 Rhaed PAG, wrth gwrs, oedden nhw'n gweithio i fynd eu cwestru y 24 mwythu yn 2014 o gyhoeddfa economaidd iawn ac y Comertyf yn gweithio felly mae'n gweithio'r ddiddordeb yn siaradau'r ysgolfa. Rhaed PAG sefydlu'r ysgolfa mwy o'r esgolfa, ac mae'n gweithio ein peth i'r teimlo sy'n ddiddordeb, ac mae'n hyn i'n ddiddordeb mewn sy'n ddiddordeb neu elettru. We have apologies this morning from Richard Baker and Dennis Robertson, and we have Stuart Maxwell joining us as a substitute. I'm just clarifying for Dennis Robertson, I'm joining as a substitute, not for Richard Baker. Thank you, I think we probably would have worked that one out for ourselves, but thank you for clarifying that. Item 1 on the agenda, our members content that we take items 3 and 4 in private. Thank you, that's great. Item 2 on the agenda, we are continuing our draft budget scrutiny for the Scottish Government's 2015-2016 budget. We have two panels this morning, I'd like to welcome our first panel from Visit Scotland. We have Alcom Ruffin, chief executive, and Ken Nielsen, director of corporate services. Welcome to you both. Before we get into questioning, gentlemen, there's something you'd like to say briefly by way of an introduction. Thank you, convener. Just a few words, I think, just to bring the committee up to date on the years so far. No doubt we'll get into that in more detail, but I think everyone would agree that in 2014 it's been and continues to be a fantastic year for Scottish tourism if you think about the Commonwealth Games, tremendous success and a tribute to the volunteers, the organisers and the people of Glasgow, which was followed by an equally impressive Ryder Cup at Glen Eels. There's no doubt that Scotland has raised the bar in delivering these major sporting events, demonstrating, I believe, that not only do we have the capability and capacity to deliver such events, but we also have the credibility to continue to be ambitious and to bid for more. You may have seen recent announcements over the last few weeks around the football championships and other sporting events that Glasgow, in particular, has put bids in for. The international media that followed and has been throughout the year has been astonishing, and obviously what we will do is we will bring to you the full economic results once they are ready in spring of next year. Also just a very quick update, and I know that we will be bringing you a full report on homecoming, but to date, by the end of September, the homecoming programme, which has over 1,000 events throughout the whole year, has seen over a million visitors to those events, which I think is a great tribute to the event organisers and the industry which hosts these visits. 2014 is obviously the culmination of Visit Scotland's work with the industry, the so-called winning years, that five-year programme, and is very much the catalyst for the next five to ten years. It is very much about building on the platform that has been created over that period of time. I think that it is also worth saying that in terms of the budget, and we may go into that in some more detail, but we are very pleased with the outcome that we have been able to build on the successes to date, and I look forward to outlining how we do that in due course. Thank you very much. Thank you very much, Mr Ruffhead. We will have an hour for this session, but even though we have some time, I would ask members if they would keep their questions short and to the point, and responses as brief and to the point would be helpful just in terms of getting through the topics. I just remind members that our focus clearly is the Scottish Government's budget, although I am sure that we will stray into other areas. Can I maybe start off, Mr Ruffhead, by picking up on your last point? We have had the winning years strategy, which has now come to an end. Are you confident, looking at the years ahead, that you can maintain the momentum that has been established, and do you feel that the budget allocations from the Scottish Government are giving you the resource to enable you to do that? If I take the issue around momentum next year, I want us to remember that it is a question that is often asked, and naturally so, given the unique nature of this year. Next year, we already have a number of world championships that will take place. We have the world-orientering championships, we have the world mountain bike championships, we also have European events, which will be taking place next year as well, and for the first time we will be hosting the Turner Prize. That is not all. There are other activities, and clearly, in terms of bidding for such events, the gestation period can be up to about eight to ten years. So, there is a lot of work that is already underway to make sure that we continue to build on the events legacy that is left behind. In terms of the business tourism side, similar to events, it is about bidding in advance. I am delighted to say that the business tourism bid fund that we introduced just over two years ago for an outlay of £1 million has generated almost £110 million of conferencing business over the next five to six years. Those are very strong foundations for us to build on, and also, if you look at the amount of aviation access that we have secured over the last 12 to 18 months, that allows us to build on that as well to make sure that people can get here quickly and easily and conveniently. On the budget issue, in terms of budget support, you feel that you are getting the support that you need from the Scottish Government? Yes. As a former marketeer, I can say now that you always want more, but given the circumstances that we are in, it is a very good outcome for Visit Scotland. Clearly, there is no home coming next year, so that disappears from the budget, there is no ride-a-cup, as well that disappears. The net effect is £5 million of an increase, which will allow us to build on the aviation and also the success of the events platform. I will bring in Mike McKenzie, who has a similar line of question. It is not identical, convener, but one of the areas that I was keen to explore was that we had quite a bit of talk and discussion with yourself, Malcolm, prior to, for instance, the Commonwealth Games, to see whether lessons had been learned from the Olympics to the extent that that acted as a suction machine and sucked tourism benefit out of the rest of the country. Visit Scotland made efforts to see that that did not happen with the Commonwealth Games and Rider-Cup and so on. Is it too soon to have any analysis, any understanding of whether or not that strategy was successful? It is a very good point, and it was indeed one of the lessons learned