piloted by companies who have the potential to export but who are not currently doing so.

SDI helps businesses around the world invest in or trade with Scotland - in the year ahead its web presence within Scotland will be redeveloped to present key information tailored to the needs of users and aligned with other business support providers.

To complement this work, we will also:

  • deliver a partnership approach with Scotland's universities and colleges on internationalisation, building on the experience and success of Connected Scotland, which supports collaboration in the higher education sector to pursue international opportunities
  • develop and deliver a co-ordinated programme of local trade events across Scotland
  • continue with the work led by SDI and industry bodies to promote our food and drink around the globe, retaining and expanding, if possible, our in-market specialists

Inclusive and sustainable development in developing countries

We aim to improve Scotland's trade and investment performance and contribute to inclusive and sustainable development in developing countries, in support of 'Global Citizenship: Scotland's International Development Strategy'. We will do this by helping business play its part in promoting and respecting human rights; working with partner countries to support development through trade; and internationalising Scotland's world‑leading approach to social enterprise to help others realise the benefits of the social enterprise model.

International marketing

To ensure Scotland is viewed around the world as a country to visit, live, work, study and invest in, we will develop an international marketing campaign for Scotland which brings together all of our efforts, not least those of SDI and Visit Scotland. This interconnected campaign will form part of a broader drive to boost Scotland's exports, inward investment and population.

Creating the workforce of the future

Part of Scotland being a great place to do business is getting the most from our great people. Scotland has a highly skilled workforce, which is recognised internationally as one of our key economic strengths and an established driver of business growth and inward investment. Our labour market is performing strongly, with high levels of employment and unemployment at historically low levels.

In spite of this, there are still too many people who have low paid and insecure jobs and our drive to innovate must also be built on fair work and providing people with flexible skills.

We must also be mindful of automation and digitalisation replacing some work activities, and work to counter that by seizing the potential they have to enhance, de-risk and create new work activities. We cannot stop global forces, so we must focus on safeguarding and developing future jobs by preparing a workforce that can adapt and respond to global changes.

We know that businesses share our goal to build skills. The majority of Scottish businesses plan to grow by increasing the skills of their workforce: in the 2016 Small Business Survey Scotland, 61% of SMEs cite this is the primary means by which they want to grow their business. This Programme sets out how we aim to help them.

We invest around £100 million per year in apprenticeships, flexible workforce development and individual training accounts. Skills Development Scotland will continue to assess the current and future industry demand for skills, and our work on skills alignment will ensure that the system is closely aligned with evolving industry needs.

Digital Skills

We know that digital skills shortages are currently constraining business growth in Scotland. Only 37% of firms in 2014 were fully equipped in terms of having the skills to meet the digital technology needs of business (Digital Economy Business Survey 2014). In addition, 25% of firms within digital technologies and other sectors believe that 'recruiting people with the right technical skills or experience would be an issue for their business in the next 12 months and currently require more digital skills than are available' (Ekosgen Digital Technologies Survey 2016); this is one of the key constraints to inclusive growth in Scotland.

That is why this year, building on previous investments in digital skills, we announced the Digital Growth Fund, with £36 million available over three years from April 2018 to enhance the digital capabilities of our people and our businesses, through support for digital skills training. We will work with business to ensure this investment meets their needs. We will also continue to ensure the £12 million Training Transition Fund helps oil workers retrain in other sectors, including low carbon and renewables sectors.

City deals and regional economies

We will work with regional partnerships to make the most effective use of existing city deal investment to tackle labour market challenges and skills shortages. City region deals act as enablers to drive inclusive economic growth. The deals enhance alignment between national, regional and local ambitions, strategies and resources and they enhance partnerships focused on long-term strategic approaches to improving regional economies. We have committed over £1 billion over the next 10-20 years for city region deals for Glasgow, Aberdeen, Inverness and Edinburgh and South East Scotland. Next we will seek to secure deals for Stirling and Clackmannanshire; the Tay Cities; and deliver a regional deal for Ayrshire.

