Welcome everyone to the 15th meeting in 2016 of the Rural Economy and Connectivity Committee. Everyone present is please reminded to switch off their mobile phones. No apologies have been received for this meeting. At gender item 1, the committee has asked to decide whether they are happy to take a gender item 4 in private and whether consideration of its draft budget report should be taken in private at future meetings. Are we all agreed? Yes. We're agreed. The gender item 2 is to take evidence from the Cabinet Secretary for the Rural Economy and Connectivity on the Scottish Government's draft budget 2017-18. I welcome Fergus Ewing, the Cabinet Secretary for the Rural Economy and Connectivity and Mike Baxter, director of finance at Transport Scotland. Colin Cook, director of digital. Joe O'Hara, head of forestry commission Scotland. And Simon Hodge, the chief executive forest enterprise Scotland, all from the Scottish Government. I would like to invite Mr Ewing to make an opening statement, but if I may, Cabinet Secretary, just say to you there are an incredibly large amount of questions to get through this morning and I would be very grateful if we could all make an attempt to get through the questions, all of the questions, by giving short answers. I don't want to distract you from your opening statement. If you'd like to make one, please go ahead. Thank you, convener, and good morning to everyone. I'm delighted to be with you this morning and I welcome the chance to give evidence of how, in particular, my portfolio spending helps meet the Scottish Government's manifesto commitments and how it will assist in delivering our climate change plan, which I believe may be the focus of the committee budget scrutiny. Our overarching aim is to grow the rural economy and support wider connectivity. We will do this by delivering a reformed common agricultural policy, building up our world-class food, drink and forestry sectors, building growth within our marine and coastal communities, improving digital connectivity, particularly to remote and rural island areas, improving physical connectivity and economic productivity. The rural economy and connectivity portfolio budget has increased from £2.6 billion in 2016-17 to £2.8 billion in 2017-18. I'd like, if I may, to focus on three aspects of it in turn. First of all, the rural economy. We will continue to deliver the reformed common agricultural policy and obtain the best results for Scotland's rural economy environment and communities. We will also continue to support fisheries, aquaculture and fish processing sectors by maximising the benefits of the new European maritime and fisheries fund to create and safeguard jobs in remote rural areas and to develop and sustain markets for premium Scottish seafood products. I've listened carefully to forest industry leaders and I believe that the framework that we are establishing with this budget will help to drive the growth in the future sector that we all wish to see. Firstly, this budget supports the vision of seeking a step change in the area being planted by increasing the funding for forestry grants to £40 million. This is part of achieving our programme for government commitment to look at ways in which we can meet the planting target of 10,000 hectares per annum. Second, we will continue to support the strategic timber transport scheme by facilitating the sustainable transport of timber in rural areas of Scotland and delivering benefits for local communities and the environment. Thirdly, the budget will help to address unused and derelict land using trees. There will be an important role here for forest enterprise Scotland's work on the national forest estate. On digital connectivity, this year's budget is the first of a multi-year investment in broadband towards the delivery of our commitment in the programme for government to extend superfast broadband access to 100 per cent of premises across Scotland by 2021. The budget that we have allocated will fund the final phase of the £400 million digital Scotland superfast broadband programme that is on track to deliver fibre broadband access for at least 95 per cent of premises by the end of 2017. The budget will support the initial phase of reaching 100 per cent programme. We will launch new procurement activity next year to deliver new public and private investment focused on bringing superfast broadband to the hardest to reach premises, those that will not benefit from the digital Scotland programme. Transport infrastructure is a key area where improving connectivity between our cities, rural communities and centres of economic activity is vital to boosting productivity and competitiveness. What better example, convener, than the construction of the £1.35 billion fourth replacement crossing project scheduled to open to traffic in May 2017? We will also continue our significant investment in Scotland's railways to support a safe, reliable and high-performing railway. Electrification between Glasgow Queen Street and Edinburgh Waverley will be, for example, completed with new electric services due to start from July 2017. Significant investment will continue to be made in the M8, M73 and M74 motorway improvements and the Aberdeen Western peripheral projects that are scheduled to open to traffic during spring 2017 and winter 2017-18 respectively. Our contribution through support for air and ferry services, including two new major vessels being built on the Clyde for routes serving Arran and the Western Isles, will help support plans for more autonomy for our island communities. As part of our efforts to meet our climate change targets, we will continue to support efforts to reduce the carbon emissions from the transport sector. We will agree the actions to be set out in the climate change plan to reduce carbon emissions from transport. Our approach will be to reduce the need to travel, promote mode shift to more sustainable transport options, increase transport network efficiencies, focus on supporting the development and uptake of new technologies, such as an extensive electric vehicles charging network, successful green bus funds and hybrid ferries. That represents investment of over £230 million since the Future Transport Fund was launched in 2012 on top of public transport funding. In conclusion, convener, the 2017-18 budget is once again a robust plan to develop a more inclusive economy that works for rural communities and for businesses. I look forward to answering your questions. Thank you, cabinet secretary. The first question is from Gail Ross. Hi, convener. Good morning. Welcome, cabinet secretary. You mentioned in your opening statement about the increase to your portfolio from the budget, and we welcome that. I would like to kick off with Forestry, if I may. We were told on 23 November by Stuart Goodall from Comfor that in order for us to now reach our plan in targets, we would have to go up to 13,000 hectares a year, up from the 10,000. There has been enough money in the budget allocated to that. In the budget line, there is an increase in cash terms of £0.2 million, but a real terms decline of £0.7 million. Can the Forestry commission continue to deliver all of its requirements? Is this manageable? If there are any efficiencies to be made, how do you think that they are going to find these? Well, thank you very much. This really is an extremely important matter for us all concerned with the rural economy. The forestry sector as a whole is one that sustains, I believe, 25,000 jobs, and the gross value added is around £1,000 million. I think that it's important to take that big picture because perhaps there has been a sense, convener, that in the past forestry has been seen as a sort of Cinderella-type industry. It's not perhaps received quite the same focus as farming and fishing. I think that that would be a fair point. And yet, those of us, and I suspect most of us, have visited, for example, sawmills in our own constituency. I certainly have with Gordonson, BSW, in my own constituency. In fact, I live less than 1,000 metres from a boat of curtain plant. There are now industries that are highly innovative and use innovative technology, so they are as modern as any other industry. It is absolutely clear that they tell us, as Stuart Goodall mentioned, that in order to meet their requirements, not in the next five years, but in the next 10, 15 and 20 years for supply of timber, there does need to be a step change in the increase in plantations of productive species in particular. That means meeting our targets, which presently we are not doing. I'm determined that we should do that, and there are a number of means by which we need to do that. Not all are financial, but some are financial. That's why I've set out in my opening statement the commitment that we've made to providing very substantial funding to assist in plantings. Other parts of what we're doing, conveners, is to assist further the timber transport fund, because in my part of the world, in Gael Ross's part of the world, convener, part of the problem is that assets are stranded, they're inaccessible. Because of the remote location of forests and because of transport problems, it is very difficult to harvest mature forests, in some cases. The timber transport fund is being maintained. Thirdly, as well as the funding for planting the timber transport fund being maintained, we are looking at improving the procedures by streamlining the procedures. Jim McKinnon, formerly the chief planner of Scotland, has recently produced a report, which has been made public, convener, and I believe conveyed to this committee how we can streamline the processes to make sure that they are swifter and easier to navigate. I praise the work of Forestry Commission and Forest Enterprise in doing that, but perhaps for a specific answer on some of the budgetary aspects that I've given an overview. I hope that's useful. It's an extremely important issue, so please bear with me for taking a little time to set it out. It's something that I feel really passionate about, convener, but perhaps to answer some of the specific budgetary matters, Joe O'Hara of the Forestry Commission could help out. Before we ask Joe to come in, I'd quite like to drill down on those figures a wee bit and Peter has some questions that might help us do that, and then bring Joe in sufficiently. I mean, welcome to everybody, and I need to declare my interest in the register as a farmer before we get my fingers wrapped again, so I've already done that. I'd just like to drill down, as convener says, we have been told that we're well behind the planting targets and we've heard that if we are to meet the 10,000 hectares a year target, we need an extra 15 million pounds in the budget, and if we're going to achieve and catch up the backlog, we need to be planting 13,000 hectares a year, we need about an extra 29 million pounds in the budget, and this is to, obviously, support the private sector in planting woodlands. So we don't see that kind of figures in the budget, so how are you going to achieve the target that we've already been missing for a number of years on the backlog to catch up one, so that is a specific question there. Joe? Are you going to answer that, cabinet secretary? Well, to save time, I'm happy to pass to Joe. Thank you.  