from the Olympics. What we will be doing in the full report is highlighting exactly where the accommodation spread was felt. There are some indicative numbers coming through from the Commonwealth Games, which shows just how far that ripple effect was. The Rider-Cup, and it is only anecdotal at this stage, will be a full report. However, there certainly was evidence that people pre-the Rider-Cup and post-the Rider-Cup were going out around the country playing the various different courses that are available. I think that the interesting aspect about the major events, and I know that the Highlands, for example, some of the numbers have been variable up there, but I think that that is also because the Lost Rock Ness and Castle Stewart, which hosted the Scottish Open last year, did not host it this year. In and of itself, that is about 100,000 visitors that went missing this year, if you like, in that particular region. Thank you. The other thing—this is again an old theme of mine—is that I would contend that there is a lot of low-hanging fruit to be picked that sometimes gets missed as we reach for the bigger looking fruit on the top branches. I know in your submission that you talk a bit about exports, and the committee has a focus on exports this year. It seems to be the case that most of our exports arise from a very small number of pretty big businesses and not much from smaller businesses. Of course, the area that I represent in the Highlands and Islands tends to consist mainly of smaller businesses. That is a sense of link to my previous question. Given that you have increased net budget, given that there are not those big ticket events coming forward in the future, do you feel that there is some scope for more focus on picking some of this low-hanging fruit that I am happy to wax lyrical about for the remainder of this session by the convener's indulgence? Do you think that you could maybe apply some focus to some of the lower-hanging fruit in the Highlands and Islands? The platform already exists, and that is visitscotland.com. We have 9,000 listings, many from the Highlands, and it currently generates 2 million referrals to businesses that are listed on the website. However, there is 8 per cent conversion of those 2 million referrals. The issue is not necessarily about whether we have platforms in the reach, the issue is how we upskill people so that they can take advantage of the business that is already there and convert that to their own profit. That is one of the themes that we will be taking forward with our colleagues in the enterprise companies and also in business gateway, which is partly in response to the FSB report that came out recently about helping people to take advantage in a digital age. I am struck when I travel across the Highlands and Islands that some areas are very good at tourism and get to capture a huge economic benefit. Orkney is the one that springs to mind, and there are other areas where they are just not as good at capturing that benefit. Is there any role or do you think that you could allocate resources towards sharing the knowledge that has been perhaps hard-won in areas like Orkney, with other areas like Ergyll that are not so able to capture the full economic benefit available? We already do. We have what we call an outreach programme, and the programme generally is created and devised by the local areas themselves. We are more than happy to assist. We can even provide workshops and one-to-one sessions with people. I guess that the real focus for the year going ahead, and it actually gives us an in to do this, is the food and drink, the year of the food and drink. You mentioned Orkneyl as a very strong offering in that particular area, and we have worked very closely with the food from Orkneyl and the destination management groups there. I think that part of the problem is that you are talking about fairly small groupings, and they tend to be individual business owners, so it is trying to make sure that we get them together at the right time, so that that suits them, and not when they are busy. Summer, of course, is when they are busy, so during the winter months it is when you will see us ramp up that particular activity. Last very brief question, convener. Do you feel then what you mentioned tends to be characterised by lots of small businesses? Do you think that there is scope for local authorities councils to apply their corporate muscle to achieving better outcomes and collaboration with yourself? I have to say that the cooperation and collaboration and joint planning with local authorities has never been as good. Certainly in my time at Visit Scotland, we work very closely with them all. We have MOAs with all 32 local authorities across the land. It can vary from marketing through to information provision to looking at, as I say, particular topics that are of interest, or using the national planning framework. It can also look at the type of inward investment that is required for that area. Probably what we have to do is find a way to reach those businesses that can prosper but have not had the opportunity to do so. Another piece of work that we are currently looking at with local authorities and the enterprise companies is looking in-depth in tourism in a number of areas. We are looking at four just now, which would be Argyld and Dee, or North Ayrshire, to see how, working in depth, we can look at tourism as a growth generator in their particular areas. That is a piece of work that is just commencing just now, and we will be able to report on that as we go forward. I am sure that the committee will be very interested to see the results of that. In the budget, we have seen an additional £5 million to the planned Visit Scotland budget. By the way, I congratulate you on the events this year that have been exemplary, and I attribute to all the Visit Scotland team and others that were involved. The plan for the £5 million is to allow further investment in the marketing of existing and new domestic and international air routes. How are you going to do that? We work collaboratively with the airlines, so if you take a live example, it is Qatar, which has just started up from Edinburgh. We sit down with the marketing team for Qatar Airways, and we identify the markets, the inbound markets, where the potential that is being identified by the airline is greatest, and we will give us the greatest return on that particular investment. It is integrated into the marketing campaigns that we would run. This year, we have internationally Meet the Scots, which is the theme for the Visit Scotland marketing campaign, and Qatar Airways is basically joint or match fund that particular activity. There