Good morning, everyone, and welcome to the 25th meeting of the Rural Affairs, Islands and Natural Environment Committee in 2022. I'd like all those using electronic devices to switch them to silent. Our main item of business today is an evidence session with island local authority representatives and then the Scottish Futures Trust as part of our pre-budget scrutiny. I welcome to the meeting our first panel, all of whom are appearing virtually. We have Russell McCutcheon, as the Executive Director for Place in North Ayrshire Council. Pippa Milne, the Chief Executive from Argyll and Bute Council, and Gareth Waterson, the Corporate Director of Enterprise and Sustainable Regeneration from Orkney Island Council. We have about 90 minutes for questions from the table here, and I will kick off. What would be helpful is some further information about the successful bids in your own specific areas and what happens to these projects, which were unsuccessful in securing funding. I'll kick off with Russell. Thanks, chair. With regard to North Ayrshire Council's bids, we were elected to be successful with both bids that we made in 2022-23. Those were existing priority projects identified through our local islands plans and also our regeneration delivery plan and the visitor management plan that we have. The projects could be really summarised as being one was for Milport Town Hall, which was a phase 2 of a larger project. The project value was £0.5 million, and we were successful in achieving £0.465 million grant towards the next phase of the redevelopment of that town hall. This will include an office space, basement heritage and conservation centre, plus a green room, a permanent men's shed, storage areas and small community garden. The second project that we were successful in was we called it an island pit stops, with a project value of £0.6 million and a grant of £0.54 million towards that. Essentially, to redevelop island toilet buildings borne by North Ayrshire Council into pit stops, bids will be refurbished into eco-design buildings with landscaped outdoor spaces that offer communities and visitors access to sustainable and efficient amenities, including improved toilet facilities, local information and interpretation, cycle parking and maintenance stations. The phase 1 of Milport Town Hall project had already been part funded by the regeneration capital grant fund of our RCGF. Additional allocations have also been provided under the RCGF to support the increasing costs associated with Covid, the current economic position and previously unforeseen works associated with historic buildings. That funding will also be used to support the delivery of phase 2. The island pit stops was previously submitted to rural tourism infrastructure fund and was then refreshed for submission to the island's programme and basically informed by our island plans and visitor management plans. It is fair to say that those projects aim to make an important contribution to delivering on priority actions within Arran and Cumbra as it outlined in our local islands plans, which have been developed alongside our island communities to support economic recovery in longer-term sustainability of island life. It is fair to say that those two islands are really relying on the visitor economy and the works that we are undertaking to support and contribute to an enhanced visitor experience are estimated to have a significant impact on the local economy of the island. As I said, we had no unsuccessful projects in 2022-23. Obviously, that position could have been significantly different. It is fair to say that the approach taken to unsuccessful projects would have been dependent on the scale and delivery timescale involved. Consideration would have been given to other funding sources to support delivery due to the relatively limited capital and revenue budgets that are available. For example, we have the Ayrshire Rural and Islands ambition of area fund as part of the community-led local development. We will get shared prosperity fund and the council also has a community investment fund. The community investment fund is available to localities in North Ayrshire to make bids in order to support local community actions and community projects. Those are determined by locality planning partnerships in terms of their viability and whether they would meet the criteria set out there. I do not know whether you want me to go into any further detail, chair or whether that is sufficient for the moment. That is very useful. Thank you very much. I can now move on to Pippa Melham. Thank you, chair. As I said, four bids for the fund totaling just over £1 million. We were only successful with two bids to a value of £350,000. The two successful projects were the Tobermory Sea Wall and Railings project. The project addressed some of the coastal flooding and to upgrade that asset of the railings. It protects the road along the front in Tobermory and therefore businesses that operate along the front. That project had been partially completed and the funding of £250,000 for the project will enable us to complete the main job of the sea wall and railings that protect economic activity and transport infrastructure and making the island more resilient to the impacts of climate change. The second that was successful was the island community holes digital hubs. That was to be in my learner, Irene Cole, to a value of £100,000 that would effectively give them video conferencing facilities. That is following about from communities that operate on a hybrid basis and also enable those holes to host near me services from national health service as well as allowing local community members to use the infrastructure if they are not able to get internet access in the home. We had two unsuccessful projects. One was Ireland's airport resilience and sustainability project, which is to create airfields on coal and colonse and we bid for £300,000 to upgrade the facilities. Part of that was to enable crews to undertake work themselves and to undertake training on the island, making it easier for them to maintain their qualifications to operate airfields and to go off the island, and that makes it more resilient services. The other was the caribou project, which was a bid that supported the community to draft. It is putting the road to the north of the island to join the north to the ferry port. The project had already received some funding, both from the island's team and from the council, and this was to enable the ranger of the work to be completed. In terms of those two projects, the caribou project and the community intend to go forward at a lower spec and complete the road. The island's airport resilience and sustainability project will wait for further funding opportunities that will not be able to take forward without that funding at this time. I am happy to provide more information if there is anything else that you want to add. Thank you for that. I have a quick question before we move on to Gareth. The flood prevention in Tobamory, was this the most appropriate or the only source of funding that you could use for that? We hear of other communities throughout Scotland that will get flood prevention money for schemes that they have drawn up from other sources of or pots of money. Was that the most appropriate or the only source of funding that you could get for flood prevention? Tobamory had not been identified as a flood protection area that was liable to have a plan under the flood money, so that was at the time seen as the most appropriate route for funding. As I said, we had only partially completed before, so we were constantly on the lookout for funding to try to complete the project, and that flood money was not available to us. Gareth Watterson Thanks, chair and committee. Orkney had one application to the island's infrastructure fund, and that was for a new curve called nursery. That was a project of £2.5 million total cost, and we were successful in being awarded £1.5 million towards the project. The nursery is for a 51-place nursery adjacent to Orkney college, and it will be built to care inspectorate design guidance and passive house standards. It is a 542-square metre new build just below the Orkney college. The project was in a good stage of development when the opportunity to apply for island's infrastructure funding came along. We were fortuitous that we had a project that was worked up to a suitable stage that we were able to get into the application process. As I said, we only had one application, and had we not been successful, it would have clearly delayed the project in going forward. The project seemed to fit very well with the application guidance, and that was very fortuitous for us that we had a project at that stage. It will enable market failure to be addressed. In Orkney, we had market failure in the childcare sector. There was only one private nursery operating previously, and that had closed. We are in a number of other things that, if we have market failure on elderly care, for example, there is no private sector provision of elderly care. The council had stepped in to run on a temporary basis. We hope that private facilities when it closed. We have seen a shortage of childminders. People have not been operating in that field of late. Across the community, people have struggled to get childcare, so I think that the project will address the provision of childcare for the mainland. We have about 180 children born every year, roughly in Orkney, and about 90 per cent of those, so 160-ish, would be on the Orkney mainland. The project will enable the college to have placements for childcare training within the facility because it is adjacent. We will also address that pressing childcare need that the council, the NHS, all need staff to be able to get childcare to allow people to come to work. I think that it fitted very well with the aims and objectives of the fund. I am happy to answer any other questions on that project, chair. Thank you very much. We will move to further questions. Just to remind everybody, we have got about 15 or 20 questions to fit in, so if we could try and keep questions in the answers as succinct as possible, that would be helpful. That would certainly be a good introduction. I thank the panel for joining us this morning and also the very full submissions that you gave to our letter. I am interested in hearing your views on the benefits and the challenges in this year's competitive process in comparison to direct allocations in the previous years. I am interested to know how that compares with how the council would allocate its own funds to specific island projects, and perhaps if there is anything that the Scottish Government can learn from how you operate. Russell, if I come to you first, please. Thank you for that question. To be absolutely honest, the key benefit to North Ayrshire Council this year in relation to the competitive bidding versus the direct awards in the previous allocations was the amount of investment that we were able to achieve. The key benefits were that this year, 2022-23, we secured substantially larger awards just totally and short of £1.05 million compared to that in the island investment fund, based on 80 per cent population, 20 per cent road length. Last year, we got £259,000, so simply the prioritisation of the monies towards the outcomes that were being required allowed us to have particular success this year. The difficulties that we have with competitive bidding processes are the time and resources that are required to achieve success. It is not always the case that the input and efforts that are made in submitting bid applications compared to the process do not necessarily correlate to the level of success that you have. There is the potential for a lot of time and effort going into submitting bids and then not having that level of success, so it would not be proper for me to say that North Ayrshire Council preferred the competitive bidding process because we could have foreseeably not had the same level of success as we have achieved. Some of the issues that we have around submitting competitive bids in particular this year are possibly worth the local elections, but when the competitive process was announced in March 2022, the first opportunity that we had for our local cabinet to consider potential applications was June. That was particularly related to the fact that we were setting up new council structures and what not as arising from the elections, but the June cabinet was within days of the submission deadline, so it was quite frantic in terms of the timescales that we had to adhere to. With regard to the timescales, the timescales for the production and submission of applications can be relatively short-scale for the expenditure financial commitment of the award. It is quite tight. For example, the Islands infrastructure fund with awards in December 2021 requires financial commitment by March 2022. It has to be pointed out that on islands, contractors and mobilising projects can be very weather-dependent and very seasonal in terms of availability. Therefore, some cognisance of the challenges of living on islands and mobilising projects would be relatively well received as well. With regard to whether or not the issue would prefer or not prefer a competitive bidding process, it would be fair to say that we would probably not prefer competitive bidding processes but a more allocations process that would be calculated on the basis of need and support in longer-term objectives for localities, including things such as reduction in poverty and inequality, creating fair jobs and tackling climate change. We did some calculations around the apportionment methodology. Population-only, we would have gained about 6 per cent, and on a £5 million budget, there have been £300,000. Place-based investment programme-type allocations, which is based on population and also levels of deprivation, would get slightly more around £350,000 or 7 per cent. However, the 80 per cent population and 20 per cent road length, we would achieve about 5.18 per cent, which, as I said, was £259,000. It is very difficult to give a definitive answer coming from a position of success, but it is acknowledged that that would not always be the case. That is very helpful, Russell. Thank you. Pippa, your thoughts on the process and how it compares with how Argyllinbuke Council allocates its own funding to islands? Yes, thanks for that question. We made it clear when this was first mooted that we didn't support the bidding process. We find increasingly that the time required for these processes and the limited capacity that we have, especially with the sums involved with this fund, make it very resource-intensive. We obviously were less successful this time with the bidding process. We got less than half that we did in the previous year on an allocated process. Only 15 per cent of our bids were successful. If we look at that in terms of resource and value for money, that would seem to be a non-efficient process, as well as the question of whether the capacity that it took up for Scottish Futures Trust added value to our own processes could have been better deployed. We also have a question around the assertions that we have been given, both verbally and in writing, that the fund would be distributed deeply over the life of the programmed islands and when that has been done as a competitive process. For us, it is particularly difficult when we have 23 islands spreading the funding across all those when we are limited to five bids. We have worked strongly with SFT advisers and we thank them for that. We would not have continued with the bids if we did not believe that they would be successful. There is always the worry when you are dealing with a bid fund that, at some point, it becomes a pretty creative, limited pot of