We recognise it under the last SRDP programme and that the structure of the grants that we were applying were not attractive enough for people to bring land forward for planting. So although in those years we had budget and we were handing back a significant amount of budget at the end of the year because demand wasn't there, so we have never turned away a grant scheme because of lack of funding. So it's very demand-led. Now, we introduced a new grant scheme before last. We listened to what the sector was telling us in terms of where we'd got the previous one, we'd got the detail of it wrong and what we needed to do to bring more planting coming forward. They said to us that we needed to change the grant scheme and that the process for approval of forestry applications was becoming very burdensome and was putting people off from going forward. We addressed the grant scheme with the last cap. We've introduced a new grant scheme and we always see in forestry and it's been seen in England and Wales as well whenever we change to a new grant scheme because forestry is a very long-term business because people making land use decisions need to think before they lock that land up potentially in perpetuity in a new land use they need to take their time. So we always see a dip when a new grant scheme comes in before we see what the impact has been on applications. I'm now very pleased to say that really since this summer we have seen a substantial and sustained increase in applications coming forward to us as a result of the change in the grant scheme. However, it's not quite at the level yet to get us up to deal with the backlog but we believe it's coming and I also believe that the work that Jim McKinnon has done to make the application process more straightforward will again bring more people forward. So to get to the point on the number I recognise the numbers that Stuart's given you we've discussed them. My first target is to get to the 10,000 because that's a really important milestone to get to. We've looked at the applications that we have in the pipeline coming forward that have come forward over the summer. We're getting more larger schemes, more commercial schemes which are actually cheaper in terms of grants. So the amount of grant that we pay depends on type of forest. We think that we're going to get around eight to eight and a half thousand hectares of planting coming through in the year that we've got this budget for. That is the budget that we've put in and that's why the number is in there at the 36,000 for forestry grants. There's additional land that will be planted by forest enterprise which doesn't appear on the grant scheme so 650 hectares coming from there. So the figure that's gone into the budget is what we do every year. We anticipate what we think demand will be because if demand isn't there we can't pay the money out on it. So that's talked a bit too long but that's the background to it all. I think subsequent years with the impact of Jim McKinnon with the real energy that the Government has now putting behind woodland creation and we have just seen so much more interest coming forward all of my teams are working flat out because of the increase in interest. I think we're going to see this build and build and this step change that we're seeing this year we hope to see next year is the first of that process. Can I just drill down a wee bit more? Over the last number of years we've seen the mix of broadleaves and conifers. It's been mostly broadleaves that's been planted. Now these aren't the forests that the sawmills require to keep them in business. Can we be assured that there's going to be a switch to more productive conifer forest in the near future because I think that's very important. That was exactly what we did in the plant scheme and we are seeing in the applications it's about 75% productive now coming through. We have seen that change coming through. Joe, just before we move on to the next question, can I just clarify in my mind is that the planting target that we'd set for 100,000 hectares by 2022 your estimation will not be achieved? Anything beyond next year I don't know what's going to happen beyond next year. Over this year's budget we're going to be around just over 9,000, I suspect, on the basis of current demand. The impact of the approvals process and the wider impact of things like cap and Brexit on people's land use decisions I can't predict, so I don't really want to say at this point where we're going to be with 100,000. I can't say that. I think, convener, that the progress that's being made is extremely encouraging and it is important to pick up Joe's point that there hasn't in previous years been a demand. Therefore, part of what I have to do is to stimulate interest in investment in our forestry so that that appetite for demand increases and I believe that the signs are extremely positive as Mr Chapman will know for seeking that additional investment and that's why we're looking at investment from various sources from landowners, possibly from pension funds, from communities. I would like to see the possibility of communities being able to have more opportunities to having ownership of a stake in forestry. So do many investors, so do many landowners. We've seen it in renewables. Why not see it more in forestry if we can? But we need to stimulate the appetite and I believe we're doing that and the figures of 8,500 to show a fairly substantial increase in the previous year and from the two forestry summits that I've already held and from my engagement with the NGOs it's clear there's a big consensus across the whole community including those who are concerned to protect our precious environment. The last thing I'm saying is that the figures are quite stark. The WWF recent report a couple of months back has opined that unless we increase the plantation of productive species, not just productive but native as well, then by 2050 the UK will be importing 80% of the timber that it needs. That's quite a shocking scenario when the climate, the temperate climate in Scotland and the rest of the UK is ideal for planting trees that are extremely useful for construction, for sawmills and for a whole variety of purposes. I think that the signs are really right and I really look forward to working with the committee to use all the levers, not just financial but substantially the increase in money that we're devoting to planting to help meet the targets that I think we all want to see. I would agree with you that it's very encouraging that we're seeing an increase but it's still 4,500 hectares below what has been suggested either 13,000 hectares that we should be targeting for this year but maybe we could leave that there. Maybe I could ask a question now on the sales of the forest estate and if you could perhaps just explain to me how the sales and the repositioning of the forest estate is decided upon. Yes, I'm certainly happy to do that. Over the last 10 years convener ministers have mandated Forest Enterprise Scotland to sell lower priority land and forests in order to reinvest for higher priority objectives and this programme is called Repositioning and it has made significant contributions to four things to woodland creation for climate change mitigation and future timber supply also community benefits through urban regeneration and land sales to communities supporting agriculture by creating farming opportunities for new entrants including nine starter farms and delivering ecosystem benefits at a landscape scale. On the factual side of things since April 2005 some 46,000 hectares or 7% of the estate has been sold but over the same period 30,000 hectares have been acquired Properties sold are selected with the help of cost benefit analysis over 100 million pounds has been raised and reinvested in the estate since 2005. The most recent significant sale was the Barracks in Highland Persia nearly 4,500 hectares sold for 9.5 million and the largest single sale from the estate in several decades but as well as Land for Woodland creation a significant acquisition of nearly 2,400 hectares was made for 7.4 million in 2014 at Rothery Mercus to secure the heritage value of this key part of the Cairngorms native pinewood. Repositioning has been a process that has been carried out for over a decade and plainly it is a sensible process and it is sensible to reinvest the proceeds in the purposes the objectives that we are always to see achieved Woodland sales are reinvested in acquisitions Woodland creation and other repositioning objectives so I hope that that paints a kind of headline picture but I'm sure Joe O'Hara can Oh sorry Simon Hodges here When Simon comes in can I ask him just to address the logical follow-on to that could you confirm to me that any capital received from sales or repositioning of the national forest estate have been reinvested in the national forest estate and haven't been used for grant funding for trees That's right The situation is that the as the cabinet secretary indicated the receipts from the repositioning sales have been reinvested into Woodland creation on the estate our urban regeneration work for example in the centre of Bell to Glasgow promoting agriculture integration and starter farms and acquisitions that help us to deliver ecosystem benefits at a landscape scale on the national forest estate Simon, can I just be exactly clear I'm not sure I fully understand that Could you confirm that the money raised from sale of the national forest estate is not being used to fund grants for growing more trees That's right All repositioning sales receipts today have been reinvested on the national forest estate Okay, thank you I think I'll leave it there Mari, I think yours is the next question Yes, it was just that the committee had had evidence from Confor which suggested which talked about planting in marginal sheep farming areas and Confor suggested that you deliver four times as much income to the landowner and twice as much money into the local economy as what you would get from marginal sheep farming to ask if you think that there's meant it in encouraging that and planting in marginal sheep farming areas and do you think that that would result in a saving to the public purse as was suggested by Confor? I think that Joe Harris prepared to answer this one if you want Yeah, sure We've been doing quite a lot of work with Confor, with National Sheep Association with the NFU to look into this because following up from my