will be a fairly strong emphasis with them in Australia and in Asia. Others that we are planning with are the likes of Etihad, which are due to start up next year. We also work very closely with the likes of Emirates, EasyJet, Ryanair, United Airlines, who have just started out of Chicago, and recently we announced WestJet coming in from Canada. All of those are about making sure that they are sustainable. We do not want one-off hits, so they come in and then disappear. Over a period of three to five years, what we look at is a joint marketing plan, and we set targets against those in terms of inbound ratios and also in terms of yield and capacity. I think that is very helpful in having a marketing plan, but in the submission we work in very close partnership with Scots Enterprise and Zions Enterprise. Who is actually doing the selling? It works on two levels. If you like, there is the planning side of it, which is the aviation team that you are talking about that is made up of the various organisations. Who takes the lead in that? How often do you measure the outcomes of what you are planning? We meet very frequently. In fact, we have a meeting next week coming up. What we do is to identify the routes that we think would be best suited for Scotland from an inbound tourism and an investment perspective. We wait the routes so that allows us to prioritise them. We then identify the airlines that can best meet those requirements. The major opportunity that you have is the routes conference, which has just taken place recently in Las Vegas. The whole team goes out there, but they go out there with the airports, because ultimately the deal maker would be the airport. The airlines will negotiate with whether it is Edinburgh, Aberdeen or Glasgow or Prestwick or whoever it happens to be. All we can do is offer up the type of support for any airport and airline. It does not matter to us in a sense whether they come to Edinburgh, Glasgow or Aberdeen or what we are saying is about Scotland or Prestwick. I managed to get through those two questions by mentioning APD, which would help. Your ambition is to grow a visitor spend by £1 billion by 2020? That is the Scottish tourism alliance strategy that came out a couple of years back. That is absolutely right, and we are totally committed to helping them to do that. So the tourism alliance, do they have a different strategy or the same strategy? No, our strategies are both aligned, but the figure that you have— Why do we need two bodies to do that? Well, one is an industry body and the other one is the NDPV. I am just going on because we have had conversations about numbers before and how we are going to grow tourism by 50 per cent in five years or whatever it was. That is a very ambitious project. It is £166 million—we have just cut it by year—a £166 million a year. It is a challenge, but we are not wishing to put you on the spot. Are we going to achieve it? I think that we have a great platform, and we are looking at 2020, and it is all about building on that platform. I think that if you look at the figures over the last five years, which by and large have been fairly flat, which I accept, but I did actually have a look at one of our nearest competitors just across the water. At their lowest point, I had a fall of 25 per cent. I think that what we have managed to do is come through that particular storm in a fairly strong position. That is borne now also by all the various reports that we have seen recently. I referred back to the FSB report, which said that the majority of their members are confident in looking for future growth. There was a report from Barclays that talked about the increase in the value of tourism over the next period. On top of that, the Scottish Chamber of Commerce came out and they had also canvassed their members. Again, that confidence is there. We have a great platform, but it is all about taking the opportunities. I come back to the point that I made earlier. We can set up the opportunity, but we have to convert them as well. That is why I asked the question about who is doing the selling and who is leading that. I just want to ask the question, can you have a name? Probably the answer to Mr Nielsen in terms of corporate involvement, which requires, again, the report refers to the City Convention Bureau and local authorities. How engaged are they in supporting the services that you are looking to provide? Probably one phone, I will come around on that. The convention bureaus, we work very closely with them, with all the city convention bureaus. We also represent, and there are no convention bureaus in existence, we represent those areas. For example, we have a team based in Inverness in our office up there that covers the Highlands and Islands. We work very closely with Persia, also with Fife and recently with the borders, so Dumfries and Galloway and the borders. It is about pulling that together. What I would like to see is an industry body that represents that particular sector, so that you get a cohesive approach to all of this. We can do what we can do, but ultimately it is far better if the industry takes responsibility and is able to determine its own fate because they are in competition with each other. It is as simple as that. A conference will only go to one location. We punch well above our weight in terms of how Scotland generally does, but we can still do more. We have a number of gamechangers. You look at the EICC investment that has gone in. You look at the SECC hydro-arena investment, which takes Glasgow to a new level. Aberdeen is looking to invest in their infrastructure as well, which can only help. We are beginning to see the fruits of that, but it takes time. A lot of it is about building over a number of years. A couple of members want to come in with supplementaries. Can I follow up one point first? We were talking about targets. As you know, we in this committee have taken interest in the past in the target to grow revenues by 50 per cent to 2015. Is it time to accept that that is now not going to happen? We are always ambitious. We are always going to try and do the best that we can. Ambition is a great thing. Why should we not reach for the stars? It is not going to happen. We will know by spring 2015. Just going back to that other figure about £1 billion by 2020, I know that that is not necessarily your own figure, but you are here and the tourism alliance is not. What is the comparable baseline for that? I have seen in your submission £11.6 billion, but that is the total economic impact. What is the total visitor spend at the moment? At the moment, it is £4.6 billion. That would be about a 20-25 per cent increase by 2020 over an