money, which can lead to abortive effort. We work well with things such as the fund estate funding and place-based investment, working with our elected members and communities to determine where that funding goes. Previously, we had more scope to join up that funding and spread it more widely across a wider range of islands. I think that it was seven or eight that we were able to cover with the last fund. Even if we were 100 per cent successful on this occasion, we would not have been able to do being limited to the five bids. We are certainly accepting similar points that North Ayrshire raised that any allocation is difficult to come up with a perfect methodology for the distribution, but our preference would still be for that in terms of the efficiency of being able to deploy our resource. We would also benefit from having a longer-term view of the likely funding. Similar to North Ayrshire's point, in my mind, it is the £30 million fund over five years. If we have been able to give indication of allocation over the five years and look at ways in which we could manage the smoothing of that, we could make a much more strategic view of investment over the entire programme. It is also easier to communicate with our island communities who may not be in the earlier rounds as to where they might fit in a whole programme of activity for that. That would enable us to join up and match funds with other funds more easily. As soon as you start to take multiple funds and they are all on a set timescale of different criteria, it gets very difficult to try to join them up and match them. I would also echo North Ayrshire's point about the timing, the fact that it fell at that particular point at the end of council terms. In the fallow period, before we were able to have new meetings, that caused an issue of that local involvement. The other bit was the issue around the assessment panel being remote from the islands. I think that that is a question about how that sits within the spirit of the islands act in terms of giving them empowerment over how that spend is deployed. That caused some sort of concern in terms of whether that was really enabling them to determine priorities. I suppose that it just really highlights now the importance, if this is the way that it continues of making sure that the local councillors have good connections in with their island communities within their wards. I do not know, Gareth. We have had very full answers from both Pipa and Russell, so I wonder if you have anything to add to what they have said. I think that very little additional I would echo much of what was said, that the ability to have a longer-term view would allow us to plan more strategically. The very short timescales that we were given, particularly in the first year of the funding allocation, meant that we had to really try hard and we were effectively buying things, rather than planning for the longer-term infrastructure-type investment, just because of the short timescale. Having a longer-term view and an allocation, we would also prefer, despite being successful on the bidding process, having that certainty to be able to plan better over a longer period would be really appreciated. Allowing us to deliver better for our communities, just like all budget processes, having a longer-term site of what you have got coming would give you that ability to get a better result for the communities, so not really much more to add and to echo an awful lot of the points that have been made there. It is a supplementary for Pippa. You talked about the complexity and the pressure on resource. I wondered if there was a way that you could feed in those things, so that you could shape the next submitting of the bids in terms of the simplification and a less complex solution to that. Do you have that opportunity? If you did, what would you say? This time around, there was some engagement with the island team in advance, and certainly weeks of youth, we would prefer an allocation price and that longer-term view. We would have expected this to pick up islands group, which is tasked with overseeing the implementation of the plan for some discussion, but it was announced before that meeting in the same week, but before that meeting. Certainly, we would give similar feedback that I have given to you today. I do not know how much opportunity we will have to shape that in light of what our experience was in trying to influence that round. Certainly, the feedback that we had was that they would try to align it to the regional capital balance scheme, but I think that we would still be concerned given the sums involved and all the issues that all of us have given in evidence for the amounts. That is still quite a time-consuming process, especially in a new fund where you do not know what the panel's views are. It is difficult to refine your bids in a helpful way. We would much prefer to go down the route of Crown Estate and play-based funding, where we have well-established principles of being able to still apply criteria and allow for scrutiny of that, but we have that local decision making. Just before we move on, I have a quick question. Is the capacity within each individual local authority considered as part of the bid process? It sounds like Argyll and Bute might have had capacity issues in terms of resources available to submit a competitive bid, and I feel that that might be the same situation with other local authorities. Is there any consideration given to that as part of the competitive process? The space is an issue for all local authorities as our resources are getting tighter. For us, it was at the same time that we were working on levelling up funding and still progressing our regional growth deal. That puts pressure on the same team that is then trying to bid for those funds and preparing investment plans for shared prosperity. I would expect that most councils to varying degrees have the same pressures. It is probably a question for civil servants and SFTs of whether they gave consideration to that in any way. I was interested to know what the local authority perspective is on the criteria that was used to assess bids by the investment panel and how easy it is to operate and how fair it is to process. I might address that first, perhaps, to North Ayrshire for no particular reason, I should add. Sorry for the delay there. I was muting for my mic to be unmuted automatically there, but I did it myself. Thank you very much for that question. The Eiland programme approach for 2223 was really quite comparable to the stage 2 process for other Scottish Government funding programmes, including the regeneration capital grant fund and the vacant and derelict land investment programme. Overall, the process appears to have been well managed by SFTs and clear guidance and application documentation is available to us, so I have no adverse comments to make with regards to that particular aspect. I wonder if any of you could say a bit more about what the perspective of the community was on this. Did communities feel that the process of application was user-friendly? Were they supported in it? What were the options for support? If I can go to one of the other local authorities, Pippa Millan or Gareth Waterson, I would want to come in on that. I am happy to come in partly in terms of the process as well, if I can. I suppose our feeling was that the criteria were quite broad, so a lot of things could fit in with them. As I mentioned, the regional capital grant scheme, we understand the panel and what they are looking for and so do the support team. It was less clear to us on this one. We were not cited on the project, but we were ultimately given to the project. We were asked for some additional information in relation to some and not others, and yet those others were scored down. We were fed back that they were unsuccessful because of the lack of data, so we have been left a bit confused about that part of the process and how it worked. In terms of communities, it is probably mixed in that we have largely led on creating the bid process, so communities themselves are slightly insulated from that, apart from carers who worked quite hard on the bid and obviously were unsuccessful on that. For community organisations, that is a lot of time and effort to put in to be unsuccessful when people giving their time would be the feedback that they would give. What was the experience of communities in Orkney in terms of their involvement? The project had come forward with a petition from the community and people who were looking for childcare asking the council to do something. The community had come forward with the project and that was then applied to the islands infrastructure fund process. It was not really that we were going to the community with the criteria for the application, it was that the community had come to the council with, this is a project that we think that the council should be taking forward and really it met the criteria particularly well. Because it was a construction project, we were in that fortunate position that we had started to look at it. We had engaged with the community planning partnership, so they had endorsed the project at that stage before we made the application. It was almost the other way around that the project was being taken to us by the community saying, we want you to do something, we need this. The application process was there for us to complete. In the back of that, if I could come back to Russell, it sounded very much like the Orkney Islands Council. It was grass roots led and that is what developed a lot the thinking behind the project. How did that happen in North Ayrshire Council? Was it a call for projects or how were they identified, the projects that you took forward? Thanks, chair. With regards to the two projects, the second project that I articulated was the Millport Town Hall project. That has already been a significant £3 million overall investment and the bid for stage 2 was a successful bid for this particular fund that we are talking about today. That was clearly a well-oiled machine in terms of the community taking forward their aspirations for that town hall building. That was one that very much came to us. The second project was in relation to pitstops. We had a community involvement into what we call a visitor management plan for Cumbria and Farraran and the community was consulted on the various aspects of that. That was another project that came out of that proposal, that visitor management plan. It is very much grass roots level coming to the council. I would say that it is probably more project-based rather than criterion-based, so it is a matter of the projects that communities are galvanised around and keen to take forward with support from the local authority. The role is to fit those projects into whatever funding is appropriate and suitable at that given time. With a more allocated approach to the fund, the competitive aspect would be taken away, but local governance arrangements around place-based investment programmes are already in place and they operate well in terms of money being allocated to projects. I would imagine that the community-led and grass-roots-based approach to that would continue. Obviously, it would be wrong of me not to confirm that we in North Ayrshire have an on-going pilot with the Scottish Government and Highlands and Islands Enterprise around island recovery and renewal, which sees us as joint fund as senior officer for the islands. That role is very important within North Ayrshire, with Scottish Government officials and Highlands and Islands Enterprise, but it is important to work with local communities. That role has also been instrumental in the creation of our 10-year island plans for Cumbria and Arran. Those plans are basically outlining a place-based investment approach to the economic recovery of the islands. Those plans are heavily fed into by local communities. In terms of evidence and information and knowledge on what local island communities are striving to achieve, we have that in abundance. It is very much grass-roots towards the council and then us assisting. It is important that, in terms of island capacity, there is a need for island-specific revenue funding, for capacity building and project delivery staff to improve and assist infrastructure and capital delivery, specifically via statutory and public bodies such as the council and Eleville to apply for the island programme streams areas such as the island community fund, for example, in order to build that capacity. We are going to develop that a little bit further on the community engagement question from Arrianne Burgess. I just want to say that it is fantastic to hear the projects that you did get funding for, and I am sorry that other projects that were also important did not get funding for. I just want to open the space a little more. I think that you have begun to touch on it, but we would like to hear a bit more about the impact of the competitive process on community engagement in the design and delivery of capital projects. I think that maybe, Gareth, you already said that your project was quite far on at that point, but maybe Pippa, you want to say a little bit more, or Russell, if you have something that you want to add? Thanks, chair. I suppose that, similar to Russell, we tend to see some of those projects develop and then look for appropriate funding. They have all been slightly different. If you take the Kerro Road, that was a long-held aspiration of the island community, and we supported them to develop that bid over a number of years at various stages. If you take the digital hubs, that has been post-Covid and very much come from community aspiration to see that come to fruition. The Tobremory railings was, again, a very strong local community view to see that asset improved and the flooding issues developed. Tobremory Harbour Association, a local community enterprise, were instrumental in that. If you take the airport bid, that was about communities being very strong on the outcomes of wanting to see that sustainable air service, and then that's applying some of the assessment of what the operational gaps were in that project to help to make that more of a reality. For those funds and the other ones that reallocate the funding, it comes from either our local elected members identifying projects or the on-going work that we do with community organisations that builds the awareness of those aspirations and projects, and then trying to match it rather than putting out a call for funding. Time scales are normally relatively short turnaround and then in-year delivery, so waiting until the fund comes and then put out a bidding round, essentially within the local area, would just make it undeliverable from the timescale point of view. Thanks. Thanks very much. Anyone else have anything to add? Okay, okay. We'll move on to a question from Karen Adam. Thank you, convener, and good morning to the panel. I'd like to start with Russell. We're hearing in Russell how North Ayrshire Council feel that the funding landscape is getting a bit cluttered. I was just wondering what are your views on that and what are the issues behind that comments. Thank you very much for the question. I think it's fair to say that as we've emerged and continue to emerge from Covid, there have been a significant amount of funds for business support, community support, place-based investment, place frameworks and all sorts of different mechanisms to access that funding, whereas we've also got the long-standing regeneration capital grant fund. I think that there is a confusion within how it's certainly saved within our own organisation as to the longevity of certain funding, the funding allocations that have been made and any longer-term approach to that would be much, much better strategically planned. I think