We will also use European Structural Funds to help tackle regional inequality by focusing funding on post-industrial areas of Scotland. Looking carefully at skills gaps which exist in those communities, we will focus our efforts on filling those and encouraging inward investment. An additional £12 million of European funding will be invested in this work to develop the skills needed for new and emerging industries and markets.

Youth employment

We welcome our progress towards the target to reduce youth unemployment by 40% by 2021, with the youth unemployment rate now one of the lowest in Europe.

We continue to implement the Developing the Young Workforce (DYW) strategy and the network of regional industry-led Developing the Young Workforce Regional Groups is now complete. This harnesses the skills of engaged industry leaders to drive the delivery of cultural change in the relationship between employers and education. We have signalled our intention to provide funding to those groups through to 2021 and this is further evidence of our long-term commitment to deliver the DYW Programme. In the coming year those groups will increase the focus on how we support young people who face particular challenges in moving into work.

Flexible Workforce Development Fund

The UK Government's introduction of the Apprenticeship Levy has fundamentally altered the way in which skills training is funded. We are committed to working with businesses in Scotland affected by the levy to ensure they continue to invest in the development of their workforces. We will develop new approaches which are flexible and responsive to the needs of those businesses as we pilot a new workforce development fund, which will launch later this year. This £10 million investment will help employers to increase productivity and address skills gaps by supporting in-work training of their workforce. The fund will be delivered through colleges and bring the sector closer to industry.

Drawing on the lessons from the first year pilot, we will develop a proposal for an extension of the Flexible Workforce Development Fund ( FWDF) in 2018-19. The priorities for the FWDF will be developed in line with emerging future skills priorities identified by the new Strategic Board.

Employability services and supporting disabled people into work

From April 2018, we will exercise one of the first powers devolved under the Scotland Act 2016 to deliver our new employment support service Fair Start Scotland. It will provide tailored, person-centred support to a minimum of 38,000 people who are furthest removed from the labour market. Building on this we will work with partners in UK and local government to ensure our pre-employment programmes and the structures that deliver them meet the needs of those who face the greatest barriers to work. We will align this work with that of the Developing the Young Workforce Regional Groups to create streamlined routes for our most vulnerable young people to get back into work.

We will also reduce barriers to employment for disabled people and seek to reduce, by at least half, the employment gap between disabled people and the rest of the working age population.

Twenty per cent of the population is disabled, but disabled people make up only 11% of the private sector workforce and 11.7% of the public sector workforce. We will consult disabled people's organisations and public sector bodies on setting targets to redress this imbalance.

In Fair Start Scotland, we have reserved one of the nine contract areas for bids from supported businesses whose primary aim is the social and professional integration of disabled or disadvantaged persons and where at least 30% of the employees are disabled or from poorer backgrounds. Additionally, as part of the overall procurement exercise, we have encouraged potential service providers in the other eight contract areas to consider how they can work with supported businesses across Scotland.

We will also:

  • pilot a work experience scheme for young disabled people aimed at improving the transition into permanent employment and removing barriers to finding employment
  • deliver a disability internship programme, providing disabled people with 120 employment opportunities in the third and public sectors and in politics, over the period 2017 to 2021
  • deliver a two year NHS internship programme for disabled graduates in partnership with NHS Scotland and the Glasgow Centre for Inclusive Living Equality Academy from 2016 to 2018
  • hold a major congress on disability, employment and the workplace and engage with partners, employers, the Scottish Trades Union Congress and disabled people's organisations during 2017 in shaping its focus

Support for veterans

We remain committed to ensuring that no member of the armed forces and veterans community in Scotland faces disadvantage when accessing services and support. We will continue to support veterans through responding to the recommendations of the Scottish Veterans Commissioner and through the Scottish Veterans Fund, with our multi-year commitment of £360,000 in place until 2019-20. In 2017-18, for the first time, the Scottish Veterans Fund includes a dedicated strand of funding provided by Standard Life, which will focus on employment for veterans. This brings the total committed through the Fund to £600,000 over three years to 2019-20.