eight-year period. That is about two or three per cent a year before even the effect of compounding. Is that ambitious enough? That is a very good question. I think that, like all of these things, it depends on the context in which they were set. When that was set two years ago, the economic outlook was not perhaps as favourable as it is now. There is nothing to say that you cannot revise ambition, but I think that you need something to aim at. If they are overcooked, it becomes unrealistic and people do not want to go for it, because they feel that they can. That was a supplementary question to Mr Roddy's question. You were talking about airports at the time and, of course, coming from Ayrshire, which has a particular interest in Prestwick. What talks have you had with the Scottish Government around tourism for Prestwick airport? Well, the talks that we have had are with Prestwick airport and very much around airlines and which airlines we can go after and try to bring to Prestwick. As I said, they were also out at routes in Las Vegas and held a number of conversations with a number of airlines. Clearly, those discussions will be on-going. As I said, with all the airports, we stand there and we will support them. Perhaps Mr Neilson mentioned North Ayrshire and the review that you are carrying out. Will that be part of the Prestwick airport? Obviously, it plays a big part in the tourism economy, particularly in Ayrshire. Will you be including that in your talks with North Ayrshire? The conversations have yet to begin, so it will be around the assets there. There is a potential that that is a routine, but principally it is around how we get jobs in tourism in that area rather than direct routes to market, which is what the airport is. There is certainly a parallel conversation that would take place. Obviously, the economy does benefit from Prestwick airport being there, if it is working properly. I think that Ken has mentioned that Orkney has been part of the economic geography. It is actually out of heaven. Thank you. It is just to carry on with the most supplementary on the airlines. You mentioned earlier that one of your priorities is the international conference market and business tourism. You also talked in the paper about a number of successes, including various routes from North America and, effectively, the middle and near east. In my experience, business travellers do not like going through hubs because, effectively, two or three flights rather than a direct flight is not particularly efficient or effective, and it is obviously more expensive as well. How do you tackle the problem of the lack of direct scheduled airlines because, again, scheduled airlines and scheduled routes for flights have better time slots than all the rest of it? How are you tackling that particular problem, particularly within the European market, because, effectively, the number of European direct flights from Scotland into Scotland is pretty low? We have a mixed strategy, a point-to-point strategy, which is what you are talking about in terms of out of Europe. We have a hub strategy. If I just dwell a little bit on the hub strategy, you have to also remember that airlines are looking for profitability and sustainability, so they need a balance of people going out as much as we want them to be coming in. It is quite difficult for long-haul to fly directly into Scotland, so you would think that the natural thing to do is to go, as in the past, they would come in through Heathrow primarily. Heathrow, though, as we know, is at full capacity, so we have to look at another way of doing that so that they do not have two or three flight changes. What we came up with was very much this arc from Helsinki all the way down through the Gulf states, so we have Qatar, Doha, Dubai and Istanbul. They work, if you like, as an aggregator of people coming into those cities so that they get onto the one flight, which then becomes point-to-point and keeps it full and keeps the whole thing running. In Europe, it is very much about point-to-point, and what we have done is we have cast a net across multiple countries. Where we are at is not so much necessarily about new routes in there, it is about increasing capacity and frequency. There are one or two gaps that we still identified, and we are working very closely with the airports to try and fill those gaps, but our coverage out of Europe is far greater than it has ever been. I mean that may or may not be true until I am speaking far greater than it has ever been, but it is fair to me that there are no direct scheduled flights out of Scotland to Rome, Madrid or Barcelona. I could go on, but I might be wrong. There are to Barcelona, but Madrid is a very good one, and Madrid acts not just as a point-to-point destination. It also acts as a hub for South America. You have identified one of those missings that I was talking about. There are plenty of flights with German wings and people going to Berlin. They do not go from all the airports, so I think that is maybe what we are talking about here. Do we have equity around the country? It would be fair to say that no, we do not, but we are working on trying to complete some of that picture. That is what I mean when I talk about increased capacity and frequency. It is not necessarily about a new flight because the flight is there, but it is maybe going from Edinburgh or Glasgow. How do you balance that so that you get a spread across the country? I would agree with you, but I think that most people do not mind going to Glasgow or Edinburgh, but the problem is that the frequency and the timings are not... That is demand driven, so we have to make sure that that is why the marketing activity is so important, because we can help to create the demand in the market to make sure that we can end up with a more amenable timetable, if you like, because that is also an issue. You are quite right. Good morning. You mentioned earlier that it is easier for people to get here, and they can do so more quickly than ever before because of increased airline routes. Now, there have been reports in the past. The University of Oxford, I do not know if you are aware of the report, predict and provide, which undertook research into tourism, the net tourism deficit that was actually caused by increased airline travel, and a department for culture, media and sport report. This is 2004, so it is 10 years ago, but it is a UK deficit, but it spoke of a UK tourism deficit of between £15 billion and £17 billion. It very much focused on the fact that while we were increasing capacity for air travel, it was benefiting people in the UK. They were travelling out of the UK, and we were not seeing the same