that the islands fund, particularly being a five-year fund, gives us the ideal opportunity to start that proactive forward thinking instead of having annual competitive bids for that kind of funding. If we were able to then align that to our island plans and align it to our place-based investment programmes and other projects that we have coming from grassroots, as we've mentioned, it would be a lot easier to align that to known funding coming over the horizons, if we could have sight of that. I think that it's fair to say that as we do emerge out of Covid and we move further afield, further on, there will be further opportunity to more rationalise the areas of funding that are available. It's just the sheer amount and the different kinds of funding sources, even different terminology for the same similar funds and the amounts that are becoming available are sometimes difficult to interrogate exactly whether that is duplicate funding, whether it's funding that's been mentioned before or whether it's new funding. It is really quite difficult to just leave our way through that cluttered arena at the moment. That's really helpful. In your opinion, how do you feel that could be more streamlined and more strategic? Probably to a review of the funding available, a review of the amounts available, a review of the outcomes that are being delivered or determined through the available individual funding sources and some sort of amalgamation into lesser numbers of funds that are designed to achieve similar aims. Can I ask Pippa the same question? How does she feel about the funding streams? If I can give you an example just to highlight that, we've got an island project on butte, Rothsape Pavilion. It's under significant financial pressure at the moment it's been paused but it's currently subject to, I think, 14 different funding streams, all with different criteria, all that have to fund different elements of that project, all that have different timescales and reporting requirements. If you imagine complex capital projects, for example, and then you overlay that, it makes it exceedingly complex to try and pull all that together, to manage it, to get all the timing right, to pull together the funding that you need to deliver on that sort of project. I would echo North Ayrshire's points and that streamlining of amalgamating of funds would be a massive bonus and have a positive impact on our capacity. I agree that the effort that has to be put into the bidding process, and that has been touched on earlier, is quite resource intensive. In the council here, we've certainly been struggling for recruitment of staff. Over the last couple of years, we've seen a whole lot of people leaving the organisation, taking early retirement or doing other things, and actually getting people to come back in. For the bidding process for this year, it was a struggle because we had a shortage of internal staffing and we did engage some external assistance, which was really just caralling the internal resource into filling in the application, but that certainly helped us. It wasn't a huge consultancy, but we did have a small consultancy from Hub North, which effectively kept us to the timescale because it was with so many people juggling extra work. It was that resource of getting around to filling in the application form and putting it all together. We did get good assistance from the SFT, and I must say thanks again to my colleagues in Tyree for the SFT who did the telling us what we needed to do. In no uncertain terms, we've got very good advice from the SFT in saying that you need to look at the criteria for assessing the bids and where you absolutely need to put the effort into your application form. Our external timekeeping of getting the bids done by due dates so that they could then be reviewed and corrected or amended or additions made to the application was there. The resource that has to go into a bidding process is quite a lot of extra effort. If you've got that for every other team of funding, you're layering that one upon another. We're just embarking on our islands deal, which is jointly funded, UK and Scottish Government-funded. We can see that this is going to be a huge amount of work to get the elements of that project put together where there's a funding gap, and we will need to be targeting multiple different funding sources. That is going to be a real effort for all of the islands in that particular deal. It's not the ones on the call today, but there is quite a big funding gap that we've got to find. Unfortunately, the way our tender prices are going, we can see that that funding gap is going to be bigger because the cost of doing everything suddenly seems to have increased quite significantly just on the tenders that we've been having for other projects over the past two or three months. That's quite interesting, can you say that, Gareth? I'm really pleased to hear that there was that support there for that application process. Can I just pull on one of your points? Do you think that, looking forward, with the inflationary rises, that this is going to cause some issue for yourself and other authorities in regards to funding? What your application might be might not add up to what you need by the time it comes up. I'm absolutely certain that we are going to have those challenges. We've just had a housing project tender return that we thought we had got a sufficient budget there to do it. The tenders that have come in were quite significantly short or were quite over the budget. Material prices and labour, and just on speaking to—I happened to know a couple of the local contractors and they are struggling for workforce. I don't know if that's an island issue, but across the board there seems to be a national issue of less people in the workforce. We have actually got more jobs in Orkney than there are people to do them at the moment. If you're out of work in Orkney, it's not because you're looking for a job, there are jobs there. That's being reflected in the rates of pay that contractors are having to pay for labourers. The one contractor was bemoaning the fact that nobody wants to be a labourer. He can get people that are joiners or masons, but not enough of them. He said, but just trying to get somebody to be a labourer on a site is a real problem at the moment. Thanks, Gareth. I'll pass on. I think we're leading in other questions. What will we have moved on a bit? I've got Beatrice Wishart and Alasdair Allan wanting to expand on that. Can I ask Beatrice to ask her questions just now? I'm hearing what Gareth is saying this morning, and I can identify some of the issues from a Shetland perspective as well. I wonder if I could ask Pippa and Russell to give their views on the costs of living and price increases that can challenge the capital projects that you've identified and how that—Russell alluded earlier to weather and seasonal challenges in terms of the labour market and the impact of getting supplies in, so I wonder if you could expand a bit more on that. Russell, do you want to continue? Sorry about that. I'm happy to answer that question and thanks for raising it and bringing me in. The issues that we're experiencing with our own council's capital programme are stark. They are absolutely significant. The construction industry was quoting 20 per cent inflation as recently as four or five weeks ago. They have significant issues with workforce, significant issues with supply chain, and that is just further exacerbated with access on, on and off islands, particularly our islands in Arran and Cumbria. The issues are then filtering through into the tender prices and the bids that they are making for projects. They are becoming rightly so very risk averse. They are becoming extremely choosy in the type of projects that they are able to deliver and willing to deliver, and that is driving up costs significantly. We have not had any tender processes carried out over the last year that have not been significantly over the budgeted prices that we have. Those budgeted prices are being very carefully considered in the current context and in the current financial climate, so it is not that we are naively expecting to get a lot for our money at the current time. We are factoring in contingency and factoring in a number of other additional expenses, and even that is not proving to be enough. That is not just the case for islands. That is actually on North Ayrshire's mainland as well. It is really really difficult just now. The recent announcements around the borrowing prices and whatnot are going to further exacerbate that as well. The general economic situation that we are in at the current time is going to be extremely difficult, and we are only experiencing the tip of the iceberg at the current time. I would also say that the regeneration capital grant fund, which is also administered by the Scottish Government, takes cognisance of that. We have a number of projects that are on-going through that scheme on the mainland and on the island, and there is acknowledgement that the cost of living versus construction inflation versus various other things, additional funding has required to be made available for those projects to be delivered. We see cost inflation coming through on all our capital projects. It is more of a stream on islands than the availability of contractors. It is difficult, so often they will choose to take contracts either in the central belt or more easily accessible areas and not deal with the difficulties of transporting materials and staff etc to the islands. We only have limited contractors who are actually based in those areas. We see things like travel and fuel being 185 per cent and 70 per cent respectively higher than in urban UK areas. We see a shortage of available skills within the area, including the construction industry for getting staff to work on those contracts. We are seeing that in existing housing projects by way of example. The project that I mentioned on Compute earlier is paused because the contractor went bust during Covid, and that contract has now got an £11 million cost pressure on it because of the inflation that resulted from that event. It is a very real issue for us that we expect to have to scale back our capital programme in response to that. You have mentioned some of the issues around the cost of living and the cost of projects, which come in a wider context when the international monetary fund voices a notable alarm. You know that something has gone badly wrong. Specifically around contracts, I know that from my own experience in the constituency, projects or people who are running projects live in fear of re-tendering because of the issues around increase in costs, particularly building costs. I wonder if that was something that any of you had experienced in the course of this, where the cost of living and the cost of building actually created a new pressure around timescales for projects, many of which have been competing. We have had to re-tender several of our housing projects, not because of timescales, but because of the budget. I think that our increase in our own budget had not kept pace with the contractor's rate of inflation. I think that the lead times for materials that they were seeing were very reluctant to price. They gave a firm price for a project and hauled it because they said that, by the time they were going to deliver it, the cost of cement or wood could have increased significantly. We did have a period of trying to do that catch-up of trying to increase our budget but that you get governance over a budget and then you get a tender price in and it's higher and then you have to then go back to get further governance over your increased price. That has led to delays on a couple of our housing projects. I looked into whether we could bulk buy cement, which was something that was causing a real issue in the islands for a period, but apparently there is a plasticiser in cement that goes off, so you cannot store a big chunk of cement or a big warehouse load of cement for a long period of time. It has a bag of flour on a supermarket shelf that goes off, so something that used to be done in the islands was that there was a big lot of cement but there are additives that mean that that's not a viable option. I spoke to a local supplier about steel and the way that steel prices were going and they were only bringing in half loads of reinforcing rods on to Orkney for putting into steel because they said that they didn't really want to be sitting if steel prices went down with a whole lot of reinforcing that they had paid for at a higher price. That then leads to delays in the supply, so there are multiple issues at play and it's all to do with that uncertainty about what the future is going to be. Are there going to be easing up of supply and materials coming back when they used to be able to order stuff, get it delivered two or three days later? It's now that thing of planning for weeks ahead to get materials and it's amazing the number of things that I never knew were made in Ukraine that are apparently in short supply now because of the the travesty that's happened in that country. Thank you. Is anybody else got anything to add to Gareth's contribution? No. Okay, I move on to a question from Jenny Minto. Thank you, convener. That's just been a very, very sobering discussion there. I'm interested to hear how you as councils measure the impact of capital projects. What criteria do you use and how do you share this perhaps with communities for future bids and also how do you as councils learn from the criteria that you're using to judge your capital projects? Pippa, can I start with you? Yes. I suppose it varies on the scale of the project. We've done some significant regeneration projects where we'll do a baseline economic assessment and then we'll look to go back over a reasonable time and reassess the impact of it then to sort of smaller ones. So, if you look at the Topomori project that we've put in here in terms of capital, it's more around meeting the milestones of delivering that and how many businesses can be protected from the flood risk. So, it varies on different projects. I think it is challenging to some extent when you're looking at the economic impact because it's looking at long term and if we're looking at things like population and for a lot of our projects it's where there's market failure or the market's broken in that. So, you're almost trying to measure a negative in terms of or you're in the world of building the hope that it will come and other things will come off the back of it and it requires public sector to take that risk in that space. So, coming up with effective measures is actually quite difficult. So, we do try and share that learning with communities. We support them with our community development team to do that. We've had examples in the past where we've got different island communities together so that island organisations can share each other's experience on that. It's difficult to say that there's a sort of one-size-fits-all. We tend to look at it almost on a project-by-project basis would be my answer to that. Okay. Thank you, Pippa. Gareth, if you've got any views on how Orkney islands operate on it. We have a capital project appraisal process where we have—we're just trying to very, very quickly pull it up. I've got a version of it there on my screen, which is the 12 separate criteria that we use to assess our own internal projects one against another. That covers a number of things like whether it's a statutory provision was our first criteria and then whether it's meeting a corporate community planning goal, protecting existing assets, minimising capital costs, investment from external sources, et cetera. We've got a process that we would go through to—I suppose—a scarce resource and we're trying to