Migration

Inward migration is vital to meeting Scotland's economic, demographic and cultural needs. Population growth is the biggest driver of economic growth in Scotland today and migration is essential for the sustainability of Scotland's population growth.

The UK's one‑size‑fits‑all approach to immigration is no longer sustainable. We have repeatedly set out our position that the UK Government's existing immigration policies don't work for Scotland. We will continue to work to address the negative rhetoric around migration.

While migration is currently reserved, we made clear in 'Scotland's Place in Europe' that our preference is for autonomy in Scotland on immigration powers and for Scotland to continue to benefit from free movement within the single market.

In the next year, we will seek to build consensus around the need for Scotland to have migration powers. We will also work with partners to attract more people to live and work in Scotland and to ensure migrants to Scotland are able to remain. We will continue to push the UK Government to deliver flexibilities within the current system as a matter of urgency including setting out new skilled jobs required in Scotland through the occupation shortage list and the reinstatement of a post-study work route.

Consumers

By the end of 2017, we will publish a consultation on how best to deliver the optimal approach to consumer protection and competition in Scotland so that real benefits can be delivered to consumers and businesses.

Scotland's travel and transport system - cleaner, greener and healthier

While we will increase our focus on the opportunities that technological change is delivering, we will also continue to deliver improvements in traditional infrastructure that deliver real economic benefits and improved connectivity.

We will also commence work for the second Strategic Transport Projects Review in the Dumfries and Galloway area. This will include looking at the access to the ports at Cairnryan.

We are investing more than £1 billion annually in public transport and other sustainable transport options to encourage people to use an alternative to their cars while delivering the largest transport investment programme that Scotland has ever seen.

Active travel

We will build an Active Nation, boosting investment in walking and cycling and putting active travel at the heart of our transport planning. Our actions will include:

  • making our towns and cities friendlier and safer spaces for pedestrians and cyclists by increasing investment that supports active travel from £40 million to £80 million per year from 2018-19
  • appointing an Active Nation Commissioner to ensure delivery of world-class active travel infrastructure across Scotland
  • stepping up promotion of the use of electric bicycles to ensure as many people as possible can benefit from active travel
  • delivering projects which help older people benefit from our network of walking and cycling routes

We will work towards delivering a long distance walking and cycling route, offering an experience equivalent to the successful North Coast 500 and continue our investment for walkers, cyclists and equestrians on the A9 corridor, including 35 km of new cycle track to connect the A9 route with the wider National Cycle Network.

Air quality and low emission zones

Air pollution impacts on human health and particularly affects vulnerable groups such as the very young and old, and it exacerbates respiratory and cardiovascular conditions. This has long-term impacts on individuals' wellbeing and on their participation in the labour market and economy. We will take forward our 'Cleaner Air for Scotland' plan to tackle air pollution and ensure that levels are below stringent legal requirements.

With local authorities, we will introduce Low Emission Zones ( LEZs) into our four biggest cities between 2018 and 2020 and into all other Air Quality Management Areas by 2023 where the National Low Emission Framework ( NLEF) appraisals advocate such mitigation. We will also establish an Air Quality Fund to support local authorities with Air Quality Management Areas to deliver transport-based mitigation as identified by the NLEF. We will work with the commercial and bus sectors, the Energy Saving Trust and the Low Carbon Vehicle Partnership to establish an Engine Retrofitting Centre in Scotland to support the delivery of LEZs, creating new jobs and with the goal of winning business from outwith Scotland.

Roads

We have just seen the Queensferry Crossing open to the public and earlier in the summer the opening of the upgrade to the M8, M73 and M74 motorways. We continue to deliver the Aberdeen Western Peripheral Route and progress the dualling of the A9, underlining our commitment to major infrastructure across Scotland.

This year, we will also focus on maintaining the trunk road network in line with international best practice.

This approach will help to sustain the economic health of our nation and meet the expectations of the travelling public. We will invest in further essential road maintenance schemes, our bridge strengthening programme and ancillary assets and increase the resilience of the network to unplanned events such as flooding and high winds. The Transport Bill will contain provisions on obstructive and inconsiderate parking. It will also enhance and improve the role of the Scottish Road Works Commissioner and the wider regulation of road works.