number of tourists coming in, and not only was it about numbers, it was about a spend. A UK tourist going overseas was spending more than those coming in to the United Kingdom. I wonder if more needs to be done to recapture some of those tourists for the UK and Scottish domestic market, if that might help you reach your 50 per cent target for domestic tourism. Those figures are fairly substantial, and I am not quite convinced that we will have closed that gap within 10 years. There may be an impact, but perhaps business travel is reducing that to an extent. I am not aware of the particular report. From what you say, there is certainly a strategic approach that is required. If you go willy nilly after every potential air route, you get into the law of unintended consequences, which is why we do a lot of pre-planning so that we actually look at what is the balance in bound out bound. In terms of actual visitor expenditure, it is really up to us. If the people are here, we have to give them reasons to spend money. I keep saying that you actually want to empty their wallets, but leave them with a smile. We have to defer to your greater knowledge. It goes back to Chuck Brodie's point, which is about selling. It is having the skills to sell, to upsell, to cross sell. If we really are going to maximise the benefits, we have to be better at that. I appreciate what you say about not just going after every route willy nilly, but is there any research being undertaken at a Scottish level on what is happening at the moment? Would that not be something that would be really helpful for Visit Scotland? There is a lot of research that goes on before we decide which routes we are going to go for and the reasons why we go for those. That is then cross-matched with the airline's own research that they would have. Let us not forget that they are able to track their customers and where the customers are coming from and what the demand looks like. We take cognisance of all the information that is available to us. I do not think that any of the routes that we collectively, as a team, have gone out and secured would be put in that previous bracket that you mentioned back in 2004. There is a realisation that if we are going to go out there and bring in new routes, they have to be sustainable but they have to be beneficial to the economy as well. In terms of transport, you talk in your briefing paper about working with Transport Scotland. There is a big emphasis, obviously, and quite rightly, on flights and bringing people in from outside. What about internal transport links? How much work have you done with Transport Scotland in improving them? I represent south of Scotland in Dumfries and Galloway, in particular does not have particularly good transport links. I am sure that must affect the number of visitors that come. We have a very close working relationship with Transport Scotland across a number of areas and strengthened more so through the joint working around the Ryder Cup and Commonwealth Games. What we are about to do is to go into a joint session with them to look at all those issues. Infrastructure is one of the key foundations from my perspective of growing the visitor economy, because people have to be able to get around the country, not just into the country as quickly and as conveniently as possible. We have worked very closely with rail transporters, which is also in the report, had a very good working relationship with First Scot Rail. We are already in contact with the Bailio to see how we can take that forward, that new relationship when that starts. We are very aware of those issues, but ultimately Transport Scotland has to prioritise their investment as well. We will certainly be pushing as hard as we can to make sure that major arteries into those areas are invested in it. Would you say that Dumfries and Galloway, particularly in terms of public transport, the lack of electrified train line, for example, was a barrier to encouraging tourism? Yes, I think that Dumfries and Galloway suffers slightly from its geographic location. Often down there people will talk about it being the kind of forgotten corner. Despite its obvious attractions. I think that it is about sitting down and looking at priorities and looking at how, at a local level, but also at a national level, we can address some of those issues. Thank you very much. Mark, have you been wanting to come back in with another question? Yes. I'm not sure whether you covered that earlier or not. No, although Stuart Maxwell did a good job of it. On the subject of business travel, I talked a lot about the routes. I was quite interested in what you had submitted about the conference bid fund. I represent Edinburgh Central, so I have a little bit of a constituency interest there. One of the things that was missing was the figure for how much it was. I think that I caught you saying that it was £1 million earlier. That's a spend so far. What's the total budgeted for that? That's about £108 million revenue generated. And what's the total budgeted for the fund? Oh, £3 million. £3 million over what period? Well, it was over a three-year period, but I suspect we'll end up mainstreaming that activity. That's quite a good performance for return on money spent. What kind of research has done on that? Is it the same level of rigor as the homecoming research for the return? Yes, absolutely. I'm certainly more than happy to share that with you if you'd like to have a look at it. I'd be quite interested. How much does the capital take of this? You mentioned here that St Andrew's store in Weinverness and Perth, and I assume that Hydro and Glasgow will have caused a bit of a shift there across the central belt, but how geographically spread is this? It's fairly geographically spread. It's fairly well spread, actually. In many cases, it's self-selecting, so if a conference goes over, say, 3,000 delegates, then it tends to default to another location. It's about capacity in many instances, but you'll be delighted to know that my colleagues just came back from the American IMEX and secured a conference for 1,000 delegates in the EICC. We are working across all the cities and all the regions. It's not about a focus on one in particular. What I would say, though, interestingly enough, if you look at the breakdown of the type of conference that's actually been secured, there's a healthy majority that sits in the life sciences area. That's the whole point about business tourism, is that you can take the strength, Scotland's strength in certain sectors and apply those to the whole business conferencing market, because there is a credibility, there's a reputational strength and the two are very synergistic. How