previous question one of the reasons why we haven't had more land planted is because the people that currently own that land don't choose to plant it with trees A lot of the land that is the most suitable for tree planting which is generally marginal agricultural land is currently farmed and mostly farmed for sheep so that's where we have this pinch point in terms of supply and demand now Do the sheep industry is going through a lot of changes at the moment as well and we think that there are real opportunities here both for the farming sector and the forestry sector both to benefit because at the end of the day it's about the best use of land I'm familiar with the Confor report and it did take a very specific example but it is true if you look at the economics you do look to make good returns from forestry relative to certain projections in terms of sheep farming and I think the employment if you spread it over the full rotation is comparable as well if not better in forestry but probably the best outcome is if you've got an integrated use of land that's not entirely dedicated to one or the other and that is the work that we're doing both with the farming sector and with the forestry sector to look to see whether we can make the best use of the land be that trees, be that sheep cattle, be that whatever in order to deliver the best for Scotland and the best return for the public purse so in answer to your question there are opportunities there's no questions opportunities there the farming sector recognises it and the forestry sector recognises it and that's absolutely an area that we're working on and focusing on going forward so the discussions are on going with that we've held two events in the last year which we call sheep and trees events the National Sheep Association fronted them up but it's very much a partnership with ourselves, the rest of the Scottish Government and the NFU to start helping farmers to see the real opportunities that are potentially there from growing trees as part of their business okay thank you cabinet secretary I think there's a sort of ancillary question towards marginal ground which Gail would like to ask you cabinet secretary as you're aware my constituency holds one of the biggest peatland areas in the whole world I wonder if you could tell me a little bit about the budget line which tells us about investment in peatland restoration please yes there is a substantial investment being made in peatland restoration and as we look for the precise figure this was something that was very much being dealt with by my colleague Cunningham substantially although I think in our budget so we did work together to make a very substantial investment in a peatland restoration which of course is extremely important for the flow country and something that has been lobbied for pretty strongly by a number of stakeholders including NGOs and will make I think a very significant achievement towards our targets I don't know if any officials want to add anything Mr Baxter has found the page I apologise within the SRDP the budget for 1617 included 2 million to cover peatland restoration that's been increased by 8 million in the 1718 budget so there's a significant additional investment being put into peatland restoration I was going to ask what exactly is this for how is it going to be used but I don't know if you're going to be able to answer that we need to follow that up I'm happy to provide details through Ms Cunningham who as members will appreciate has been the minister dealing with this issue but obviously we're delighted that this investment is going to be made and I'm sure that part of it will support activity taking place in Gil Ross's constituency so imagine that that will be a satisfactory outcome it would be very helpful cabinet secretary if you could maybe ask for a quick response because we as you well know are all committees under a very tight timescale for reporting on the budget is that sufficient? we're now going to move on to that payment Stuart Stevenson is going to start and before we go any further I would now as a farmer would like to declare an interest that I have an interest in a farming business I didn't do it earlier because I have no interest in growing trees but I do in farming so Stuart thank you very much I have registered agricultural holding of the grand total of three acres of the farmer who uses it seasonal grazing that's all the economic benefit I just wanted cabinet secretary there are increases for cap IT and for payments and inspection administration costs we've previously heard from you of your commitment your determination to make sure that IT does not get in the way of effectively delivering payments to farmers in the coming year I take it that you can confirm to us that these increases are directed at that and that we'll see that IT does not become an issue that we have to discuss to any material extent in the coming year yes we thank you for that question we do have confidence that the IT future system will deliver within its budget the core components for cap compliance and it indeed would not have been possible to deliver payments to customers and meet compliance rules without a bespoke IT system obviously this is a matter which is subject quite properly a great deal of parliamentary scrutiny and I don't shy away from that and I stand by everything I've said before and I hope I've sought to deal with it in a straightforward matter I think it's perhaps useful to remind everyone that the IT system was designed not just for one or two years but for several years to come and I believe the figures not in front of me here but I think the total payments that it was designed to support are of the order of £4000 million in other words it was an expensive system yes but one which was to be used as a tool for delivery of the agricultural payments a great deal of other payments across the rural community and it's important I think not to lose sight on that so yes mistakes have occurred in the past and we've put our hands up to that and quite candid about that which I think farmers at least appreciate and I was pleased that the national loan payment scheme was able to benefit I believe from memory just over 13,000 farmers with a very considerable injection into the rural community at an important time of year namely the first fortnight in November early enough for farmers who wished to do so to make investment and I was at Agri Scott where quite a lot of investment happily was taking place much to the pleasure of the stall holders I can assure you so although there are problems I hope that we're now turning the corner and I just want to finish by saying that you know this remains my top priority to get it right and when I say that that means that I am spending time as I did last week meeting the chief executive of CGI the company that's the main contractor working with him to ensure that things are on track to avoid a repetition next year of what we saw last year and we always should do that so I just want to give that personal assurance that you know I am absolutely on the case with civil servants who are spending a huge amount of time and effort to get things right convener because I know that many members of this committee have quite rightly been pursuing this on behalf of their constituents and therefore it's absolutely essential we get it right and that does require the necessary budget tree commitment to be made Can I just complete my interest in this the level 4 figures for pillar 1 show no inflows and outflows in your budget at all and the note is that the funding is solely from the EU European Agricultural Guarantee Fund I wonder if you can just confirm in cash flow terms because with our now distributing money earlier to farmers than has been the case historically not all of it but substantial early payments that the cash flow of those payments we are making matches the cash flow of the payments from the EU Agricultural Guarantee Fund That is a technical question obviously I want to give you an answer which is technically accurate and it wasn't one in which I was anticipating so if I may convener I will come back very quickly to answer to that question in letter form To Mike Rumbles can I just drill down on to what you said there my understanding that in 2014-15 the budget for the payments and inspectorate admin was 34 million in 2015-16 it rose to 45 million in 2016-17 it rose to 55 million and in 17-18 it's rising to 62.9 million a massive increase with a computer system which should be as you're saying cabinet secretary delivering a payment system that should work for Scotland my calculation suggests it's almost double and I wondered if you could explain that to me please Well I can come back to you convener after we've checked the figures for the previous years of 2014-15 undoubtedly the case that the new CEP the reformed CEP is massively as you know massively more complex than its predecessor because of the agreement reached with all parties including the NFU that there should be a differentiation of three categories of land that added massively to the complexity of the system that was an agreement I think everybody supported that so far as I'm aware all parties at the time it was designed to achieve desirable outcomes but the concomitant was that it massively increased the complexity of the system and when you take account of the hundreds of thousands of holdings the necessity of absolute accuracy in GPS calculations for each field each component of each of hundreds of thousands of holdings you quite simply have an extremely complex system and therefore I think one doesn't really need to be possessed of a brain of the scale of Einstein to realise that it is going to be more expensive to administer so yes the costs are more but they were bound to be more and these decisions taken prior to this session of Parliament are decisions that it falls to me to implement and I'm determined to implement it to make sure that the prime objective which is not for me with respect pouring over what's happened in the past but looking forward to the future is that farmers get their money in time that's what I want to secure next year and I can assure you that the financials efforts are determined and that is something that I personally oversee and guarantee every single week of my short tenure in this office and deal with the system with all its complexities in order to get the money out and I'm very pleased for example just to give you one statistic that the uptake of the SCF forms has substantially increased here and the success and delivery of the national loan scheme I think is a positive sign and the next report and I think I've agreed to do this so no doubt we'll have more time to come back to this happy topic will be at the end of January and I very much look forward to updating the committee at that time and cabinet secretary can I just