Smart ticketing

We are continuing with our programme to allow all journeys on Scotland's bus, rail, ferry, subway and tram networks to be made using some form of smart ticketing or payment. The entire ScotRail network is smart-ready and ScotRail continues to develop and deliver smart ticketing products in line with their franchise commitments. The five largest bus operators, covering 74% of journeys, have already introduced multi-operator smart ticketing in the city regions of Aberdeen and Dundee, with Glasgow (late 2017) and Edinburgh (early 2018) to follow.

Transport Scotland will continue its work to deliver a national 'e-purse' system for use on saltirecards allowing cash free travel on public transport across Scotland.

Buses

The Transport Bill will provide local transport authorities with improved options to influence the provision of bus services in their area to better meet local users' needs, through partnerships with operators, franchising, or running their own services.

The National Concessionary Travel Scheme provides great benefits and we will continue to provide free bus travel to those who need it most while ensuring the scheme is sustainable in the longer term. We will pilot free bus travel for Modern Apprentices.

Rail

We continue to demand the level of service which customers expect from ScotRail and, while the improvements we have seen this year are welcome, there is more to do. A key to improvement is realising the investments that we are working with ScotRail and Network Rail to deliver.

We are seeing many of our major projects come to fruition in 2017‑18. Some highlights include:

  • the Edinburgh to Glasgow via Falkirk High route being served by electric trains in the coming months and adding 26% more seats at peak times
  • Dundee Station redevelopment being completed by early 2018
  • refurbished high speed trains being introduced into service by ScotRail between the seven Scottish cities from spring 2018
  • 75 new sleeper coaches being gradually introduced on overnight services to and from London from April 2018 onwards

We will go further by developing new proposals to continue the reinvigoration of the Scottish rail network and will take forward work on:

  • our investment strategy for new track and stations for 2019 onwards
  • introducing hybrid electric trains
  • further tackling overcrowding
  • introducing dedicated carriages for cycles and other outdoor sports equipment on rural routes in the north and west
  • maximising the local benefits of the route between Girvan and Stranraer
  • service improvements for the line between Inverness and Wick/Thurso

We fundamentally believe, however, that we could do much more if we had stronger levers over the rail network. The rail network in Scotland is already publicly owned - by the UK Government. In the coming year, we will continue to press for the further devolution of Network Rail in Scotland so that it becomes fully accountable to the Scottish people. We will also make full use of new powers provided through the Scotland Act to allow public sector bodies to bid for future Scottish rail franchises.

In 2017-18, we will identify a suitable public body to make a robust bid for the next ScotRail franchise contract and confirm the next steps for the preparation of a bid.

Ferries

In 2017-18, we will continue to maximise the socio-economic development of Scotland's remote and island communities through our support of ferry services. Recent enhancements have supported a major uplift in the numbers travelling by ferry. While that growth in travel provides a welcome boost for the island tourism sector it does present a number of challenges in dealing with increased demand. In response to these challenges, we will continue with a number of initiatives to further enhance and improve Scotland's ferry services, including:

  • applying road equivalent tariff fares to all routes in the Clyde and Hebrides Ferry Services network throughout the year
  • reducing passenger and car ferry fares to Orkney and Shetland in the first half of 2018
  • supporting the town centre to town centre Gourock - Dunoon ferry service
  • reviewing ferry services procurement policy and subsequently putting in place arrangements for the long-term delivery of our supported services
  • continuing work on the Colintraive and Rhubodach slipways
  • building two new major vessels for the Calmac Network, the first of which will be launched during the year

Air Travel

To ensure that air services continue to be more affordable for remote communities in the Highlands and Islands, facilitating accessibility, social inclusion and economic development, we will maintain the existing Air Discount Scheme in 2017-18 at 50%.

The Air Departure Tax (Scotland) Act provides for Air Departure Tax ( ADT), which will replace UK Air Passenger Duty ( APD) in Scotland. Revenue Scotland will be responsible for collecting and managing the tax.