much work do you do with the likes of Scottish Enterprise? I noticed in your submission as well that there was a prioritisation of the key growth sectors, and clearly you want people to not just come here and go away, but to make an impact while they're here and for those connections to happen, and that would seem to be their specialty. Is that something that you've developed as an area of work? Yes, we try and join up the dots so that when you have people with a specialism and they come into whichever area it may be, they have the ability to go on fan trips and look at facilities, to meet experts locally and, ideally, to have the opportunity to talk to people here about inward investment, but, as you say, that's very much about joining it up, particularly with SDI. Final question on this. Your further submission highlighted that it was introduced as a direct result of representations from Scottish destinations. Was there a pressure from industry major exhibitors as well, or was it the venues that were largely pushing this? I think that it's a bit both, actually. Everyone understands the potential that's there and everyone has a vested interest in it, and I think that's healthy that venues and the destinations all want to get together and work together. I think that the trick is to make sure that it's a cohesive aligned plan that we're all saying the same thing, and that means that we'll be able to shout much louder. I really wanted to ask you a question around accessible tourism, because in your submission you mentioned that it generates £391 million for the economy, but it is a largely untapped market. What is it that you're doing to encourage more of that to come into our tourism industry? We're working on a number of levels. Obviously, we're working with the industry itself, and there's a lot of investment that needs to go in to the infrastructure so that we can cater for people with various needs. To do that, frankly, you need to build a business case, because people are asking them to invest, and they want to see a return on that as well. We've been doing that. We work very closely with a number of groups that give us advice on exactly what type of premises or facilities are required for the various groups. Whether it's the dogs for the hearing dogs, or whether it's guide dogs, or working with various carers that are out there, we have to be very cognisant of the difference in terms of requirement. Sorry to interrupt. How responsive is the industry then to open up and be prepared to invest? It's like all these things. There are those who are absolutely exemplary as the best practice, and there are those who perhaps haven't seen the opportunity because they haven't thought about that particular opportunity. What we've been trying to do over the last 18 months or so is to work with the industry to highlight that. We have a number of people from the industry who are very passionate about it and who act as ambassadors for this particular area. There's also a lot of work going on in Europe. The Italians are leading on this particular area, and we're also sharing knowledge with them in close contact with our colleagues in Italy. The Australians have been leading in this particular area for years. Again, there are a lot of examples that can be taken out of there and brought back to the Scottish industry and then shared with the industry. I think that there is a growing realisation that not only is it a business opportunity, but it's something that we should be doing and that people should not be excluded from having a holiday in Scotland because of a particular disability. I wonder if your partners are as responsive. Are they keen to encourage this type of tourism and are there the skills there to provide that? You touch on a number of points and you're absolutely right. These things can't happen overnight. You're talking about investment, you're talking about skilling, and you're talking about planning as well, because obviously the planning permission would be required for all of these. We have to bring all of that together and then move it forward at a pace. We've moved forward quite a lot. We had the accessibility statements and they were implemented during the Commonwealth Games in Glasgow, but that's only a small step. There's a lot more that we still need to do. It's one of the themes that we'll be carrying forward into next year and beyond, because it's not going to be a 12-month exercise. Can I just ask a follow-up, if I can, on that point? We had a debate in Parliament on accessible tourism a few weeks ago, and a number of members here have spoken. One of the comments that was made by a whole range of people across the chamber was on the question of accessibility to Waverly station, where previously, if you were in a taxi, you could get down to the concourse level. Out of the rain now, that is no longer available, so people who have mobility difficulties have got to travel some distance. Also you get a scenario now where tourists arriving are queuing in the rain to get a taxi whereas previously they'd be undercover. Is that something that Visit Scotland has had any engagement with Network Rail and ScotRail on? Those comments were passed on and I think it's probably a timely reminder for me to follow up on them. I make no apologies for going back to the links in the airport links and you'll understand why. I must say, in that context, I'm kind of surprised by Mr Nielsen's answer about Prestwick, which suggested to me, frankly, that I would hope that Visit Scotland is much closer to what's going on in terms of the proposed capital and management infrastructure, because you play or will play a key role. Let me just ask my captain Kirk question. New Key in Cornwall is one of the areas targeted for the spaceport, as are some Scottish airports, not just Prestwick, but Stornoway. What engagement have you had with all of the... I have to tell you, I've already asked this of other organisations, so it would be interesting to find out what links you have and what role you're playing in supporting the space project for Scotland? At this stage, none. Funny, that's the same answer that I got from all the other organisations. Should we not have somebody or a group focusing on this in your opinion? I think if it... For me, someone asked me this the other day, actually, and I was saying that I haven't seen an awful lot of detail around it, so I've heard of the concept, understand what it is that they're talking about. You do know that there's a full report being produced on this. Well, I haven't seen it, so that's why I'm saying... Thank you very much, I'd be most welcome. But I do think, if it's a serious proposition, we've