say that we have agreed that you will come back towards the end of January and I welcome your confirmation of that and at that stage I would like to delve down on why the computer has doubled in cost and the cost for implementing the system has doubled in cost because I don't think we have time to go through all the nitty gritty now and Mike would like to ask the next question Thank you cabinet secretary I just note on that point of the IT system from the draft budget saying it had gone up to £172 million now this is rising to over £42 million it means it's over £200 million being spent so far on this coming year on this system which is a heck of a lot of money Anyway I've got two parts to my question really Minister you keep mentioning that it's important that the farming businesses get their money on time and you said that you are very pleased with the uptake of the loan scheme that the Scottish Government has got but of course with one third of the farm businesses not claiming the loan scheme and the remaining two thirds only receiving 80% what it actually means is that over £200 million that would normally go into the Scottish economy each December isn't going into the Scottish economy the rural economy in this period so I'm not just focusing on how much is being going to the farmers but the fact that a whole rural economy is affected by this not just farm businesses my question really is in two parts how confident are you that the European Commission's target of 95% of entitlement payments that's the full entitlement payments will be paid to farm businesses by June and my second part of my question is I've been trying to find in the budget the budget line for the loans now it's my understanding I have been told that this money for the loan scheme comes from the Scottish Government's own budget and yet I can't find any lines in the draft budget for the loan scheme could you direct me to where I can find it and is it actually or are these money actually going to be paid back to the Scottish Government before the farm businesses then receive their entitlement okay well there's several components to and I'll try to deal with each of them first of all I think it's relevant to point out and Mr Rumbles quite rightly mentions the penalties and obviously we have a specific duty to do everything we can to minimise the possibility of penalties that are arising and this in itself is a very exacting task because the EU rules are extremely detailed and very demanding in fact our benefits analysis demonstrated that developing a compliance system would avoid no less than £276 million of financial penalties to 2021-22 I just mentioned that because that is a reminder I think of developing a compliant a system secondly in relation to the loan scheme I'm not quite sure that I would accept the one third figure I think the uptake was substantially more than two thirds however the point I think is a well made one that there was a substantial number of farmers that didn't take out the payment and I want to make it this is something that I was aware of that we took great steps to encourage all farmers to take out the payments we explained that no interest would arise except in a very unlikely a very remote scenario for most applicants namely that it turned out that the payment that they receive 80% of the total was more than their actual entitlement and they then paid the excess back late in almost all cases no interest accrued now what we did convener and I have an opportunity to say this the question has been asked I think it needs to be answered I spoke personally last week to the head official who was handling as the project team this matter and I had been involved in numerous exchanges with him over the last weeks and he confirmed to me that there were steps taken applied for the payment to ascertain why they didn't do so and this in all cases was the decision taken by the farmer they decided that they did not want to take up the payment now that is entirely a matter for each individual each individual was quite entitled to do as he or she wishes but I just want to make it clear that I made sure that steps were taken both in publication of The Scottish Farmer and the other and Specialised Press and the General Press and also individually by ensuring that individual farmers who had not sought the payment were contacted to ascertain why they did not every single one but a sample were contacted to say that the money is available if you want it there is no interest on it except in this remote scenario will you take up the money and just the response I got from the head of the project team was that it was an individual decision taken and that is absolutely the right of each individual now as far as the last question that Mr Rumbles raised I think it was in relation to how the matter was financed it was financed internally by the Scottish Government in respect of an internal transfer to allow us to have sufficient funding to fund the loan scheme to give us certain value and there was of course a cap applied I think at 150,000 to to put a cap on the total estimated liability so it was done by internal transfer that internal transfer will require to be paid back by the end of the by a certain time in the financial year and I'm happy convener if it would assist to provide full details by letter to the committee of how that operates that's a perfectly legitimate question and if that would help I'm happy to do so or alternatively Mr Baxter Mr Baxter if you would prefer can give some more details right now Could I ask specifically this is a very important point because it came as a surprise to me that this is not European money this is money from the Scottish Government it's Scottish Government's own money and because of European rules I believe that's the case just over I take the point, it's not two thirds it's just over two thirds of our farm businesses and only 80% of those of what we think of their entitlement will the farmers under European rules actually have to it's not just a paper exercise will they have to actually pay that money back to the Scottish Government I'd like to know if that's the case I'll need to provide further information in terms of how the budget is presented the loan schemes are financed through the financial transactions budget so that's for loans to third parties effectively and are offset when the cap payments then are made plans are in place to ensure our financial transaction budget obligations are met such that we operate within the allocated resource budget and I can provide further detail but my question really is because of European rules do the farm businesses actually have to pay the Scottish Government back the money rather than just being a paper exercise it's up to us to repay the summons if you like transferred from the financial transactions budget to the budget to enable the national payment scheme to be made so farmers will not have to pay that money back that would be absurd we've paid them the money we've made arrangements to enable us to do so with a short term internal transfer it's a perfectly sensible thing to do I was determined to do it obviously we worked closely with Mr Mackay the finance secretary to enable that and I was delighted that he showing the commitment of the Scottish Government to Scottish farmers made sure that we were able to offer farmers earlier payment than normal it was the right thing to do it was one, it was a measure which was welcomed as I understand it by the national farmers union quite rightly and also welcomed by every single farmer outside this Parliament that I've spoken to I have to leave that point there because I think you've clarified that the money won't have to be paid back to be reclaimed so I'm happy to leave that there and develop that line of questioning if we feel there's a greater need to do so when you come back at the end of January we're going to move on if we may to digital connectivity a subject that crosses all party boundaries and Jamie's going to lead on that thank you convener welcome cabinet secretary and other members so yes we could turn to digital connectivity I think it's important this is an analysis of the budget so I'll try and keep it related to budget questions it's important we look at those in specific so I think if we could look at the budget for next year the line that's in here the capital commitment for around £110 million the cabinet secretary mentioned it in his opening statement I wondered therefore we could drill down a little bit into that number if for example he could provide more details as to what portion of the budget for next year is actually forming part of the funding for the two existing contracts that the government has with BT the portion of that budget for next year going to be part of the next procurement for the R100 project that would be our first short question and I think the reason I ask that is a more general issue that this is just a snapshot of the 2017 budget so it's very difficult for the committee to really get a feel for the overall cost of reaching that last 5% so therefore if the Government has given any thought to the overall cost over the next couple of years to give us an idea of where the next year's budget would be and I'm happy to clarify my question if it's been over the complicated apologies OK, well thank you very much to answer your question which was which part of the total capital allocation of 112 is being used in order to deliver the digital Scotland superfast broadband programme, the answer is 21 million of that I think members will be aware the digital Scotland superfast broadband programme is moving towards completion it's £400 million budget in total that covers the two contracts one through HIE for the north of Scotland which was moved forward first and the other administered by the Scottish Government for the rest of Scotland and that up to 21 million would be used to deliver the final phase of the £400 million programme which is extending BT's fibre broadband network into non-commercial areas so this investment will extend fibre access to at least 95% of premises across Scotland by the end of 2017 and members might be interested to know and these figures are still to be audited and finalised but<PHONE_NUMBER> homes and businesses have been connected 90% at the superfast broadband speed and that means that by the end of the contract the coverage will be 95% had it not been for this contract convener and this is a really important point the planned commercial coverage would only have reached 66% so as a result of this contract and it has been delivered reasonably well, Audit Scotland and others have recognised that as faster progress than down south as a result of this project 95% of premises will be covered by the end of 2017 next year 679,000 present to be audited and of those the vast majority receiving superfast speed so of course