get it into things that are in the council plan so that the ones that are the top priorities come out at the end. Unfortunately, what we seem to do is have a whole lot of exceptions that we have that process. Life happens and things go wrong, so whilst we have a process that we try to follow, there are other things that come in left field. Having been here a long time, I've probably seen more left field things coming in than the ones that have gone through the process, but we do have an agreed process to follow. That probably aligns relatively well with the criteria that we're following for the infrastructure fund, but life does happen. That's very helpful. Given that life does happen, you can always review what your steps are and criteria are for all those left field things that come in. Russell, have you got anything to add as to how North Ayrshire Apologies operates? Thank you for bringing me in. With regard to monitoring the impact of capital projects, it really does, as Pippa said, depend on the individual project, on what it's trying to achieve and what the scale and extent of that is. For example, we would look to monitor social outcomes, environmental outcomes and economic outcomes. That could be building construction with significant green metrics and carbon metrics. We would then easily measure the metrics that we would deliver after the project is completed. That would be one example, but there's a raft of terms that we would use in terms of monitoring and evaluation plans, value for money assessment. We do the original cost benefit analysis and we keep track on that. Benefits and realisation plans are clearly articulated in terms of the outset, what the benefits we are trying to achieve and then monitor those needs have to be smart and measurable. Social outcomes would include things like footfall into visitor centres, the local business update, local job numbers associated with a visitor centre and supply chain for visitor centres. As I said, it really does depend on the actual individual project, but there is an industry of ensuring that we get maximum value for money at the current time with our capital investment because it is so tight and the money is available and will have to be spent wisely. That's great. Thanks Russell, thank you. It's quite a simple question really. It's really about whether the ambitions of the island plan are being properly funded. We've talked about the stretch on funding, but I wondered whether you believed that the funding that was already available is just being almost regurgitated within the landscape of current funding. How does it look? Obviously, there are multiple strands of funding and we've heard today how difficult it is in terms of time and resource to get hold of that funding. In terms of your actual funding through the local government settlement, do you believe that some of the funds are over and above that or are being replaced by that? It's quite a complicated question, but I think that you probably know where I'm coming from. Can I ask Gareth, please, that question? For giving evidence today, I did have a look at the island's plan and the 13 objectives that are in there. The one that really stands out to me in my council area that we're really struggling with is ferry funding or funding for replacement ferries. We don't have anything within our existing local government settlement for vessel replacement. The sheer scale of the requirement to replace our 30-year-old fleet is much, much bigger than the whole of the funding that's available for the island's plan. The other objective of improving transport services with a little bit ferry beside it can only be at the very margins of what that ferry infrastructure is. You could look at waiting rooms and so on, but you couldn't do anything really on the vessel replacement. It's been an issue almost all of the time that I've been in the council here about what we're going to do to replace our vessels. I firmly believe that we need to have a national plan for a national fleet and have those efficiencies of all doing the same thing with similar engines and a regular programme for updating and replacement of vessels when the right time comes so that everybody in Scotland is treated the same. It's that ferries thing for me. No, I don't think that the budget that is available is anything like sufficient to address all of the objectives of the island's plan. It's woefully short, I would say. It's also very welcome that we've got something that authorities with islands can bend into for the things like the nursery. I don't think that that would have been another source of funding that would have suited as well for that project, but just the number of objectives that there are for the national island's plan, I think that it's almost woefully short of having sufficient funding to address all of those objectives in a meaningful way. Russell, in North Ayrshire, do you feel the same pinch on the requirement of the budgets that you have to allocate for the issues that the islanders need to allocate to most? Yeah, I would totally agree with Gareth's points, particularly around the ferries and the ferry service, so Arran and Cumbria are heavily reliant on the tourist economy. In fact, we actually got a piece of work done by the University of Strathclyde Fraser of Allander Institute to do an economic study of the impact of the ferry on the Arran community. Daggeringly, the ferry contributes £130,000 per day to Arran economy, so if the ferry is down for a week, it's almost depriving the Arran economy of about £1 million. I think that it's fair to say that transport, connectivity, jobs and housing on the islands are the key issues and areas that have to be addressed, and simply if the ferry service was more reliable and was more fit for purpose and more sustainable, the island would become a lot more self-sustaining, because every week the ferry provides about £1 million of economic impact on to the island, and that would self-replicate and get bigger and better through the wellbeing economy that we're trying to achieve on the island. For me, yes, absolutely the islands investment fund has been really, really good, really well received for the smaller projects. However, the macro picture is very much access, connectivity and population growth and housing. Russell, do you agree with Gareth that there should be a national ferry plan in terms of funding? Yes, absolutely, yes. Pippa, can I ask the same question to you in terms of the pressures on the funding and whether you believe that the islands plan has been funded sufficiently and the impacts that it has had on Argyll and Bute? I would echo what others have said. It's very welcome for smaller projects, but it doesn't really touch the macro issues, things like housing and just roads infrastructure or the kind of things that our communities talk about that we haven't really touched with this. In terms of your point about whether the funds are replacing core grant, I suppose it's difficult for us to make a direct comment on that, but we certainly see more of our funds being for specific purposes and assigned to criteria rather than being freely available. In Argyll and Bute, we have a £250 million budget and we broadly assess that about £70 million is controllable for us, and that covers some statutory services as well. The actual proportion that we have full autonomy on is limited. In terms of the point about transport and ferries, our view is also around the islands connectivity plan and the fact that our preference would be for that to be holistic, so it's to look at all transport to the ferry infrastructure and then beyond on the islands, whereas it ends up looking at transport Scotland control services and infrastructure, not the holistic picture of the islands. That's certainly something that we would like to see at that more holistic strategic approach to both ferry and transport infrastructure in general. Just to remind members, we've got 15 minutes for the final questions. I don't underestimate the challenges on vessel replacement, but can Orkney Islands Council just confirm whether I'm right to say, however, that the Scottish Government did pay for half the costs recently of a replacement vessel MV Nordic Seas for the PAPA and Westerie route? Absolutely, yes. We've got £3.5 million towards the replacement cost of the vessel, which was a boat that we've got second hand from Norway to Nordic Seas to replace the Golden Mariana, which we still have. It's just coming up very shortly for its 50th birthday. That is the oldest vessel in our fleet, but, yes, we were very grateful to receive funding for half of the cost of that replacement. On that point, where the other half came from? Sorry, I'm muted, Gareth. Can you hear me now? Go ahead. The other half came from the council's own resources, effectively from the general capital grant that we receive as part of our local government allocation that we had. We had some small money that we'd set aside effectively out of the revenue budget for transportation to try and make provision for the lumpy repairs that we tend to get with our old fleet. We've got a lot of vessels with engines that are no longer in production, so we have to sort of, when an engine block becomes available for a Merleys Blackstone in India, that's sort of where we are at in trying to secure that, so that if it does break down, we are able to repair the boats and put them back into service. I'm interested in the panel's views on the Carbon Neutral Islands project and what role local authorities have in delivering those. The island of Yellen, my constituency, has been selected as a carbon neutral island, so I'd be interested to hear your views. I don't know who wants to start. Ne Pepe? Thank you for that. I suppose that it's early stages in that we have, ILO has been selected as our carbon neutral island and I believe that Community Energy Scotland started to engage with communities on the islands and we're linked in with them in terms of the work. I don't know how that will develop further in terms of the plans at this stage, I would say. Thank you, Russell. Yeah, thank you for that. We are similar. Community Energy Scotland is starting to mobilise on the island of Cumbri and we're excited to be involved in that process. It's fair to say that it's really seen as a community-led project and a community-based initiative and we're very supportive of that, but also keen to support where we can. We would probably recognise that, like other islands, Cumbri is relatively small in number and we tend to see the same individuals getting involved in various projects. Community councils, development trusts and various other organisations on the island are generally the same people wearing a different hat. We're conscious that we have to align any activities on the island to current activities, so our island plan for Cumbri also has a significant amount of green objectives attributed to it, so that's being delivered through a locality planning partnership on the island as well. We're trying to align those people with the carbon neutral island programme as well and there isn't a duplication of effort and it's about aligning all that together, so very early stages. Community Energy Scotland seems to be doing the local connectivity just now and we're assisting with that. A similar picture in Hoi is the island that's been selected in Orkney for carbon neutral islands. I did have some involvement in not being part of the selection of Hoi on the island. I sort of requested if that could be determined not by the local authority but by looking at the metrics that were being used to select an island, because I could imagine a bit of a bun fight in the council chamber had that been a council decision, so I think that Hoi was the island that best met the metrics of carbon neutral islands and again very early stages. It's very interesting as well that Hoi is an island on which the council is also planning to erect a wind farm and we've got planning permission for that wind farm, so that will give that carbon neutral island of Hoi. If that gets built, we're still waiting for a green light on the inter-connector to Orkney, but if we get that through the off-gen process, then that will certainly give Hoi a very good boost in terms of achieving carbon neutral status once that gets into production or electricity production. I'm interested in the carbon neutral islands. Obviously, there are challenges around that for you and for the whole public sector, not least because of inflation and the fact that the UK Government has presided over the situation where the Scottish Government's budget is worth £1.7 billion less than it was some months ago in real terms, but in the face of all that, I wonder if you could say a wee bit more each of you about the individual islands in your areas and how you're going to prioritise funding to ensure that there's a totality to the project, that there's an impact of the project on the whole island rather than just an aspect of its economy and society. I don't know who wants to go first, perhaps, Pippa Millman? Thanks for that. So, as I said, Islay is our island. We push to have Islay identified as a carbon neutral island because we've already identified it within our growth deal as looking to address some of the climate change impacts, sorry, some of the carbon impacts. We've obviously got a lot of distilleries on Islay that have an impact on fuel usage using PETE, so having regard to that and also the transport that goes along with that. We're looking to contribute the investment that goes through the rural growth deal in relation to that through what develops through the carbon neutral islands project. That's where I made the point about it being quite early. Obviously, we've got a development trust on the islands. We're quite keen to look at what can be done. We've got a Scotland wind offshore being developed off Islay. The island is quite keen to look at whether it could develop an on-island network. We're not clear exactly what scope there is within the carbon neutral islands project, but projects to come through with that. There's still some work to be done to see how that complements effectively with the rural growth deal project to get maximum benefit. We would hope that the private sector would also get involved in that from their own green credentials for the mostly production as well. Thank you. I don't know if either of the others want to come in on the projects in their own areas. No. We'll move on to questions from Ariane Burgess. Of course, you'll be aware of the £5 million island bonds fund. Obviously, the Scottish Government has decided not to progress that. I know that we've already just chatted about the cluttered landscape of funding, but we'd be interested to hear what you think would be the best use for that in terms of repurposing that money. I'll start with Gareth. The island's bond was an interesting concept, although I did hear some adverse comments about it, but it was the intent to try and ensure that population stability or growth in the outlying island areas. For me, the biggest challenge that I'm hearing about those islands is the housing issue. Having houses available for particularly young families starting out in some of our small islands with a shrinking population, there are very few properties available. Papa Westry, for example, is one of our really small islands where, if a young family is looking for a house, there are no houses available for families to move into. A piece of work that I've been working with Voluntary Action Orkney is trying to help the development trusts to enable them to build new properties on islands—two or three houses per fair island. Not all islands have a development trust, but most of them do. That's the sort of route that they were looking to see if they could get rural