Alex Neil, Cabinet Secretary for Infrastructure and Capital Investment, tells Holyrood about his plans
Infrastructure and Capital Investment is a new portfolio – probably the first of its kind in the whole of the United Kingdom. That in itself is a sign of the importance we place on investing in Scotland’s infrastructure.
Bringing together the total infrastructure and capital investment of the entire government is an exciting challenge, and with Parliament returning, there is no sign that the pace will drop.
In the public sector in Scotland, we procure £9bn of material and supplies every year. We have a £2.5bn mainstream capital investment programme to manage, on top of which we have a £2.5bn non-profit distributing investment programme. We are responsible for Scottish Water—a company that has a turnover of more than £1.1bn —as well as for the European structural funds, regeneration, fuel poverty, housing policy and, of course, transport.
Those are just the bare figures. In reality, they are far more than just numbers. They are the means by which we will build the schools, hospitals, roads and modern facilities our communities rely on.
The money we invest will sustain and create thousands of jobs. For example, by prioritising the role of capital investment as a key driver of economic recovery, workforce jobs in construction have increased by 11.6 per cent in Scotland in the year to March, compared to a 0.2 per cent fall across the UK as a whole.
These positive trends are threatened by the substantial cuts in capital spending forced on us by successive governments in London, to the tune of 36 per cent over the four-year period of the current UK spending round.
However, our attitude to these cuts is not to just lie down and take them but to rise to the challenge and identify new ways of getting more value out of the money that we have. Innovation in investment will be the key priority for this portfolio.
The work in the last four years means we in Scotland face new challenges from a strong base. I have been in post just four months, but already I have been able to open the new section of the M74, a key project to promote economic growth in Scotland that has been talked about since 1965.
With the M74 finished, there remains a massive range of transport projects either under way or set to begin construction. Not least of these is the Forth Replacement Crossing, due to be completed by 2016 and which will secure over 3,000 jobs.
Both myself and Keith Brown, Minister for Housing and Transport, have also had the opportunity to see work under way at various housing projects. That is a key priority for this SNP Government. We will drive forward our record house-building programme which has already supported the highest number of homes for 20 years.
Over the past four years, the Scottish Futures Trust has developed into a major instrument of government policy and will continue to play a crucial role in delivering maximum value for our infrastructure programme.
Working with the Scottish Futures Trust, we are considering innovative funding approaches, like Tax Incremental Finance, where Scotland is leading the way, with two approved projects and the National Housing Trust, where work began on the first project only last month.
Alongside our innovative approach, this government, backed by the Scottish Parliament, will continue to call for more substantial borrowing powers for Scotland than are currently proposed through the Scotland Bill.
The role of innovation is absolutely critical.
Of the new housing investment and innovation fund, £20m is for new council housing, £20m is for new housing association houses and £10m is open to all comers for innovative ideas and as Housing Minister, I began discussions on the possibility of raising equity capital from pension funds and other private institutional funds, for housing and possibly wider infrastructure investment.
In other parts of the portfolio, we should not underestimate the importance of European funding for creating jobs and supporting communities.
A new area of the portfolio, one not addressed by previous governments, is the real importance of digital infrastructure. We must begin to see the digital infrastructure of Scotland in the same way we do road and rail, as a vital part of our economy. That is why the Scottish Government has set up a special cabinet subcommittee, which I will chair to focus on how we capitalise on digital opportunities.
With the end of the summer getting closer, the Scottish Government will also continue to focus on our substantial efforts to tackle fuel poverty and make sure people are ready for winter.
Those are the key areas this portfolio will focus on in the short term. But we will also be looking well beyond the immediate future to ensure we provide future generations with world-class infrastructure across Scotland. On that basis, we will publish our Infrastructure Investment Plan in the autumn, which will look ahead at projects in the pipeline for the next ten years. This will be a key publication, demonstrating that even though we are dealing with the immediate challenge of cuts from Westminster, the future of Scotland’s infrastructure is in safe hands.