many many people haven't yet got coverage and the next part of what we do and other elements of the capital budget are of course going to start to address that problem of all the many communities that through the MSPs here and in Parliament quite rightly ask for answers I think it's important to recognise that you need to design, to survey, to build to connect, to activate their 5 processes to connect broadband each one of those stages can result in difficulties and delays that's the nature of any project to install utilities so none of this is straightforward but good progress has been made and I'm delighted to have had the chance to outline those facts I thank the cabinet secretary for that detailed answer the only thing that's missing is just the answer to the second point of the question I think it's important we get a feel for the scale of this last 5% so assuming the 21 million of the 112 is related to this to the existing contracts does that therefore mean that the budget allocated next year around 90 million will form part of this remainder budget so the original question was has the Government given any thought to the overall cost of what it might need to reach that 100% commitment because it is very hard to tell if 90 is scratching the surface or if it's a suitable amount that's being reserved I appreciate that the process hasn't started and the procurement process has yet to take place but I'd like to think that the Government has an overall picture of the potential cost of reaching 100% that's guessed the worst of my question just before you answer that give you a moment to gather your thoughts Gail wants to supplement that specific point with another question so I'd like to bring her in now thanks the 112 million and the 21 million of that for the current programme in the Audit Scotland report has been mentioned several times of 42 million that was going to be used for the programme next year and at the Audit Committee we asked Scottish Government officials where that was going to be used and they said that it was part of the budget for the next year's programme I see no mention of it and I just wonder is that part of the 112 million is it disappeared, is it still there where has it gone I haven't the Audit Scotland report in front of me but that did predate the preparations for this budget it did by definition I think we must be looking at a different figure but I can in response to both members say that the most of the balance of the 112 will be looking forward and will be designed to dealing with two things in particular principally at least the 100 per cent superfast broadband programme and also mobile telephony so there will be large sums allocated to tackling both now you know obviously convener I think Mr Mr Greene quite rightly alluded to this you know there's another point we need to make first of all the Government, Scottish UK is not the default provider of broadband I mean it's commercial operators who are making the money out of this they install the broadband or one particular company and then they make money out of it by supplying customers with broadband so let's not forget that there is a commercial driver here and we are not the the taxpayer is not the default provider of the laying of utilities and I think it's important just to spell that out because all too often in political debate it supposes that somewhere there's a piece of legislation passed in Westminster which of course has reserved responsibility over these matters that says the taxpayer shall fund broadband for everybody I mean that is not the case and I think and I hope all members would subscribe to the principle that we should get of course the commercial operators to fulfil their responsibilities because they will go on and do business out of it as is reasonable but not with the public sector being the soulless investor and that in turn means that in the negotiations that we have we must be very careful convener not to prejudice those negotiations by being overly candid about what we want to bring to the table but all of that said we have a major commitment in our we work very closely with broadband and mobile companies we have the mobile action plan in Scotland the only one in the UK we have had the accolade that Ofcom has said that we're making faster progress than the rest of the UK Audit Scotland has recognised the progress we're making but all of that said there's no comfort to people out there particularly in the rural parts of Scotland who are not yet getting the coverage they want and the last thing I would say is that let's not forget either they've taken a different approach from the UK Government they've taken an outside in approach other countries have made a policy decision that they should be provided to their rural communities proper mobile and broadband access by regulating the industry in order to require them to produce that that was not the decision that was taken by the UK Government instead they wanted to maximise the profits by sale of spectrum from mobile and I've written to Matt Hancock we've yet to agree a meeting ago and saying when you get round to 5G spectrum auctions will you go for the outside in approach by maximising the regulation and thereby providing the maximum opportunity of people in rural Scotland to have proper connections or will you not and I look forward to getting a very positive answer constructively with the UK Government Cabinet Secretary you've made your point very forcefully but we've drifted slightly away from the budget if I might be so bold as to say and Jamie wants to really I think drill down on the provision to the non-commercial areas and community broadband and perhaps I could ask them in that direction I'm happy to move on I think community broadband in Scotland is a fine place to move on to just on the points that the Cabinet Secretary made over I think whilst the Government doesn't have any mandate to deliver broadband I think most people would perceive broadband as a utility these days in the same way they would as gas, electricity or water each of digital Scotland and our ability to compete in the world stage I think is important that broadband is available to every household and business in the country so that's the only additional comment I would make. On community broadband in Scotland I think there's some excellent work being done there I'd like to first of all praise the work that members of community broadband in Scotland have done thus far on the budget they've had there isn't any mention of it specifically in the draft budget therefore could I ask the Cabinet Secretary what the plans are for community broadband Scotland in terms of its future and also its funding I mean I would subscribe to the sentiment that Mr Greene has quite rightly expressed we all want to see people getting proper connectivity and all members I think here have made that point very forcibly from time to time so we all want to get to the same place but it shouldn't just be at the public expense I think that's through the main point that I wanted to make Mr Greene, plainly we want to continue to support community broadband Scotland to carry on the work it's been doing it has approved funding for 77 communities at various stages of project development process and is supporting over 100 communities further of the 77 projects 16 covering over 4200 premises have received capital grant funding totaling over 1 million and therefore as with Mr Greene I do think that community broadband Scotland has been performing a very useful and valuable role for some remote rural communities but we will need to tender for further provision to reach the 100% target in the course of next year and I wonder perhaps if Colin Coog who leads on this might perhaps give a little bit more information about the funding aspects to the committee with your permission I'd be delighted to do that and just if I may to pick up on the previous point you noted that there were a number of different variables that have to be taken into account as we agree forward funding for the reaching 100% project one of those and one of the key one of those is the open market review which is currently closed at the beginning of January which will allow us to get an up-to-date understanding of the commercial plans of commercial providers across Scotland and that I think is a really important piece of information to allow us to define an appropriate procurement strategy within the budget there is provision for the running costs of community broadband Scotland broadly speaking they cost in the order of about a million pounds a year directly from the Scottish Government to operate but I think the critical thing for the projects that are in train and my community broadband Scotland have around about 19 projects that they're looking to deliver in the months ahead they do also have access to the Scottish rural development programme funding of up to nine million pounds so I think the funding is available for community broadband Scotland to continue to do the kind of good and impressive work it has been doing to date Do you want to come in on the back of that? It was much earlier point to convene up. I just want to the Cabinet Secretary said and it's very welcome 697,000 houses now are connected for superfast broadband I wonder if the Cabinet Secretary actually meant that the superfast broadband is now available to 697,000 only a proportion of those for whom it's available will have chosen to connect but I just thought it would be helpful perhaps to get that clarity as to what the figure actually means That's a very sensible question and maybe Mr Stevenson is envisaging a future career as a spin doctor I don't know but to be serious the figure actually is 679,000 so I've never yet been able to correct Stuart Stevenson or anything but it wasn't 697 it was 679 the point that's well made is that every single household or business will choose to avail themselves of the service That's fine Just on broadband then I want to move on if I may from broadband to mobile applications Just on budget so as you're probably aware the chancellor announced substantial investment digital infrastructure across the UK including fibre connectivity and 5G mobile connectivity the number is around £740 million through the national productivity investment fund I presume that that is additional funding to what's in your existing budget for the R100 project I just wonder what conversations the cabinet secretary has had with the UK government on this additional investment announcement made by the chancellor and how that will tally up with the Scottish Government's own plans in terms of making sure that Scotland in a sense benefits from any proportion of that funding that's being made available by the UK Government I have had no discussions with the chancellor of any description whatsoever we weren't informed of the announcement in advance