Tax bands and tax rate amounts for ADT will be brought forward through secondary legislation. We are committed to reducing the overall burden of ADT by 50%, abolishing the tax altogether when resources allow and seeking a fair deal for the Highlands and Islands, where an exemption from APD currently applies.

Rural economy: preparing for the future

Rural Scotland is home to one fifth of Scotland's population and 51,000 registered small and medium-sized enterprises. Our food and drink sector is a global success - it has rapidly grown its export markets and demonstrated the innovation and ambition we need to replicate across the economy. But rurality, remoteness and depopulation, in particular, present significant challenges.

Increasing digital connectivity and technological advances, which allow us to better harness our natural resources, hold enormous potential for our rural communities. With geographical barriers becoming less important, we must support our rural areas to secure vibrant communities, deliver big ideas and drive economic growth.

In preparing for the future, our focus in the coming year will be on four key areas:

  • enabling and encouraging sustainable development, enterprise and investment through a joined‑up approach across government including local government and national agencies
  • developing a strategic approach on environmental policy in Scotland to protect and enhance our environment, safeguard our natural capital and continue Scotland's leading role on addressing environmental challenges
  • harnessing the potential of our natural assets and protecting our natural resources
  • repopulating and empowering Scotland's rural, coastal and island communities

Preparing for the future

So much of our rural economy will be impacted by the outcome of the UK's negotiations on leaving the EU. We will fight for the best deal for our rural, coastal and island communities and do all we can to protect Scotland's interests during this period, whether that be in relation to our important rural industries, environment, communities or housing or any other issue important to the rural economy.

To do so, we must fully understand all the implications of Brexit for rural Scotland and develop policy and principles for future rural support based on the best available advice, research and expertise. We have established a National Council of Rural Advisers to lead this work. It will provide an interim report in November on Brexit implications and recommendations on policy and principles for future rural support in late spring 2018.

We will also:

  • encourage stakeholders to submit their views to UK Government working groups so that Scotland's voice is heard and our particular circumstances and experience inform their policy development
  • expect and press for all currently devolved powers over agriculture, animal health and welfare, fishing and rural and environmental policy to transfer to Scotland
  • collaborate where appropriate to develop UK‑wide approaches on relevant issues
  • continue to press for a fair share of available UK funding - across all schemes - to be maintained in the future, and for the power to determine how to invest it
  • engage with the UK Government and other devolved administrations on the former's proposals for the future

Enabling and encouraging enterprise and investment through a joinedup approach

We want to ensure that rural sectors and businesses have opportunities to expand, collaborate and innovate.

EU funding, including the Scottish Rural Development Programme ( SRDP) 2014-2020, will continue and will be invested in enterprise, protecting and improving the natural environment, and empowering rural, coastal and island communities. We will also plan a new unitary fund to invest in rural, marine and coastal enterprise as part of dealing with Brexit. The fund will ensure that future investments in the rural economy are aligned to business needs, key sectors and government priorities for sustainable and inclusive growth.

We will continue to seek repatriation of the EU's full CAP convergence funds of £190 million. Should we succeed, we will increase the CAP payment rate to active hill and upland farmers and crofters. We will also press for full devolution of the fish levy to generate additional revenue of £2 million to promote and market Scotland's quality fish and seafood. We will seek the full repatriation of the £1.5 million of red meat levy that Scotland loses through livestock that is slaughtered outwith Scotland.

Beyond the issue of EU funding, Brexit risks inflicting serious economic damage to rural jobs and businesses. In many sectors of vital importance to the rural economy, it is already clear that some businesses will struggle to operate without access to EU workers.

We will continue to argue vociferously against the damage posed by leaving the single market. However, we will also take action to help those most at risk, not least our farmers, our hill farmers and our crofters. We will seek to empower our farmers and crofters to use their land for new sustainable developments, including housing. As part of this, we will examine how, across the rural economy, we can use the planning and consents systems to fast-track sustainable developments - including housing - in order to generate new rural economic activity.