got to look at it seriously, and I guess I just need to get myself up to speed, talk about reaching for the stars. I'm somewhat concerned, the CEO of Visit Scotland is saying if it's a serious proposition. Well, I haven't seen the document, so I can't comment on the context of the document. From a tourism point of view, I know we're talking long-term. Surely it is a serious proposition? Well, I think it was Mike Mackenzie talking about the low-hanging fruit, and I think that's maybe a slightly higher fruit to pluck from a particular tree, but we certainly look at all opportunities. Would there be internal tourism from extraterrestrials visiting us, or is it the other way around? I'm not sure how the visa system works on this one. Okay, thank you. Well, I think that's probably exhausted our list of questioning, unless anything else people want to bring up. So I think that this leads me to thank you both for coming along this morning. Thank you for your time, and we appreciate your input, as ever, and your help to the committee with our budget process. Thank you. I will have a short suspension now to allow a change of work for the next panel. Right, if we can reconvene. We're continuing our scrutiny of the Scottish Government's draft budget for 2015-2016, and I'd like to welcome our second panel this morning. We have three familiar faces for the committee. Jenny Hogan, director of policy, Scottish Renewables. Dr Sam Gardner, who's head of policy, WWF Scotland. And Norman Kerr, director of energy, Action Scotland. Welcome to you all. As we've got written submissions from you all, I'm not proposing to ask you to make opening statements, and I'm sure we'll tease out the issues in terms of the questioning. There are probably two broad areas. We want to address one on fuel poverty, the other on support for renewables. I'm sure there'll be other areas that we'll touch on to as we get through the session. Can I remind members if they would keep their questions short and to the point as possible? And similarly, answers as focused as possible would be helpful in getting through the topics in the time available, and I'm planning to run the session for about an hour, maybe a little bit longer if time runs on. And I would ask members perhaps if they would, in the first instance, to direct their questions to a particular panel member, but then, if you want to come in and add something to an answer somebody else's given, if you just catch my eye, I'll bring you in as best I can. Can I maybe just start off then and maybe initially address this question to Mr Kerr on the fuel poverty issue? We know there is a statutory duty under the Housing Act 2021. On the Scottish Government to eradicate fuel poverty as far as reasonably practical by November 2016. Now, this will therefore be effectively the last full budget from the Scottish Government before we reach that target date. In your view, is there enough in this budget to allow that target to be met and, if not, what more needs to be done? I think the straightforward answer is no. The budget has remained fairly static over the last couple of years and, indeed, over the last seven financial years, the average budget has worked out around about £60 million. That's some way short from the call that Energy Action Scotland made in 2006, where it requested £200 million a year. We don't believe that that has actually been attained. If it has, then perhaps over the last year or two, but it's not been consistently contained, achieved over that period of time. What needs to be done? I think that if I was presenting a budget to my own board of trustees, they would ask me, does the budget meet your expectations? I think that I'm asking the Scottish Government if this budget meets their expectations. I believe that the answer is that they don't really know, because there's not been a full cost analysis done by the Scottish Government on what should actually be spent to eradicate fuel poverty. Both ourselves and WWF and others have come up with varying sums of money that are all there to be taken apart by colleagues from analytical services, but we have not received that type of detail from the Scottish Government. We've got a budget, but we have no idea whether or not that is fit for purpose. Do you think that the Scottish Government is just stabbing in the dark when it comes to the figures that they are proposing? I think that the Scottish Government has taken account of the committee's request for £200 million a year and latched on to that to try and deliver against that. I don't believe that they've made an independent assessment of whether or not that £200 million is sufficient and if it's not, what actually needs to be delivered. The £200 million figure that the Scottish Government has said that it will contribute to that and the balance will come from the Eco Schemes Energy Company obligation. I remember when we did our budget report last year, we expressed some concern about the difficulty that we had in getting accurate information as to whether the amount of money from Eco that was expected was actually coming forward for Scotland. Are you clearer now than we were last year as to what's happening with Eco? I think that Deck and Ofgem have provided some figures that suggest that Scotland achieves around about 11 per cent of the Eco spend, so it seems that we are punching above our weight. The question, however, is what that's actually going to fund. Given the current Eco rules, we are led to believe that that has funded—or the majority of that funding has gone on houses that are connected to the gas grid to do boiler replacement. We're not tackling the areas where fuel poverty is highest, which is those off the gas grid. We're spending money that's undoubtedly true. We're spending more Eco than we might otherwise do, but what we're spending it on is the difficulty. I'll bring Dr Gallagher in on a minute, but just one more question if I can. In your view, when the Scottish Government is saying that they're expecting Eco to make up the bulk of the £200 million, that isn't happening, because the Eco money is actually being spent in other areas. I don't think it will happen over the next two years either because of the changes to the Energy Company obligation. Over the past few months, we've seen the delivery of energy efficiency measures in Scotland tail off quite dramatically because of those changes. Dr Gallagher, do you want to— Thank you. Just a quick point to elaborate on what Naurie said, which was to highlight the fact that the Scottish Government has acknowledged that Eco is going to be cut by approximately £50 million in Scotland. What I would be looking for in this budget is a reflection