Record levels of infrastructure investment

Key points:

  • Our National Infrastructure Mission will increase Scotland’s annual infrastructure investment
  • Our Infrastructure Investment Plan will focus on three core long-term outcomes of inclusive economic growth, tackling the global climate emergency, and building sustainable places
  • We are stepping up our engagement with the construction sector

To maintain competitive economic conditions in an increasingly global market, and to deliver a long term boost to Scotland’s economy, we will drive forward a National Infrastructure Mission and steadily increase Scotland’s annual infrastructure investment until it is £1.5 billion higher by the end of the next Parliament than in 2019-20. On current estimates that would mean around £7 billion of extra infrastructure investment by the end of the next Parliament.

It is vital that the right investments are made that generate inclusive growth and tackle the climate emergency. Investment in economic infrastructure is a key driver of growth. For example, investment in broadband, transport and utilities provides the foundation for companies to invest and brings new economic opportunities to remote and deprived parts of the country. Delivering Scotland’s climate targets will require the reinforcing of existing infrastructure and much more efficient and ‘smart’ use of available infrastructure, facilitated by new digital communication tools.

The nature and scale of change required to deliver these outcomes has been recognised by the Infrastructure Commission for Scotland’s recent report into our long term infrastructure priorities. As the report sets out, this will require bold and determined leadership from Scottish Government and the wider public sector in Scotland, as well as the UK Government.

Advice from the Commission will help to shape our future infrastructure investment in Scotland. Later this year, we will publish the next Infrastructure Investment Plan – focusing on three, core long-term outcomes of inclusive economic growth, tackling the global climate emergency, and building sustainable places.

The Infrastructure Investment Plan, and accompanying Capital Spending Review, will set out a coherent, strategic, collaborative and outcomes-focused approach that responds to the recommendations of the Commission and helps achieve our National Performance Outcomes.

Our ambitious infrastructure plans will rely on a construction industry that is both well positioned to deliver and understands the wider social and economic wellbeing priorities associated with that delivery. Working across government, we are taking steps to form a refreshed and stronger relationship between government and the construction sector around a set of common goals to help the sector grow.

We are already seeing fruits from this new relationship. We are working with industry and public bodies to address the issue of unsustainable pricing, and discussing how to evolve an industry wide culture of continuous improvement. We are currently developing a sourcing strategy for the Construction portfolio that will encapsulate good practice in the delivery of public infrastructure and buildings.

Construction: Output compared to Public Sector Capital Spend Scotland

The results from this graph indicate a close empirical correlation particularly between the level of SG-supported investment, and activity. Overall construction patterns mirror what the public sector has enabled. The impact of changes in Council borrowing levels can also be seen. Overall, and even whilst not having full fiscal powers, it can be seen that choices made by Scottish Government within its current framework can have a powerful effect.

The EU Horizon 2020 Expert Group recognises notes that nature-based solutions including green and blue infrastructure have demonstrated financial advantages due to a reduction in initial capital expenses and on-going operational expenses and they have been used strategically to recapitalise ageing resources. Nature-based solutions can also offer more opportunities than ‘grey’ infrastructure, as they not only increase the resilience of society to external economic and environmental stresses, but contribute positively to human health and well-being. It recognises these components are essential for sustainable competitiveness.

Water is one of our most important natural assets, and Scottish Water will continue to invest around £600 million each year in our water and wastewater infrastructure, supporting jobs across the economy whilst providing 1.38 billion litres of fresh, high quality drinking water every day, and treating our waste water before returning it safely to the environment.

Flood risk is increasing due to climate change. We will continue to invest £42 million each year on flood protection infrastructure to reduce the impact of flooding on homes and businesses and minimise the damage to the economy.

We are also stepping up engagement with the construction sector by working across procurement, infrastructure, economic development and built environment interests, as well as with our enterprise and skills agencies, to help the sector thrive and grow.

Our Green Growth Accelerator will extend the current Growth Accelerator model to unlock additional investment for infrastructure projects which support our transition to a net zero emissions economy.

The model follows the development of Growth Accelerators in Edinburgh City Centre and the Dundee Waterfront – which combine public and private investment to transform cities and regions.

We will work closely with COSLA, Local Authorities and local economic delivery partners across Scotland as we develop our approach.

Key resources:

Infrastructure Investment Plan 2015

Infrastructure Commission for Scotland

Scottish Water

Nature Based Solutions & Re-Naturing Cities, EU Research, Final Report of the Horizon 2020 Expert Group