but we do believe, as Mr Greene appears to believe that we should have a share of this funding but as yet we've had absolutely no confirmation of that of the substantial amount of money and therefore we would expect that Scotland would receive a due share but we weren't taught about it in advance and we haven't heard anything since we have obviously pressed for an answer Mr Cook could expand on that Yes, I mean just to clarify we have met at official level to discuss this we've started the process of seeing the contribution that this might make to Scotland the plans are not to break down between technologies and approaches are not yet firm so we don't know precisely how it will contribute to our targets in Scotland but we are engaged in that process and I think there's a very constructive relationship at official level and they're going to look at some of the work that we've been doing preparing the ground for 5G for example which I think has lessons for the rest of the UK and we're very proud of So there are just confirmed that you have had at official level you've been in dialogue with BDUK I mean they've been a major funder of the Superfast Broadband programme so those discussions are on going and clearly when those kind of announcements are made and as the cabinet secretary said we weren't consulted prior to that announcement those things are bound to be discussed at official level Thank you Roy, did you want to come in on that because your questions sort of linked into that It is slightly in that you spoke about discussions with the Westminster Government and talking about priority given to rural areas I'm wondering in the next contract that is going out whether that will be designed to give priority to the most hard to reach areas because while we've seen a huge number being connected there are still areas where there is little or no hope of connection and I would say a building concern Well yes that's a very reasonable point and you know plainly the purpose of the commitment that the Scottish National Party made and now as a Government we have accepted and we are going to fulfil is to provide that universal access to broadband by the end of this session of Parliament and to do so with all due speed I stress it's a very complex task and in the past mistakes have been made about the specification of contracts the mobile infrastructure programme for example was a complete disaster when instead of 80 new mobile masks there was only three delivered I believe the UK programme so it's very easy to get it wrong it's far more difficult to get it right and obviously we want to work with the committee in that respect but I did write to Mr Hancock in October about this particular matter I think his office contacted me last week and we hope to meet in the new year and I will be arguing that the kind of approach that has been set out by the member is the kind of approach that I think would be fair to see some redressing of the balance for rural Scotland and the islands of Scotland because they're too often at the coo's tail of things so you know this is certainly something that's close to my heart and other member scale rosses as well obviously because we tend to have far more people in our constituencies who lack connectivity that perhaps people in towns and cities don't so the approach of requiring operators to do more for the rural and island parts of the country I think is one that we have and will advocate when I meet Mr Hancock and I hope that that meeting after a couple of months of delay and non-response can be arranged early in the new year because you had made that point can I ask if that point is something that you're going to use when you design your own new contract the Scottish Government's contract is that the approach you're going to take about prioritising the most remote rural areas because we've almost seen the low-hanging fruit being collected and people are getting more and more frustrated that the people who desperately need this because of their location are being left behind to an extent well obviously the approach we're taking is to reach 100 per cent so plainly we want to reach out to remote rural and island locations I mean we can't achieve everything at once the processes are effectively a type of civil engineering contract but the approach broadly is the one we want to take but I was drawing a distinction between the approach we will take with a tender exercise to be carried out to extend to rural and island areas superfast broadband or access to superfast broadband with the powers of the UK Government that as the possessor of the legal competence have the power of regulation it's not just about money it's also about regulation and regulation in other words what you ask the mobile operators to do in the case of mobile telephony and in the case of broadband dictates what they will do I mean plainly commercial operators tend not to do more than they have to do unless they can do so profitably and most profitably to deploy their capital in the most profitable fashion so that's why the approach to other countries have taken an outside in approach in the EU precisely because they believe for policy reasons that it's important they do so is one that we have advocated that the UK Government emulate not dissociate themselves from and I will continue to do that with Mr Hancock and I will happily report back to this committee as to whether or not the UK Government exceeds to the approach that Rhoda Grant and I would like to see taken I don't know Mr Cook wants to add anything to that just to pick up on the point directly and obviously we haven't yet designed the procurement strategy and I mentioned earlier that the open market review is going to be critical for doing this but clearly achieving 100% will be a mix of Government funding and commercial activity and there are many urban premises that are not connected to superfast broadband and the likelihood is that commercial companies are more likely to be able to address those premises than they are those in far rural premises and therefore the balance of Government investment and the timing of Government investment is likely to be skewed to rural first if I can put it like that within any procurement strategy. That was the answer. Cabinet Secretary can I just have a bit of clarity if I may please in the draft budget it states we're working with mobile operators to develop programmes to address 4G coverage gaps i.e. no G please what plans you have afoot and what budget has been satisfied to implement the mobile action plan agreed with the four UK operators and what specifically monies have been satisfied for that please. Okay, well I'll pass to Mr Coop specifically for the money but there are several components to the mobile action plan and they are all very important and the non-monitory plans are important as well and they include for example working to extend permitted development rights so that the construction of mobile masts can be completed as swiftly as possible and indeed the applications can be aggregated in this work we have in the Scottish Government had great co-operation from local authorities in the Highlands and Islands the consensus view as I think it's fair to characterise it was that the quicker we can get on with this the better, that was certainly the Highland Council view at Cohe a very useful means of working together in these matters and also the higher masts the greater the radius of coverage in other words the higher the mass quite obviously the area and the number of people that can get a signal from that mast is of value in addition to that we have another segment of work with the emergency services because plainly they have masts and I know that there is good work done through that particular aspect and also we have had a rates relief pilot in the national parks for mobile operators that's another aspect of what mobile operators are looking at and we are looking at possibilities there and end and we have also made budgetary provision to supplement the work we are doing but I'm not particularly keen on getting involved in specifics at this stage I'm happy to brief the committee privately I prefer to keep our power to drive for commercial, confidential reasons because we don't want to start prejudicing negotiations do we convener into those matters I think we all want to get the very best as it's been acknowledged from private operators but perhaps Mr Cook could expand on the importance of that aspect I mean I think you referenced the mobile action plan and our principal investment certainly this year rising from that plan is going to be in terms of 4G we are working currently with Scottish Futures Trust to develop an infill plan for 4G and that work should be completed by the spring and I think that will define the procurement strategy and therefore the amount of the budget that will be allocated to mobile and as the cabinet secretary said we're also working with UK Government to take advantage of the UK wide emergency services mobile communication programme trying to develop that programme in a way that has value to mobile coverage across Scotland Colin, I think Gail wants to come in on the back of that to ask where the gaps are not necessarily on 4G but where the gaps of mobile connection are and what's being done about that so I'll let Gail ask that question she won't be surprised to know that in some areas of my constituency you can't get a mobile phone signal full stop let alone 2, 3 or 4G would be absolutely fantastic and I'm sure it's the same for quite a lot of people who want me to ask when are they going to get a mobile phone signal full stop so that specifically I'll ask you to, as this is budget to say is there money set aside within the budget to help ensure that that happens I'm sorry I mean there is money we've done the figures we said the only contractual commitment in the budget from the 112 points in the budget from the 112.1 million was the 20.9 commitment to the digital superfast programme so that additional money is available for a combination of building the 100% overall broadband and for mobile there are two separate procurements that are required to deliver those two strategies one of those is around mobile infill and so yes in that sense money is available to improve and to fill in mobile coverage across Scotland where I can offer a particular commitment to your constituents in every place I mean I'll have to come back and look at when we develop the planning and do it at that stage but there is money that will be available to improve mobile signals across Scotland John, there's another important aspect that hasn't been raised and I think it's important just to mention and I picked this up from meetings with a number of operators is that the more people that will use mobile signal be the more take up of signal in cities the more is the propensity and likelihood in future