housing funding. If the development trust had a little funding and the council had a little more, we could pull together a package where the development trust could lead on building two or three houses on the island. I wonder if diverting some of that funding into those kinds of things for housing would help the most remote of our islands. It strikes me that that was the intended purpose of the bond that was around that population issue. Housing is probably the one area where housing gives a much wider benefit of jobs and all that economic activity that goes along with building houses on islands. I hope that local contractors can create local jobs and community wealth buildings. I really see that it also leaves something for the long term that the house doesn't disappear, whereas if you had paid a grant to a family, they would wait until the period of repayment is passed and they could move on, whereas if you are putting something into the actual housing infrastructure, it is going to remain on the island and do good for the long term. That would be my hope or suggestion. Do you see that as a separate pot of money from the rural and island housing fund, or do you imagine that money being diverted into that fund and then it being accessed through that fund, just considering the cluttered landscape issue? For those projects, we are trying to build a package. If it was viewed as an additional source of funding that perhaps could be going back to the earlier conversations that were allocated out to the authorities with islands to give them that additional ability to enable housing in their local areas. I know that we have got development trusts and it is something that is being looked at currently. I would imagine that housing is an issue that is across all islands, so I am sure that something similar would work in other islands as well. Absolutely. Pippa or Russell, do you have any thoughts around the £5 million and how to repurpose it? Pippa, do you want to go? Yes. Populations are a big issue similar to Gareth. Housing is coming up as one of the top issues, but I think that it is complex. I always talk about the fact that there is a sector of levels of things such as skills, infrastructure and housing that would turn into different levels in different places. I think that the £5 million scheme of what we have to tackle and certainly looking across my 23 islands is a relatively small sum of money. I would rather see it added to an existing fund and us to move away, as we have said earlier, from the bidding process. It would be easier to add it into either the rural housing fund or into this fund, but with an allocated basis of distribution. I think that there are two parts to the question. The first part would be in the context of a cluttered current funding arena, which would have to remain consistent and suggest that it would be allocated to an existing fund to supplement that and make that existing fund stronger. I would certainly support the housing fund as a potential reservoir for that to go into. However, if you do not look at it in the cluttered arena and you look at it in the current arena, whereby there is not exactly a decluttering taking place at the moment, I would say that the convention of Highlands and Islands, the cohigh, has been established to look at approaches to addressing depopulation, repopulation and topics of focus, including housing, jobs, critical infrastructure, access to public services, talent, attraction, retention and return. Through the current development of an action plan to support repopulation, working with partners, including Highlands and Skills Development Scotland, there might be another reservoir for discussion on how that could be allocated to approaches using small-scale pilots that would potentially impact co-opulation levels and might be funded through that, just to test the art of the possible. I give that second part of the answer in the context of not a decluttering of the current funding mechanisms. Thank you. We are now going to wrap up with a short supplementary room, Jim Fairlie. Okay, that brings us to the end of the session. Thank you very much for your… Sorry, Alasdair. I would like to indicate that I would like a supplementary room, but if there is not time, there is not time. Well, if it is a very brief supplementary room, we are pleased to Jim. Thank you, convener. It is really just to ask at its most basic level whether the people on the panel represented welcomed the fact that the Government listened to the fact that the consultation responses were, to put it politely, rather mixed about the idea of the islands bond and welcomed the fact that that was listened to perhaps Russell McCutcheon once to answer that. Yes, simply the answer I would say is yes, absolutely welcomed and I appreciate that and thanks for that. Thank you, convener. Thank you, glad that we got that on record. Thank you very much. I really appreciate your full responses to your questions. It has been most useful in part of our budget scrutiny. We will now suspend the meeting until 10.40. Thank you very much. Welcome back everybody and I welcome our second panel from the Scottish Future Trust. We have Neil Rutherford, the Senior Associate Director from Investment and Place, Tony Rose, the Director of Strategy and Economy and Dermot Lailor, Associate Director of Places Scotland's Future Trust. We have got about 90 minutes for questions from members. A bigger pardon, 60 minutes. That would have been a big mistake knowing how we tend to run over so you have got 60 minutes, you can relax a bit. I wonder if you could give us an overview of the role that the Scottish Future Trust has in developing the island plans. I will start. I do not know if the panel would be useful to talk about the Scottish Future Trust at a more general level, but I am happy to talk about the islands programme. Effectively, as an infrastructure agency with expertise and capability, we are there to support and help the programme. Working closely with the Scottish Government islands team, we were involved in effectively the strategy for the use of that funding, which led to the fund design, the fund delivery and support, and subsequently about the assurance and monitoring of that fund. The basis of the fund and a big part of our role was really about supporting those bidding. As one of the speakers earlier on talked about, we have a programme lead who is based on Tyree. She spent a lot of time engaging with the authorities about the process, about the kinds of things that it was looking for, providing support, guidance and general assistance. There is also the production of materials that supported that process as well. A recent response to the committee, the Scottish Government explained that the competitive bid approach provides the students that money is going directly to deliver national government policy. Does that work well along with the aspirations of the islands that you are there to support? I mean, I guess the focus, I will maybe widen out the response, but the reason we ended up with the competitive bid process was for a variety of reasons. There was wider feedback from a number of other parties who suggested that allocation didn't always work its way to them, so a way for them to engage with the process. As you say, effectively, how that money is relating to the national islands plan. What I should have said is that the programme is designed around critical infrastructure, so what are the bits of infrastructure on islands that really matter and how do communities help to shape that effectively, the infrastructure that is going to come forward. I say that there were a number of factors that fed into that, so I will look at it and again, the speaker spoke about that earlier on. There are other kinds of funds out there, how they worked, how they were being allocated and I am sure that we will come on to the connection to some of those later on, so I will stop there. Thanks. Beatrice Wishart would like to explore that a little bit more. Beatrice Wishart, I wonder if you could reflect on the competitive bidding process how it worked this year and how it compares to last year's allocation process, and whether you think that future rounds should be done in a similar competitive way. The infrastructure investment fund was 21-22, and at the time that it was launched, I feel that it was launched in December, so there was very much of feeling timescales. We cannot fit a bid process around that, but there had been consideration being given to how future rounds of funding would be allocated or distributed. They had slightly different emphasis as well. The infrastructure fund was about response to Covid, shorter timescales and the island's programme is to say that strategic long-term view and trying to identify the infrastructure that is there. So, as I was saying in the last response, building on the other kinds of input and thoughts and engagement and consultation led to the bid process. In terms of going forward, I guess at the moment we are learning from the last round, we are engaging around that as well, but with the world, as to where it is at the moment, there is an element of the certainty that needs to come around aspects of that for running again. However, in terms of running it again, all the infrastructure is there to do that, the resource and so forth, so it could be set up pretty quickly. As I said with everything going on at the moment, there are just the steps to the next launch. Jim Fairlie. That is merely a curiosity from myself, to be honest with you. If you did not have a competitive system and you are going to do it as an allocation, does that not just mean that the money will be spread across everything and people will then say, well, I can do a bit of that, but it would miss the target of what the Government's infrastructure proposals are actually looking to achieve? Maybe by way of example, under the 21-22 allocation, the Islands infrastructure fund, there were 38 projects, and the islands programme, we have effectively 11, have come through that process. Different average funding levels, although within that, the islands programme, there are some smaller funds through to the bigger projects, like the Orkney nursery that was discussed this morning. I mean, again, feeding into the decision process, pretty much how do you take a place-based approach around this? How do we deliver those critical infrastructure that communities need and following that through? I don't have a term. Thank you very much. I know a great question, and I think it's that balance of the national policy objectives and the local priorities that the competitive process was really trying to target. I suppose that it is also building on some of the previous testimony, that it takes time for communities and authorities to build the project. In theory, there is a kind of stack of ideas, and projects are half ready. The competitive process is to invite who is ready now around that balance of the national objectives, so that there is fairness and parity across the piece, but also the critical local infrastructure criteria means that it is something that is relevant to the community and is going to make an impact on a range of community groups. That was why that competitive process was used. Obviously, in the direct allocation piece, that worked really well, and one of the pieces of support that SFT offered was review and scrutiny. I think that Pippa had mentioned that in her own testimony around that idea of following through. The competitive process allowed us to align the national objectives and the policy objectives with the local priorities around the idea of whether it is critical to the local area. That is the kind of key criterion. If it is, the evidence of debate will show that that will benefit the project, the community and the wider communities, and that is the narrative that we were interested in in pushing out through the process. Thank you for coming along in your very detailed evidence that you submitted. Dermot, I would like to expand a wee bit there. You started talking about criteria, and I am interested to know how you waited the different criteria when you were making the assessments on the bids, and also what consultation you did to decide on the criteria specifically from an island perspective. Absolutely. That is a great question. I think that there are three layers to that answer. The first one is that we have the opportunity to participate in the island's delivery group. You know that there is the island's delivery group, which is representatives of island voices, island communities and island authorities, and also on the island's strategic group. I said on that group that we have people from the community and people who have been directly affected by the Covid and island circumstances. The first meeting of the group could not have been more conclusive. It said that we need to act on the consultations that have been done in the Covid and the consultation particularly on the prioritisation of the national island's plans, priorities, and they were target population, sustainable economic growth, and then on that macro piece that Pippa talked about on the housing. So very clear mandate do deliver, invest, and the voices were kind of coming forward from that. I think what's really important on the island's delivery group is that people come to a forum like this, but they go back home and they talk to communities and then bring it back in. So I think that's one extremely important one, and the message there was build on conversations had, don't have more to get to the same position, build on. So I think that was one really important bit. I think the second really important bit then is that on the basis of comparable funds like the regeneration capital grants, which sometimes land really well for islands, maybe sometimes don't, and build on the testimony and the vacant and derelict land and other bits, we had a look building on the island's delivery group insights, but also our colleague based in Tyree and also kind of the work that we're doing, and looked at those and said, okay, so for authorities and communities bidding, can we try and align some of the criteria so that these are not new things, and you kind of go, well, that looks sort of familiar. So that was one intentional bit to say, well, that's sort of familiar. So that the people who'd be preparing the bid kind of go, I've had some experience of that before. So that was an intentional piece. The second bit, though, then is the waiting within that sufficiently robust for islandness, and we felt no. We felt that it needed to focus very much on the partnership and the engagement piece to reflect the island capacity and also that interest, and also on the deliverability piece, so building on Russell's point early on around the labour force and the contract bit, but I suppose part of that was saying, if it is critical to the local community, then it needs to be able to be built and run, and so part of that was saying, are we ready? So back to that kind of bit of readiness, it's not excluding, are we ready to get it done and are we ready to run it? So that was on the waiting side, and I suppose the final bit then was, as we were moving through on the both the islands infrastructure fund and the programme bit, then we tested it in different fora, so we tested it directly with local authorities to see how he's working. We tested it in the discussion with the court of the University of Highlands and Islands, talked to some co-high representatives, talked to a mobility convener, so a variety of people, so I think that our colleague on Tyree and the Scottish Islands forum have got a wealth of information, but what's like to be an island or on an island and brought that very perfectly into the discussion. So those three layers around building on the