We will work with others, including the private sector, to attract further investment to rural Scotland by:

  • assessing the potential for the use of financial instruments to support rural businesses
  • exploring the use of loans to enable farmers, crofters and land managers to undertake projects and activity which maintains or improves the sustainability and productivity of their businesses and land
  • seeking opportunities for public sector pension funds to invest in woodland and forest creation
  • exploring how place-based collective endowments could be used to revitalise local, and particularly remote, communities
  • facilitating partnership between the private and public sectors, for example, by working with local authorities and the Scottish Minerals Restoration Trust to pursue sustainable development options for restored open cast mines

Maintaining critical infrastructure will be essential in helping farm businesses become more efficient and sustainable as they increasingly add value to their products to maximise their economic impact and make the most of our natural assets.

As a key milestone towards a Scottish rural infrastructure plan, we will trial collaborative working between public agencies and the private sector to progress key economic development projects in the south of Scotland.

Supporting manufacturing in the West Highlands

In November 2016, Rio Tinto Alcan sold the last remaining aluminium smelter in the UK at Fort William, two hydro-electric facilities and estate land to the GFG Alliance. We underwrote this transaction as part of a clear commitment to Scotland's industrial infrastructure and rural economy and to inclusive and sustainable growth in the West Highlands.

Lochaber now has a once in a lifetime economic opportunity to revitalise the smelter and associated hydro schemes, to construct state‑of‑the‑art facilities to manufacture automotive products and to develop and enhance the extensive estate lands. This could lead to the creation of several hundred direct jobs and many more jobs in the supply chain. The investment is predicted to add around £1 billion to the local economy over the next decade.

We are working with Highlands and Islands Enterprise, Highland Council and local community stakeholders through the Lochaber Delivery Group to co‑ordinate support for GFG Alliance's industrial vision for the Lochaber assets, including development of infrastructure and housing.

We remain committed to supporting potential for community ownership of appropriate parts of the estate to help create stronger, more resilient and more independent communities.

In the Enterprise and Skills Review, we recognised the unique challenges facing the south of Scotland. In 2017-18, we will take forward delivery of the Review's recommendations to support community resilience and business growth. This will include:

  • preparing legislation to create a new enterprise agency for the south of Scotland to lead transformational inclusive growth, increase competitiveness and tackle inequality
  • introducing interim arrangements by the end of this year to ensure that the south of Scotland begins to benefit from a new approach
  • promoting the south of Scotland and Ayrshire as a tourism destination
  • investing in measures in the Tweed Valley action plan in the Borders and developing a similar action plan for Dumfries and Galloway

Harnessing the potential of our natural assets and protecting our natural resources

Scotland's natural capital is fundamental to our success as a nation and is the essence of Scotland's global brand. Continued growth depends on sustainably harnessing the potential of our natural assets - our land and seas in particular.

Environmental protection is one of the areas which will be most affected by the UK's decision to leave the EU: 80% of our environmental legislation originates from Europe. So, as part of our work to analyse scenarios on the future relationship between Scotland and the EU, we will develop a strategic approach on environmental policy in Scotland that will safeguard our natural capital and continue Scotland's leading role in addressing environmental challenges.

Supporting our food and drink industry

Our food and drink sector is a major contributor to Scotland's economy. The new industry-led Food and Drink Strategy - 'Ambition 2030' - published in March, set the aim of doubling the value of the industry to £30 billion by 2030. We will:

  • focus support on growth markets across the UK for food and drink sourced or produced in Scotland
  • build the service and supply chain to promote farmed fish and seafood to international and domestic markets
  • work with producers and businesses to publish sector specific action plans
  • consult on proposals for the Good Food Nation Bill and appoint a National Chef to promote Scotland's produce and the associated health benefits

We want to develop demand for locally‑sourced and produced food and drink here in Scotland. Doing so in public sector settings is key, so we will:

  • conclude the review of school food regulations and implement changes to reflect the revised scientific advice on nutrition
  • invest in a new targeted supplier development programme to enable more food and drink suppliers to compete for public sector contracts
  • facilitate attendance of public sector buyers and catering managers at 'Showcasing Scotland 2017'
  • invest more in the 'Food for Life' programme to get all 32 local authorities achieving its Catering Mark in their schools

A sustainable and productive farming sector underpins our food and drink success. In 2017‑18, we will:

  • take forward recommendations from each of our four Agriculture Champions
  • maintain direct support for farmers and crofters at current levels, put the CAP payment system on a secure footing and complete full digitisation of the application process for payments
  • continue the Less Favourable Area Scheme in 2018 to support farming in our most fragile and remote areas, in line with EU rules
  • expand the sheep and trees initiative and encourage more woodland creation on farms and crofts
  • transpose the EU amending Directive that provides Scotland with the powers to opt-out of cultivating future EU approved genetically modified crops
  • complete the ScotEID livestock database and support a cattle electronic identification pilot; deliver legislation to eradicate bovine viral diarrhoea and work with Livestock Health Scotland to identify the next target livestock diseases

A sustainable marine sector

Scotland has one of the world's richest marine environments. We will continue to support clean, healthy, safe, productive and biologically diverse seas and coasts and the sustainable growth of key industries, including aquaculture, sea fisheries and seafood. In the coming year, we will:

  • develop a strategic health framework to support the aquaculture sector's 2030 sustainable growth ambitions
  • develop policy which consolidates sustainable fishing in Scottish waters and support a thriving Scottish fishing industry, onshore and offshore
  • continue to press the UK Government to implement a new UK Fisheries Concordat
  • establish a Scottish Advisory Committee to guide the Seafish Industry Authority

Protecting our marine environment

The seas around Scotland are a national asset that must be protected and cherished. In the year ahead, we will:

  • consult on refreshing the National Marine Plan and improve the protection given to Priority Marine Features outside Marine Protected Areas
  • create a research programme on blue carbon and evaluate options to create a deep sea national marine reserve
  • develop a dolphin and porpoise conservation strategy to maintain the species in favourable conservation status
  • host an international conference to discuss improving our marine environment and protecting our wildlife, focusing on marine plastics
  • commit £500,000 to begin to address litter sinks around the coast and to develop policy to address marine plastics, which will involve working with community groups

Scotland: a hydro nation

We are proud that Scotland's water industry remains in public ownership and our reputation as a Hydro Nation is growing. In the coming year, we will:

  • provide £210 million to support Scottish Water's £3.6 billion capital investment programme to meet EU Directives and provide new connections and network capacity
  • grow Scotland's water economy through Scottish Water International consultancy, the Hydro Nation innovation service and test facilities, world-class research, overseas development aid and working with Scottish Development International

A growing forestry industry

Scotland's forests and woodlands provide around £1 billion in GVA annually to the economy, support around 25,000 jobs and contribute to our climate change targets. To meet the current annual target of creating 10,000 hectares of woodland, tree planting must become a shared national endeavour. We will:

  • complete the devolution of forestry and establish a modern framework for forestry in Scotland through the Forestry and Land Management Bill
  • implement the Mackinnon report in full, including streamlining the approval process for good quality planting applications
  • increase the budget for woodland creation by £4 million in 2017-18 and work with timber users to develop, promote and facilitate the use of home-grown Scottish wood
  • support the development of partnerships involving communities, public and private sector investors to plant more trees and create more woodlands
  • evaluate current practice around reinstatement of trees removed during development of infrastructure
  • work with a refreshed Forest and Timber Technologies Industry Leadership Group to develop a long-term action plan to identify and exploit strategic opportunities for economic growth in the sector

On Scotland's National Forest Estate, Forest Enterprise Scotland will:

  • restore a further 500 hectares of ancient woodland
  • as part of the New Woodland Investment Programme, establish 650 hectares of new woodland
  • sustain the Estate's timber production potential by replanting after felling, predominantly with productive conifers
  • identify and develop innovative partnerships to increase leisure and recreational activity

Forest Enterprise Scotland will work with partners to identify areas of vacant and derelict land for the New Woodland Investment Programme. It will continue to involve local communities in managing the National Forest Estate. In 2017-18, we will seek to transfer a further 700 acres of forest to community ownership.