years there will need to be an enhancement of the existing signal in other words you can't just assume that Glasgow has got its signal and everything is fine because more and more people are using mobile the signal is therefore being kind of used up and therefore we shouldn't think of it that it is purely a matter for rural gaps may well occur because of the massive increase in uptake in mobile devices and therefore this is a dynamic I mean I'm not a technical expert to a convener but this is a dynamic area and in substantial meetings with mobile operators there are many aspects other aspects as well that we need to bear in mind for those that represent urban constituencies Cabinet Secretary thank you for that can I go back to Colin to give Gail an assurance that everyone in Caithness will have mobile signal I think what I said was we're developing a plan for infilling of mobile that plan will look at individual areas and I'm sure that Caithness will be part of that planning I'm trying to drill you down and ask you have you a figure within the budget in mind to allow infilling to be done during the course of this year being asked to look at as a committee the budget figure I know it won't all be spent in Caithness I think it will South London and Ross will get the balance I'm sure there'll be due consideration given to those areas of the country now at the moment I think the precise allocation of budget between mobile and building the fibre infrastructure for really is subject to the completion of open market reviews and the development of those procurement exercises but we are confident that we have made the overall allocation to enable those two programmes to go ahead in the way in which they need to go ahead You're not going to answer my question which may be wise but John I think you're next We've spent a lot of time talking about physical infrastructure and clearly that's important but figures we've seen are that of households with incomes over 40,000 on internet access whereas with households with incomes under 15,000 only 60% have on internet access is there something in the budget that can help to address that A college you want to go with that? I could because I think this is at the heart of our efforts to promote digital participation and comes under the responsibility of Ms Hyslop as cabinet secretary and I do think we've made previous committees have acknowledged this tremendous progress in developing basic digital skills across Scotland to the point where we now have the highest level of basic digital skills of any nations of these islands so I think it's a really good positive story and I think the work that's being done in communities through Scottish Council for Voluntary Organisations and members of the digital participation charter really have an exemplar of how you should approach this particular issue clearly and members of the committee will know that the Government has committed to refreshing its digital strategy probably in February this year and I think that issue the whole issue of participation will feature very heavily within that because securing the benefits of this connectivity whether it be for homes or for businesses or for farmers as we've heard today is absolutely at the heart of why we make these investments Is home internet access seen as a priority given that phones can do more and more? I think it's a if I may I think it's to a certain extent it's a slightly false distinction because the kind of devices that are used are so variable and they're so varied so yes a lot of people are accessing broadband or accessing the internet via tablets and mobile devices but you still need a degree of fibre in the ground a spine upon which that should develop and as we go forward that's actually the approach we're taking we put a spine of fibre into the ground that provides the backhaul that supports mobile, it'll enable us to prepare for 5G and all those technologies that are coming down the line we understand there are plans to separate open reach from BT which might increase competition would that have any impact on all of this will that help? The proposals from Ofcom in their strategic review of digital communications had initial recommendations published in February and they found that open reach still has an incentive to make decisions the interests of BT rather than BT's competitors that can lead to competition problems so you know plainly at a very high level I think the finding was that this is bad for competition it needs to be opened up by opening it up the way that we have more fierce competition and lower prices and therefore access to for those on lower incomes becomes better in a market that's working properly so you know we welcome that aspect of the Ofcom regulation it's at a very high level but I think the intention of stimulating more competition is a good one and you know there aren't that many mobile operators either and BT's just purchased another one of them so we work with all the operators but we do as a government as Mr Cook has said want to see digital access not being excluded to those who are on lower incomes and there's also another aspect which we do also believe that there should be an extension to tackle a palpable gender gap in ICT subjects and careers and the Gender Action Group has launched an action plan just last month to focus our actions on young women in education and those already in or looking to return to the labour market and I think that's something that we shouldn't lose sight of as well I know it's perhaps not directly relevant to the analysis of the budget today but I hope all members would agree that's a worthwhile project Okay leave that there Stuart's got a very quick question Can we move on to transport cabinet secretary? It's just in relation to 5G The hardware standards for 5G are now established but software standards are not yet established The speed for 5G the thinking of 1 gigabit in cities but 100 meg in rural areas and they're talking about the first practical trials deployments being in 12 to 18 months I really just would seek to ask the Government whether they might consider contributing some funds from the budget to ensure that one of the early trials of 5G is in a rural area so that the putative speeds that come from 5G can be tested in the real world and therefore the design of the contracts in the real spectrum that UK Government will be responsible for properly reflects the needs that we have because 5G is still a bit of a moving target at the moment and I think if we're in and helping understand it and a yes could be the answer Cabinet secretary if I could a yes or no answer would be very helpful because we've got a lot of questions we're going to move on thank you for the brevity of your answer we're going to move on to transport and John Finnie is going to leave with a question on that if you may please Good morning Cabinet secretary the Scottish Government has a laudable vision of 10 per cent of everyday journeys to be made by bicycle by 2020 I told it currently sits at 1.5 per cent having been a 1 per cent for over a decade there's mixed news in the budget the cycling, walking and safer streets budget goes up from 5.9 million this year to 7.4 million however this is offset by a reduction in support for sustainable and active travel line budget and that will see the share of the transport budget fall from 1.8 per cent to 1.6 per cent a fall of 6 per cent at the same time the motorways and trunk roads budget goes up by 146 million an increase of 18 per cent why is there no increase in the active travel budget well we do a value active travel on we've invested pretty substantially as Mr Finnie knows over one billion a year in public and sustainable transport to encourage people on to public transport and active travel mode so we're continuing the future transport fund which currently supports the development of priority cycling active travel infrastructure projects working with local authorities we're continuing with projects to accelerate the widespread adoption of low-carbon vehicles I alluded to that in my opening remarks including the charge place Scotland network of electric vehicle charging points also the purchase of low emission buses through the green bus fund and encouraging the transfer of freight compared to 2013-14 convener we have increased investment in active travel by over 80 per cent it was down at 21.35 million in 2013-14 to 39.2 million in each of the last three years and to answer the question directly we plan to match this in 2017-18 in line with our programme for government commitment to match record levels of funding for active travel for the duration of this Parliament I do understand that Mr Finnie urges us to go further and that's absolutely understood and understand where he's coming from in that regard but I think kind of matching the funding is a solid sign of our continuing commitment and the implementation of our programme for government commitments John, do you want to follow up? Yes, if I may that's all good Cabinet Secretary the comments about increasing public transport use and the green buses and the electric travel points but nonetheless we still have the situation where for support for sustainable and active travel is down where does that how does that contribute to reaching this vision? I'm not sure that's correct but perhaps Mr Baxter who's working in this field can just confirm if I was correct and I obviously don't want to correct information to the committee Mr Baxter perhaps The sustainable and active travel totality of it is made up across a number of budget lines so whilst the sustainable and active travel level 3 figure is down there are other components of the transport budget that counteract that the overall commitment to maintain 39.2 million remains within the 17-18 budget it's just presentational and I'm more than happy to provide that detail to the committee to demonstrate that There is a view Cabinet Secretary that in relation to issues like climate change obesity and other there's a lot of people who would come in you would imagine and perhaps describe as the usual suspects stock climate chaos and spokes talking about a move to 10 per cent of the transport budget going to active travel we're way short of that is that part of any of the vision of the Scottish Government to move to an increasing percentage of the transport budget because of course that's clearly offset with a significant increase an 18 per cent increase in the motorways and trunk roads budget I think it's fair just to remind the committee that we are investing a billion over a billion a year in public and sustainable transport we do make very substantial investment in our railways and rightly so we're seeing more capital investment in the railways than for a very long time we're seeing improvements from Glasgow to Edinburgh with substantial substantial improvements