consultation are review of things going on and then testing led us to the conclusions in the guidance. I've got a supplement from Jim. Given that full answer that he gave about consultation and review and whatever, and the knowledge of the issues facing island communities, do you still think that the competitive process, given the evidence that we've just heard in the previous panel, do you still think that's the best way forward to support islands? I guess there's a balance in everything, and the islands fund is one part of a wider funding package that exists, so there are different routes for funding. For the fund itself, that community involvement, it's a way to capture that. Building again on the experience of some of the other funds that have been launched and where they hit. As Demo talked about, it's a good way to be able to demonstrate that partnership working, so the community, wider public, wider private sector, are all coming together, that there's a project there that they can get behind and deliver and effectively make happen. I'm jumping slightly ahead. The competitive process, what I think it's allowed to do, is maybe unlock some additional resources as well. The speakers this morning did talk about there's a local authority resource, but there's also community resource, some external resource, some elements through people like ourselves and high and others engaging around that, so you're getting this quantum of resource that can help too. Do you deal just with the island programme in isolation, or given that you can't add capacity, which we've heard is sometimes limited within, or almost all occasions, limited within local authorities at the moment, do you offer other advice or whatever so? It's not specifically coming out of the island plan money. Do you guide and assist local authorities and communities in what other resources or pots of money might be available? Very much so. For this particular project, I think in the submission that we provided, there was a question around the different pots of money, and that was discussed this morning as well. I think that the team spent a lot of time with community groups and local authorities working out and understanding what other pots of money there were, whether it was suitable or not etc. In that general broad question around the team supporting the bidding, in that process, yes, there was consideration around the pots of money in that, and also with the team providing, as we've heard, the local authorities put in their bids together. In terms of SF team more broadly, we have a plethora of activity in various aspects of the islands and other parts of Scotland that we put in our submission, which I won't go through in detail here, but whether that's from education programmes in terms of early learning, whether that's for 4G masks going on islands or whether it's health projects as well. There's a broader support from SF team to island communities in the work that they do through the particular programmes. I don't know whether there's also the place aspect, which looks at a place, not just a sector, and I wonder beyond the island programme whether there's some examples like that. Dermot, you might want to go through that. If that's okay, yes please, and thanks Tony, absolutely. It's a great privilege to work with island authorities and communities because of the nature of the relationship, so we're doing a lot of work in poetry at the moment, just looking at how the public services come together and how that choreographs what work that the community development trust are working and then some of the emergency services. So if you imagine poetry as the town in the island, how does it relate to the whole island? So to try and link the different investments again up in Balavanic and Bimbacola looking at how public services come together with community services and maybe free upspace for housing and how that then feeds in some of the investment bits at the Orkney island council looking at very similar issues there as well. So really trying to look at what are the needs at the local level, how are they expressed and how does that help us to choose which money to get when and why. Thank you, that's really helpful. Supplement from Jim Fairlie. Yeah, thanks convener. Then we're going to come back to yourself. I've listened to what you're saying about some of the getting projects ready, our projects ready, but is there not a danger of creating a kind of catch-22 here? That's one of the evidence in the evidence session we heard earlier on, one of the things that they have a problem with is having contractors on an island who can do the work. If the contractors aren't there, it's because they're not in a position that the contractors aren't available on the island. If they're not available, they can't go forward, therefore they don't get the funding, so therefore a contractor won't go there because the funding is not there to do the work. Do you not see that I'm fully supported and support the idea of the competitive tender, but there's not a danger of creating a catch-22 by doing it in that way? I understand absolutely. I think on that, there's a couple of things that we've been trying to grapple with so I know that Tony is working more directly on this and we've been doing some work up in Shetland and indeed just looking around the infrastructure planning and the contractor and the side of that. There's two bits that I would reflect on from this particular experience. One is around how to build up a pipeline of projects that says to the contracting and construction community that there's stuff coming. It might not be now, but there's stuff coming. That seems extremely important to signal confidence to a market and to a capacity. That's really important. I think that all the testimony this morning talked about taking that long-term view, but to get the long-term view, you need to deal with some of the short-term issues. On building the pipeline bit, that's where some of the competitive process is trying to head to but also linking on that capacity that we've just talked about, how SFT more broadly can help. One is on the pipeline bit. The second one, just to bring it in, is that there was an intentional decision on the island's programme to focus on the idea of critical local infrastructure. Partly that was to address two things. One is in the island situation as you've laid out. If it's below a certain threshold, it's difficult to get a contractor to come. We thought that if we were able to pitch it towards something that is big enough and measurable enough, it's of a quantum that says we could probably get this delivered, we could probably organise the tender processes, but secondly, because it's been through a competitive process, there's an assurance piece to the contractors and construction piece to say that this is already being tested, challenged, pushed, cajoled, so there's a good chance this thing can get done. No disrespect on any of the community capacity side, but sometimes life just throws it a curveball and you're not ready to adjust to it. We thought that if we were able to offer some assurance and some pretesting on something through a competitive process, it would say that this is ready to go and then there's a pipeline to come. If you've got that creating this pipeline, which is going to be there for the future, that would, I assume, require multi-year funding that you can then guarantee going forward. Does that create its own problems for you? I think that a multi-year funding obviously would be a fantastic approach and I think that's something that we feel very strongly that would be really good to do, but I think that there's two dimensions in it and I think that Russell and Pippa actually, and all of the speakers this morning talked about it, is that it takes some time, years in advance, to get the projects ready. I guess that it was Russell that talked about some of the revenue support and the capacity support, so it's building the project readiness and that if the projects are ready, then you could fund the project to a director or a competitive cos you're ready, so I think that one part of that is the readiness piece and how we better organise our capacity on it, and I think that the second bit is using the competitive process as best we can to give that assurance and confidence to the market. Thank you. Alasdair Allan. Thank you, convener. There's a lively debate about how to ensure that the lived experience of living on an island is represented in the public sector more generally in Scotland. I just wonder how to ensure that island voices and the experience of living on an island are represented in the investment panel and other areas of your work, perhaps one for Dan or Neil, I'm not sure. Yeah, sure. Thanks very much. Mr Allan, really a powerful question. One of the things that we did around that was to try and break it down to what it's like of a day walking down the road to get to something, and so we talked to the mobility convener and she said some days it's really good and some days it's really not, and some days it's really good if you're semi-able, some days it's good if you're young, some days it's good if you're old, so we really wanted to understand what it's like to be you and what's the sequence of that experience and what happens where and who involves, so when you get to the beach can you go, when you go to the convenience can you go, so we're really trying to engage in conversations with people and use our responsibilities to translate that into the infrastructure stuff, so listen to the lived experience piece and then translate into the infrastructure stuff. I think the second part of it then is having the opportunity to engage and test with young people through the young islanders network and we didn't engage directly ourselves but through the Scottish Government Islands team was really helpful but also the Scotland, the Scottish Islands forum to be able to feed us in, so we felt that our job was to listen and translate and not to do the consultation on the ground, contradict, complicate and mess, it's more listen, listen and translate, so I think that with the our colleague who's well connected to the islands with the mobility group but also with born the Gallic, actually and that was a really interesting discussion as well about what it means to be a Gallic speaker and how to access opportunities whether a young person with ambition or whether you're moving through, so trying to listen to the particularities if you like of islandness but also of different identities and again translate that back into the infrastructure piece. I've got two parts to the supplementary, how is the investment panel picked and witnesses in the earlier panel said that there'd been a lack of empowerment that they felt by not being directly represented in the investment panel and there was also in evidence a statement that said that this was removed from the spirit of the islands act which was created to put islanders at the heart of decision making. Should I start with Neil? Yeah, absolutely. Can I just come back to Alistair? I mean I guess as well the submissions are really based around island communities and island organisations working together to decide what they need and that's been a big premise of that, so I guess there are quite a wide range of participants in the submission of those projects which then flows through into the panel, so the panel was put together to reflect the independent nature of we're going to have to assess these bits that come in, therefore having organisations that may have an involvement, it makes it quite difficult to manage that process. There's also the infrastructure expertise, I'll talk about the panel members in a second but it was very much aimed at we want to bring people who have expertise of infrastructure onto that panel and finally everyone has a connection to the islands. There are some people who live in the islands, there are others who have that experience through the kinds of projects and the experience that they have. One piece of feedback that was given at some of the various groups is initially when we discussed that it was quite SFT government heavy, so it was how do we get some wider external involvement from others. Robert Emmett was on the panel, he's Dundee City Council, he's finance director there but Robert was previously finance director on the western Isles, he's got extensive islands infrastructure experience. Angela Scott, who again was seen as local authority representation, she's Aberdeen but chair of the hub territory partnering board for the north, so bit working very closely with the islands there and a big part of the aspects that they're looking at is about place-based approaches and again around the delivery of infrastructure and then we had Douglas Cowan from High at Anzoli Laird, so again through their role in terms of place director and regional heads of community infrastructure, so we're getting that wider panel membership with effectively the understanding, knowledge, involvement, experience and so forth, so the panel was built on that basis but I think with a lot of what we do we can always learn. How was the panel picked was my question. How was it picked? Effectively a recommendation was made from SFT Scottish Government officials as to the nature of people who could sit on that panel given the experience and the kind of skills that we needed, so a recommendation was made and that was signed off at ministerial. Was there an interview panel that involved islanders? No, no. Okay, can I just press this point because the comment was made that subsidiarity should be a guiding principle and that better decisions will be arrived at and better investments delivered if a fund is devolved or decision making is devolved at a local level. I mean I don't think from you've mentioned the panel members and stated why they were chosen by SFT and Scottish Government officials but you haven't really said address the concerns of locals and would you do things differently if it was done again? I guess for me I think the panel is there to assess the bids on the basis of island communities and island organisations developing and so it's coming down to elements such as the deliverability, the legacy, the sustainability of that, how is place and partnership and other things being reflected and then the outcomes, so the outcomes I think is a big key part of that. I know but I'm sorry to press you on this because also within that comments were made that the resources weren't there to be able to ensure that the bids were made and they were valued for money so that there was an efficient use of local authority time in comparison to the actual project itself but that's from a monetary point of view. There's lots of stuff to learn in here so I suppose I'm asking you was this the right decision and would you make a change? At the time it was the right decision in terms of the timescales where we were, that independence that we wanted of the panel, the recognition that there were a number of people if they sat in that panel were likely to be conflicted so it was a basis of managing that but absolutely we would learn from that going forward and we will consider that. Yeah absolutely take your point on subsidiarity I think is a really important part both of the act but also of the process moving forward and I think in our considerations there were three levels so one is around the projects themselves are developed at local level on islands with local people so that it's not us instructing that they've emerged from probably years of conversation and conflict sometimes so the first one was that the projects themselves derived from the islands the second then is the decision to put forward the projects to the island programme came from the island so it wasn't Scottish Government