Scotland's National Forest Estate, Forest Enterprise Scotland and Forest Holidays - a perfect partnership

Tourism and recreation on our National Forest Estate contributes £110 million each year to the Scottish economy and supports 3,800 jobs. Forest Holidays, a joint venture including Forest Enterprise Scotland, has developed luxury cabins at Strathyre and Ardgartan in the Loch Lomond and the Trossachs National Park. A further inward investment of £10 million is planned for the Tweed Valley. Other sites are being investigated, including Nevis Forest near Fort William.

Protecting our flora and fauna

Wildlife and plant species must also be protected as key natural resources. We will:

  • take forward proposals with Police Scotland for new resources to tackle wildlife crime
  • establish an independent group to consider how to ensure that the management of grouse moors is environmentally sustainable and compliant with the law
  • commission work in relation to protecting gamekeepers' employment and other rights
  • commission a research project to examine the impact of large shooting estates on Scotland's economy and biodiversity
  • establish an independent group to advise on effective and sustainable deer management

Expanding our greenspace

By building on our support for the Central Scotland Green Network ( CSGN), Europe's largest greenspace project, we will improve the quality of people's lives and help tackle inequalities.

Activity will include:

  • targeting improvements in the most disadvantaged areas
  • improving the quality of publicly owned greenspaces for recreation and community use, for example, community growing
  • delivering 25 pollinator projects along the John Muir Way to create Scotland's first pollinator-friendly urban corridor

We will also support increased pollinator planting by local authorities across Scotland on roadside verges, public green spaces and similar areas.

Community growing is a key aspect of becoming a Good Food Nation, contributing to our health and environment, and we will take steps between now and 2020 to increase the area available for this across Scotland.

Repopulating and empowering Scotland's rural, coastal and island communities

People are key to driving forward our rural economy. We are committed to supporting people to remain on and return to the land by creating a sustainable and productive environment in which they can live and work. We will:

  • produce a rural skills action plan in 2018 to enhance employment opportunities for young people
  • seek to increase rural housing stock by enabling more housing in suitable and sustainable rural locations, consulting on permitting the conversion of existing farm buildings to form new homes and exploring incentives to encourage use for permanent housing
  • ensure rural communities are among the first to benefit from our commitment to provide 100% access to superfast broadband
  • ensure that the opportunities of low carbon technologies, not least electric vehicles and energy storage, bring the significant benefits to rural communities that we know they can

We need to attract more people into farming. Key actions will include:

  • an action plan for 'Farming Opportunities for New Entrants' to include the identification of more public and private land for new farmers
  • addressing, through our taskforce on Women in Agriculture, the barriers which prevent more women entering and staying in farming
  • implementation of the measures in the Land Reform (Scotland) Act 2016 to support a thriving tenanted sector for agriculture

Traditional crofting also has a role to play in enabling more people to live and work in the Highlands and Islands but we must also maximise the potential from a modern approach to crofting. That means enabling different ways of working the land and creating sustainable crofting communities. We will:

  • work with crofting stakeholders to explore opportunities for more new woodland crofts and development of a new entrants scheme
  • produce a draft consultation crofting development plan
  • continue to explore development of a suitable funding mechanism to support community landowners with croft registration
  • consult on and develop proposals to reform crofting law

We will continue our work to empower Scotland's island communities. The Islands Bill provides for the creation of a National Islands Plan and a duty to island‑proof future government policies, strategies and legislation.

The Crown Estate Bill will be introduced to establish a long‑term framework for the management of Crown Estate assets in Scotland. This will provide opportunities for local management following devolution, to benefit communities and the economy.


Contact

Email: Gavin Henderson, gavin.henderson@gov.scot

Phone: 0300 244 4000 – Central Enquiry Unit

The Scottish Government
St Andrew's House
Regent Road
Edinburgh
EH1 3DG