from Inverness Mr Finney's hometown to Glasgow and Edinburgh with the target of reaching two hours 45 minutes in due course and matching the roads in other words, you know, these investments are designed to attract people onto the train over time with an hourly service from Inverness being the ambition aimed for and very substantial investment in the Highland Mainline to Aberdeen and just recently because Mr Ross's constituency is really at the forefront of our mind today the Far North line is the subject of a review group which I announced I think last Friday so that those working in the peatland restoration will be able to be accommodated and the train to work and be able to have a signal on the mobile phone to boot she's pointing out so without being flippant we are making a very substantial investment in these matters as I think Mr Finney knows but I quite understand that he will always put the case to do more and we always want to work with him and his colleagues to study what more we can do John, if you want a very brief follow up I mean, it's absolutely fair to record that these are commendable efforts with regard to the enhancement of the honourable and that's appreciated but it was specifically on cycling and walking where there is some good news in our part of the world Cabinet Secretary, it's second in the first cycle use at 6.1 per cent so there are been some positive initiatives specifically in cycling and walking it's felt that there's a lot more to be done Fair enough we'll take that point away Richard, do you want to come in on the act of travel? Welcome Mr Baxter, confirmer and I'm looking at page 28 support for bus services actually went up to 50.7 million to 54.2 million an increase of 6.9 per cent and can I remind first agree with my colleague in some areas that the new M8M74 upgrade has cycle and walking routes extensively added in I think your point is well made Richard and maybe if you're happy Cabinet Secretary I could leave that one there just because we have got a few questions to go through Sorry, have I misunderstood something I think we've been here for an hour and a half allotted and I have other commitments to do Sorry, we have other We're over a short time obviously I want to be accommodated that's why 90 minutes was allocated but we have been here as I understand it for the allocated time and I have another engagement I don't think we got a formally notification of your timings and I thought that the committee was going to go on Are you saying that you are unable to continue Well I believe I have another engagement to attend but my understanding was that the agreed allocated time was a full 90 minutes which is 30 minutes more than the previous administration ministers used to devote to these committee meetings so far as I recall but I could be wrong about that but I had thought that we agreed 10 to 1130 but I'm not involved in these discussions my perhaps the clerk could just confirm if that's the case I'm very happy for you to say the position Can I just say that that was an indication given to your office there was no indication you had a further engagement after this to the convener I haven't been working on the fact that you had to cut away We've obviously then been working to disadvantage but I have got a whole string of other engagements including a ministerial statement and several meetings that are very important so my understanding was that I was here for the full 90 minutes convener but not in the extension of that so I'm very happy of course to answer very quickly Maybe we could limit those to three questions if I may and I'd like to ask Rhaedda to go first on Ferris Thank you there is an increase in the Clyde and Hebrides ferry budget and I was wondering what that was about but also in the Northern Isles ferry service I understand there's a commitment to look at decreasing fares but there's no increase in the budget corresponding to that I think it was 11 points Mr Baxter will answer that Can I take the first point just in terms of support for ferry services which actually covers the Clyde and Hebrides ferry service Northern Isles in Gerdinun in terms of the totality of that budget and respect to the increase there are four components to it one is the rebasing of the CHIFS 2 contract I'm given when the tender was prepared that was based on 2015 timetables because of movements between the timetable in 2015 and the current position that effectively needs to be adjusted for in terms of the tender price in terms of service development there's an uplift in the development of smart ticketing for use on the CHIFS CHIFS 2 contract which will be taken forward in conjunction with Transport Scotland and in terms of the Northern Isles ferry services there's an uplift for CPI just inflationary uplift in terms of the Northern Isles contract and the last element which was dealt with as an in-year pressure relates to the contribution towards the funding of the CHIFS pension arrangements so that's the components of the uplift on ferries but there is no money set aside for a reduction in fares for the Northern Isles not at this point but discussions are on going with regard to the options for that because clearly a straight application of RET wouldn't be appropriate in terms of the Northern Isles so that works continue two very quick questions with quick answers Stewart Stevenson on concessionary fares the concessionary fare budget is down by 9.5 million could the cabinet secretary confirm that this is no effect on concessionary card holders ability to use the bus network well I think Mr Baxter has got the detail of that I mean I can say that there has been a substantial variance between the estimated cost in total at the beginning of the year of the concessionary travel commitments and the out turn has very often been very substantially less than the estimate for very obvious reasons that it's not known at the start of the year what the uptake and the usage of an open-ended scheme will be so the budgeting of this is very difficult and the negotiations are very delicate obviously our job is to get the best result that we can but perhaps Mr Baxter could elucidate on the process regarding that discussion which I think is on-going with the confederation of passenger transport might yeah that's correct the reimbursement rates are currently being negotiated for next year the point that cabinet secretary makes is absolutely right in the sense that historically the budget line for concessionary travel underspent and the budget for the bus services operators grant which is previously referred to was overspent and the two things balanced off so there's been an adjustment to the budget to reflect the actual demand uptake which for the current year the out turns actually projected to be in the order of 195 million for this year covering the older persons and disabled young people's elements of the scheme and there's been an adjustment for that regard and there is reference in the programme for government a commitment to consult and that will be done early next year around the future sustainability of the scheme just very concisely the budget provision leaves short of the consultation which in another matter the entitlement for card hold is unchanged for those that have them yes that's fine and at this stage is rich on presswick airport since government sector has other items to do I'll be brief I welcome the increase in funding for other other air services up to 2.8 million to support additional lifelines to barra, cambleton and Tyree and route development and connectivity in regard to presswick airport I support and presswick airport is very underutilised I know it does a lot of freight but it's an excellent airport I was there a couple of weeks ago collecting my daughter and I think it's an airport that could be used what other work could we do to increase the use of presswick airport Mike? I just condense that because I'm mindful of the cabinet secretary and I would like to try to say that I think there was loan funding in the budget of 9.4 million that's correct and the question was well I think that's the question that we're looking for an answer for is that sufficient to allow the development of presswick airport along the lines of Richard that Richard is indicating the degree of loan funding included within the budget is reflective of what's in presswick's business plan so that's a consequence of that because of that money you're actually developing we're on the board you're going to try to develop it more a simple yes or no thank you presswick airport is extremely important to us and that's why we're investing heavily in it and working extremely hard with the management in order to develop it successfully over the years it's not an easy thing but Mr Lyle and the committee members should be assured that it's an extremely important matter for us thank you I'd like to thank you and your officials for coming today we have no indication that your timetable was so tight as an observation in future years an hour and a half to scrutinise the budget which is effectively all we have between Christmas when the budget was laid and when the report has to be started to be looked at is incredibly tight and I certainly will be pushing the clerks to allow for more time and more time in the budget so that the committee can have a full chance to answer all the questions but I would like to thank you for coming and wondering if you wanted to make a brief closing statement before you have to dash off I enjoyed the meeting thank you thank you can I wish you and your officials a happy Christmas and thank you for attending to the committee there will be a beef pause while I suspend the meeting to allow the witnesses to leave the room, thank you the third item on the agenda so I should like to reconvene the meeting the third item on the agenda is consideration of three negative instruments as detailed on the agenda this is a package of instruments which introduce a decriminalised parking regime within East Lothian council area following previous consideration of decriminalised parking restrictions in the Highland council area the committee requested further information on the income and expenditure resulting from the implementation of such schemes in other local authority areas this response can be found on the agenda the committee would now consider the issues that it wishes to raise in reporting to these instruments to the parliament members should note that no motions to a null have been received in relation to these instruments I would invite comments from the members are there any comments from the members is the committee then agreed that it does not wish to make any recommendation in relation to these instruments that is agreed that therefore concludes the public part of today's meeting I will now suspend the meeting to allow the committee to move into private session thank you