or Scottish Features Trust saying you have to have these or whatnot so that decision was taken and and and these are difficult decisions and in your testimony this morning talked about the timing and the elections and having to go to cabinet and these different difficult decisions but there's two levels of direct island voice that I guess we were saying the process is geared about those it must come from the community the choices must come from the island and to build on paper's point earlier about scrutiny which came in in the direct allocation piece and the competitive piece we took the view that it might cause even more complication if the investment panel had island authorities on it because some people may choose to absent from some decision making because it might be a proposal from their island so I guess it just to be transparent we made those direct decisions to say must come from the island the decision to put forward must come from the island and I guess on that third bit on on the investment panel around the scrutiny and support it was offered around the supportive frame not to say what has been done wrong or right but if the narrative of what is it we're trying to do in the island is clear then somebody from the outside could read that and kind of go I understand that if the choice to put that forward is clear somebody from the outside could read that and kind of go I understand that and also to be able to offer feedback back in to say we've looked at this and we understand it but we think that maybe this part is not ready or that these improvements could be made or these choices could be made so that was the intention of it I think the other bit is that the investment panel only were strictly confined to the proposals and the narrative that you were offered you know from the bids you couldn't bring in but I know what's happening around the corner or I know what somebody else is doing you kind of go we can't do that we have to be fair to all the bids so your job on the panel is to review what you were given what you were offered and to understand does that make sense do we believe it's deliverable and if we believe it's deliverable do we believe it's the best investment for this community to deliver critical local infrastructure you mentioned about resourcing as well and I guess absolutely local authority serve resource constraints as many areas of the public sector do and I guess the process did allow additional support from the SFT team and others to be brought in to help them develop these projects at potentially a pace or scale that might have been difficult otherwise and a lot of the work would have needed to be done on these projects to get them investable ready or fundable ready and so the work would need to be done on the projects by local authorities and they did offer an opportunity for some resources to be to be focused on that and support as we heard this morning and today as well so take on board absolutely that is constraints but I think that it was tried to be designed to to help authorities bring these projects forward so that they could I think by knowing that I might have asked that question about the resource support from SFT that would be quite useful but thank you for that okay got a supplement from Beatrice yeah just a brief question just can you just confirm my understanding then that nobody on the investment panel currently lives in an island they do Scottish Government Erica Clarkson who is sorry I forgot Erica's title but Erica was part of it that's fine thank you for clarifying thank you Jenny Minto thanks convenient and thank you you touched on this briefly in your previous answer darmit I'd like to just ask about the timing of the application and the the tight relatively tight deadline and Argyllin Bute council and their evidence said that that resulted in because it was part of the election period it didn't result in full council engagement or that was had to be much more pressurised I think North Ayrshire commented on that so I'd just like to hear your your views on that thank you very much miss Minto yeah I mean on timing we're absolutely sympathetic to the to the issue so that if there's tighter timescales it presents a lot of challenges for for authority so we totally recognise that I guess the timing was influenced by a number of factors so one was the kind of the outturn of some of the Covid implications and world coming back to normal so just trying to kind of come to terms with that the preparation for the scotish elections the COP conference which I think is important just to reference it not by way of excuse but when we think about the national effort around that the national focus and the displacement of various different things so I remember distinctly that time was quite difficult to get conversations with colleagues even because of such a big issue so there were a series of factors moving around on the timing however we talked a view with Scottish Government Island team that the going back to that opening position that I laid out on the islands delivery group where they said do build on and do invest and deliver the best thing to do was to get the money out so we take the point on the timing and accept that it has caused challenges and absolutely recognise that and I think that the learning for the long term will bring it in but I guess the intention of the decision was get investing and deal with the time so I think that was the position and if I may just very quickly you talked about the ideal situation of having a pipeline of projects so what work are you continuing to do with local authorities to ensure that pipeline and communities to ensure that pipeline is kept full? Absolutely yeah so there's a few things that we're doing on that so on SFT broadly on the kind of broader picture as part of the construction leadership forum SFT built a construction pipeline so it has a threshold that there is a threshold on that and the purpose of that is to show across Scotland what's current what's planned what's emerging and that goes back to the point I was making to Mr Fairlie about indicating to the market but you can see it on the map you can see the values you can see who's doing it so that's at the broad SFT level and that's the support authorities that support the construction sector so that's one side the second side is then we're working with island authorities like Shetland Neil Grant up there and the localities team to try and look at okay across the islands there's a lot of things happening in islands and sometimes many things and less time so we're just trying to work out how do all the things that we're saying do what we need to do how won't we organise that differently and how might it work in the different places so working with Shetland directly on that I mentioned Port Tree we're working with Western islands on the USTS and and the very kind of testimony was as well but also at Orkney working with Highlands and Islands on some co-locations for public services which bring services together but then also look at how does that relate to communities so we don't just have a public service answer and a negative on that community side so I suppose there's some examples of directly working with authorities agencies and communities to look at the issues that are current on the islands to build up on that pipeline bit and then I suppose you know to take evidence from yourselves and and these bits to challenge ourselves and say are we doing enough on the multi-year piece are we doing enough on the pipeline piece so it's to give assurance that we're working on the ground with folks and I suppose to take to take challenge and and challenge ourselves to do more. I was thinking specifically about the projects that hadn't succeeded in this round and if there was the continual work I appreciate your challenge for time so. Very much yeah on that the idea is to give feedback and to support and you know where we identified that there was potential projects to work with and build readiness so absolutely. Thank you convener, good morning panel. I've enjoyed listening to you describing the community engagement that you had particularly you spoke about that real grass roots involvement and feedback that you had and ensuring that you know any kind of consultation engagement is fully representative so it just threw up a question for me when we were within this committee looking at the issues of depopulation you know population decline in islands are you also considering people who have left the islands and the reasons for that and sometimes we know that you know the islands will never be able to compete in certain aspects with the draw of the mainland and what's available there but has anything came up in regards to why they may have left what would have been better for for their living experiences on the island and are those voices included? Absolutely I think in Scotland you can't move from eating somebody from an island so in public life there's various bits and there's often a yearning so you meet them and the yearn to go home so I'm very familiar with that idea so I think there's there's a few bits that we've been looking at on that one one is when that opportunity presents to talk to someone and say why did you make the choice you made and what limits you're going back sometimes it's the desire for independence like we all have to have a different life but sometimes it is circumstance perhaps the opportunity on the island wasn't available to you or the craft wasn't available or the farm wasn't available or whatnot so on that bit we've directly through a different part of Scottish Futures Trust been looking at a piece of work called new frontiers for smarter work and which is looking at location agnostic working which is looking at the settings and the environments of how we had organised differently for work and also look at then how that links into the digital piece or at R100 in other words but bringing that back to the critical local infrastructure what that means is better workspace on more islands what that means is more shared workspace on more islands and what that means then to build on the testimony of Russell and others is how the package wraps around so there's a better workspace there's a home to go for underservices that are plausible so that's how we're looking at it and if you unpack that story and say does it work for somebody returning to the island from Utrecht yes does it work for somebody who's living in Yale yes so that it shouldn't be a different story for different people we should be trying to bring the infrastructure together around shared stories that's great thank you and just if I may just come in in the back of that you know you touched upon how we really want to reach out as as many diverse you know people as possible as well and just you know how how that can be done is there anything that has came up that has never been done on islands and there that attract more diverse individuals do you think there's anything that was you know stand out from the consultation I think what the stand out for me on the consultation is not that nothing has never been done it's more the richness of what is being done okay and I think that I was at an event here last night around the climate emergency response group and one of the words that was used was coherence and so I feel that it's less about new initiatives sometimes and more about co-ordination and coherence so to live life normally to live well locally sometimes we don't need fancy things we just need the basics done well in a coherent kind of way so I would say that that was the thing common for me that's really helpful thank you enhancements in terms of the wider more strategic context around that the infrastructure investment plan that was published 18 months ago within that route map there's a there's a series around public engagement so it's about being more active and proactively considering public engagement around infrastructure decision-making and so for this committee I mean I think that's an important piece of work that's going to be happening over the next two or three years to inform the next round of infrastructure investment and getting the island communities and the island views in that public engagement piece I think is a really important part of getting that structure to to think about what people need engaging with the trade-offs that they're thinking about making and how that thing gets built into the wider infrastructure investment plan for the next stage as well as these individual projects that are happening now to deliver things on the ground so I just think from a committee's perspective understanding that public engagement piece and how it will inform it could be a helpful way of helping you address some of the challenges you just articulated. It's helpful thank you. Thank you. Rachel Hamilton. I'm actually okay I was a supplementary that you were bringing in on. Well I think I've asked that as part of my question thank you. Okay thanks just we had a part of an answer previously about how SFT or help communities generally but we heard about how cluttered the funding environment was. Have you got anything to add about how you help on the wider funding packages? Is there anything you may have answered it fully before? I guess around that wider funding environment that's a big part of what the team looks at around housing and economic investment so understanding some of the strategic projects and initiatives and programmes that people have and spending time with them understanding where in the funding environment is their funding available, how does it fit and I'll come back to another point in a minute so you know we've been involved in things like the islands growth deal advising around strategic aspects of that but also for projects that weren't successful actually where might some of those projects sit. We recently involved in things like Stonaway harbour, the deep water port and effectively the funding route for there so we spend a lot of time looking at the wider landscape and understanding where there is funding and helping people around that. I think the focus on this fund around outcomes is really important part because I think historically funding has tended to be more sectoral based on the outputs that are achieved by a sector and broadening out using national performance framework all the way through to the outcomes that it's trying to achieve. There's a bit of a transition going on because you are needing to get multiple outcomes from similar assets or similar types of investments and projects and trying to achieve that does cut across a number of portfolios with different funding groups so we are in that kind of transition period where that is becoming more important so using the outcomes as a focus is a really good way of trying to articulate for different policy areas how your particular aspect can contribute to that particular outcome and it is an evolving process but that's a big part of where we are at the moment and not on the islands example but somewhere like Granton harbour where there's multiple outputs and outcomes being sought in that area to regenerate that particular part of Edinburgh that touches on museums it touches on heat sources and renewable heat sources it touches on housing it touches on traditional region they are all different policy drivers that need to be brought together in a single package and working with projects on that helps you to learn and we'll you know can then help inform some of the island's work as well in terms of what's going on and the work that Dermott's talking about you know starting from that place perspective and I think it actually then relates very well to North Ayrshire and the island plans that they were talking about they have this place approach they have a strategic approach it creates this flow of programs and projects which then means actually they can think about funding and people like ourselves can support and get involved in those kinds of things so that's a really good example of how some of that could work I think that that's been really useful that I think that was it was worth going back to that harianne Burgess thanks convener thanks so much for this panel this morning it's just brilliant to hear the work that you're doing and I think what I'm getting from what you've been talking about is that you've started a process it's the first year and I actually feel you know there's these concerns that have been raised about the competitive bid about the panel but actually I think we're in a process and there's you know there is learning to be done from this first round but it does seem to me that you know there's a bigger picture that you're trying to take into account so in terms of that bigger picture and I think we heard already this morning from Orkney island council you know you talk about transformational infrastructure so that really struck me with the you know at first it was a nursery but when they spoke about what the impact that would have in terms of infrastructure in terms of how that could transform Orkney in terms of people being able to access jobs and things like that that that really was you know exciting to me so I'd love to hear a little bit more about other examples of transformational infrastructure in you know that could be in place in the islands I mean I know Tony you just talked about potential transformational infrastructure in Edinburgh right that complexity that would pull together but maybe there's some things you've become aware of in the islands that we need to be looking at you know beyond housing we've already kind of covered the housing piece this morning yeah absolutely so as was it just development that and thanks very much for the question one part of the transformational bit it's a slight irony it's not building new stuff it's making better use of what we have and and the difficulty with that is that sometimes a new thing looks really beautiful and engaging and powerful but also it costs a lot of money to get it and meanwhile over the road we have an equivalent of that so that's where that new frontiers for smarter working piece is trying to come in how can we on the US work with the Western Isles Council Highlands and Isles to repurpose existing spaces in Balavanic and then bring services to get which release spaces for housing so the sequencing of that I think is really important you get a win in that you make better use of the building we have to have a better work environment for people better digitally connected that means we freed up certain spaces in the village and the spaces from the village can be used for housing and in the housing then kind of track people and so that will be a transformational kind of piece I think that that's one dimension of another dimension in this year and in the islands programme on egg really interesting how the public sector estate released some space around the health estate and then how the community were able to kind of come and wrap it around so if you think of that as layers one layer moves out another layer moves in and then we're able to get the walls and then we're able to get the roof and then we're able to get it and in the way that island communities are so innovative they'll find an opportunity before you know the opportunity exists and starts to layer it through so I think some of the transformational stuff going back to that phrase of critical local infrastructure is not about shiny it's about relevant and it's about co-ordinated and it's about pragmatic and indeed on the island delivery group one of the discussions was about complicated criteria around innovation sometimes funds invite innovation and we abandon what we have and we go searching for a new thing perhaps what we need is sustainability and not the transformational thing is around really imagining what that thing that we have could be different to make life better thanks for that and obviously being agreed that's music to my ears to be repurposing what we already have and I think one of the things I love that term that you you brought up during the location agnostic work earlier and what popped in my mind is maybe we need maybe not to clutter another landscape but in terms of funding but maybe we need something like a rural island and housing fund for workspaces and I'm aware that in Ireland they're really breaking through with that kind of community workspace hub so but also wanted to touch on because of the repurposing bit that you're bringing in work that you're considering around the carbon neutral islands project I mean that feels like it's connected and are you involved in any way in that or just kind of like aware of that work and then kind of aligning with what you're doing with that project it's there is involvement probably more at the alignment sort of how do the difference transfer together um with many of these things we provide strategic thought advice we're happy to chat anyone about some programmes and the like so there is a connection because ultimately comes back to that place type approach for me about how do all these things to fit together and how does the world work and so they will connect so I think as well for me connecting people like our net zero team to carbon neutral islands is an important aspect of that as well just the work that they are doing again the co-ordination of that so that's more at that strategic we're looking at broad so we could produce the net zero building standard recently which is helping and guide public bodies and others as to if you're looking to create your net zero building over the next 15 years I think target's 2038 for Scottish public buildings what are the what are the thing you talked about process it's a bit dull and dry but actually it's really important because it gives people a framework for how to work and that standard allows public bodies to see the process they have to go through to get to the net zero building so in that island project you've just talked about that will be a really important component of how those islands are building together the use of their assets to get that to a net zero place in that bigger kind of net zero picture so at the moment it's more support at that kind of guide process framework level as much as it is around the individual islands and helping them to develop their plans and I think you're right it's about at the moment quite often the world breaks down into different things and that's understandable I think where we're going and through a lot of the the work and how Derman's been talking about is thinking about that by our picture and then understanding how we all come around some of these strategic elements and figure out well how will some of the funding and other aspects work around that including resource and people and how we actually enable those kinds of things to happen so that it feels like there's a bit of a shift coming and I guess in terms of the way that we work that's sort of what we do anyway we're always working with somebody so it's that partnership type approach that can create similar outcomes yeah I mean absolutely I mean that repurposing of what we've already got is so crucial in terms of the carbon neutrality story I think people lose sight of the amount of carbon that goes into building a new building I still see buildings being built out of concrete block and sorry I don't understand that that's there we'll need to move on so I just you know really appreciate that you're doing that work and then it sounds like it has an inherent part of net zero in the mix anyway just great thank you allister allen thank you convener I certainly don't hold any of you responsible for the cost of living prices nor for the questions that now exist about UK government handling of it but obviously it has an impact on everything that you do as an organisation as it does on the wider public sector allister sorry so this is a supplementary on question the arianne's question I thought I might get in at the end on my own question no but we'll see if we've got time have you got a supplementary on arianne's question no I just had my own question which was up next sorry I misunderstood you there convener beg your pardon Beatrice has got a supplementary on on arianne's question thank you yeah it was just briefly just you know the examples of transformational infrastructure and I was struck down by your comment about earlier about basics done well how do you ensure that well I think that's a great question and I suppose that's where the offer of assurance and support comes in from ourselves but also around how we design the project in the first place you know so the the the story of the outcomes are really important so what is it we're trying to do then the second bit is to make sure that we design in the checking processes and the review processes in that so one of the things that I think we've learned on certain projects is it's really important on the life cycle of a project to have two or three points to be able to come in and just ask a simple question at the beginning we said we were going to do this are we still doing it so I think part of it is just designing in time to ask a simple question are we still doing it thank you okay allister yes well you got the first to answer that but I suppose my question is really about how you cope with that and manage that situation given the impact that has on in real terms on what you have to spend and how an earth you adapt to the quickly changing situation there is around both the cost of living and the cost of materials and inflation as well in terms when you're absolutely right that the market is hot as you call it at the moment to focus on the construction side of things and cost increases are happening as far as sources whether that's post-covid kind of picking up of activity having had a hiatus for 18 months that's accelerated that sort of supply demand impact the inflationary aspects as well on both materials and wages and then there's a labour supply so all of those things are conflating to creating real cost pressures around the construction element of it and the way that variability around that depends on the component of what you're looking at how much of it is materials impact how much of it's a cost of labour but clearly from an island's perspective there are additional costs you know that get in in particular the transport of that is causing some some issues and that's exacerbated by the moment where that main line Scotland activity where it is significantly greater and so that is having cost pressures and subcontractors are busy so that is having a real issue it it may ease as we go through the year as the markets balance out and things get under but there is challenges that and I guess there's two ways of addressing that one is it may require a degree of phasing in time prioritisation so you get the things that are ready to be done done and so that's an important component there's a kind of making a decision around that there's part of it and then the other element of that something that Durham has already picked up on is is that whole pipeline is creating the right environment for when you're procuring and when you're going out to market to try and address those those systems and those problems so that when you're procuring for the next one you're taking that into account and able to manage it more effectively so there's a number of ways of reacting to that and and I guess that that's something we're working live now with the construction industry and public bodies to try and help address that both in the islands and elsewhere and sorry I was going to add just in terms of the programme itself within bids there were contingency sums were allowed to be put forward to manage some of that obviously things move very quickly so we will continue to work with and review those and there's a potential element of some contingency that can come around the general programme to effectively help with some of these things. Thank you. It's a supplement from Jim Fairlie. Thanks very much, convener. I'm going to come back to you again. We talked about the multi-year funding and putting the pipeline in place but we already know that the Scottish Government has got £1.7 billion deficit in their funding. What reassurances do you have that you can continue to put the funding in place given the fact that the Government are now having to pay massive wage inflation? We're trying to help cost a living crisis. They're going to be cut in budgets. There's simply no doubt about it. Do you have any assurances that you can continue with that funding programme? If I may, just to take that in two ways, there's the SFT specific piece on it and then there's the programme specific piece on it. On the SFT side, our commitment is to work with island authorities and island communities to help to build pipelines of projects and to offer support, regardless of the island programme funding. That's an offer that we do routinely on various different projects and that's something that we're committed to. We think that it's really important to continue that exactly because of the reasons that you raise around the funding challenges. We need to stay building up the pipeline. We need to stay building up a ready-to-go set of projects so that we're ready to go and we're not at the moment that the money comes along having to work up projects. We need to be doing to work along the way so that we're ready to go. That's super important to address the cost of living issue because surely it's important to keep the money going in locally. One way of doing that is to be ready with projects exploiting money. On the SFT side, we're committed to working with island authorities, island communities and public bodies around that pipeline piece. On the second part of your question, just directly on the assurance on the funding piece, the assurance that we have is that the Scottish Government islands team want to continue working with island communities and obviously with the resource view in the budgets, those issues are working through. The assurance that we have as an organisation is that they would like us to continue working with them and island authorities around that money. That gives you two sides and a direct commitment by an organisation to work with island communities and authorities, regardless of what happens on the money side and then on the second side to work with the Scottish Government islands team to make the best of what we have to make sure that that moves forward. I might be able to be put in writing if that's possible. I just wondered if you could give the committee a progress report on the MPF4 involvement that SFT has. It's also very interested in obviously one of your roles to leverage private funding alongside public funding. Was it ever considered that the national island plan could be modelled in that way? On the MPF4, I'm happy to put something in writing as well if you want some more detail, but we've been working with the planning team. We did a piece of work around the delivery element in particular around MPF4, so that's going to be part of the contribution to that and we're engaged with the team. To me, the MPF4 is a starting point, it's not the end, it sets out the planning framework, it sets out that strategic intent and it sets out the environment in which you can then plan for the next five to ten years and so the delivery and how you implement that is an important part and we continue to support both the planning team and the other parties. Quickly, on the private funding aspect of the leverage... On the private funding for this particular programme, I will defer to Neil on that one. Yeah,