of how the budget responds to that projected cut in funding. Given that there is a high reliance on Eco, you'd expect there to be some means to mitigate the impact of that, and that's not obvious. The other thing to just flag, which is related to this, is the fact that the RPP projects an increase of emission savings between now and 2016 of 70% from this equivalent line within the RPP that reads—well, doesn't automatically read across, but it's the closest to the budget. We've got a context in which there is a cut in funding from Eco, a projected 70% increase in savings from a line which is supported through this budget, and a very clear statement from the UK Commission on Climate Change that greater resource or greater support is needed from the Scottish Government on its energy efficiency agenda to hit these targets, and yet the budget as both WWF and Energy Action Scotland's evidence suggests is a standstill budget, one that doesn't seem to reflect that external context. So this Eco contribution is coming down, and the Scottish Government are not making up the difference. All right, and no number of members want to come in and pursue some of these issues further. We'll start with Mike Mackenzie. Thank you, convener, and I'm just going to pick up on that same theme that you have been discussing. I mean, one of the difficulties it seems to me about the fuel poverty target is that it's actually a moving target, and I just wonder what the witnesses feel about that both, you know, in terms of energy price inflation, in terms of the decline in real wages, and what effect, I mean, I've heard from constituents who had interventions that took them out of fuel poverty, you know, five or six years ago, who are now back in fuel poverty. So I wonder in terms of the moving target, is it realistic for Scottish Government, say, to undertake a study and analysis, such as Norrie has been suggesting, that it wouldn't be very quickly out of date in any case? I think you make a number of good points there, Mr Mackenzie, but what I would say to you is when we initially looked at how we could address fuel poverty, there was an expectation that that would be very much reliant on housing standards and that if you brought all houses in Scotland up to a certain standard of energy efficiency, then the impact of rising fuel prices or indeed lower wages would mitigate against that. If you study the house condition survey over the past 10 years or so, what we've seen is that there has been some movement in terms of the energy efficiency of homes that has gradually increased, that's undeniable truth, and indeed, if it had not been for that, then fuel poverty would be at a significantly higher level. But what we have seen is that there are certain groups of housing that continue to be exceptionally low in terms of their energy efficiency. In our view, the best way to mitigate against rising fuel prices and potentially falling incomes as people move in and out of employment is to insulate homes. Therefore, what we really need to do is set a standard and when Energy Action Scotland set the budget of £200 million back in 2006, we believe that to be if a home was to reach a level of a national home energy rating, scheme rating of seven, then that would have a particular impact. That may well be out of date now, that may well be an eight now, but of course in terms of consistency, we've now not reporting as much on NHER, we're reporting more on EPCs, so yes, I take your point that things can be out of date, but unless you actually put a marker down and say what your achievement is going to be, then you have no idea whether it's out of date or not. I think that's what I'm trying to suggest, that we've not had that marker from the Scottish Government that says we will achieve x level of energy efficiency for whatever percentage of homes within Scotland by a certain time, so we've not got that and it's only now that the Scottish Government have brought forward a group to look at the private and private rented sector and in terms of energy efficiency standards within those areas, but that's unlikely to become legislation until 2018 and it's then likely that there will be a period of introduction that allows people to bring their homes up to that standard, so we're significantly away from that and my point I suppose is, yes, things can be out of date, but if you never actually set the marker, then we don't know whether we're achieving that or moving towards it. I mean, what you've said I think is very interesting and a meaningful contribution. Would you agree then that the fuel poverty target and the way that that's expressed perhaps doesn't properly capture this issue and direct us to where we need to or how we can better address it? If I just perhaps elaborate slightly on what I mean by that, the definition of fuel poverty is 10 per cent of income being spent on fuel. If you drill down and if you look at some of the studies that have been done recently, for instance, on Orkney, on Shetland and on Western Isles, you'll see perhaps the more interesting figure is extreme fuel poverty and would you say that the previous approach of picking the low hanging fruit, whilst that may have been valid up to a certain point, perhaps should give way in favour of an approach that looks at dealing with extreme fuel poverty and that one of the problems from the macro perspective is when you crunch the numbers, may it not be the case that a more targeted approach would actually be more effective both in terms of reducing the fuel poverty statistics but also in terms of capturing the carbon saving benefit that Dr Garner might be just as interested in? There are a number of points there that could probably take up the rest of the morning. In terms of targeting, that's exactly what the Scottish Government is trying to do through the HEAPS programme. That was a recommendation by the Scottish Fuel Poverty Forum that said that we should move to an area-based approach and that area-based approach should be made on need. It encouraged local authorities to come forward with projects where there was a high level of need, where the local authority had undertaken work or indeed work had been undertaken by others to show areas of dense fuel poverty. That was where the money was to be spent. You could say that that's not been particularly successful because local authorities have looked at a much wider area and said that we've got an area of need and there's an area of need here and there's an area of need there. They've not actually, in my mind, gone to the stage of saying is that an area of deep fuel poverty, is that an area where we just need a lot of housing repairs? I think that we could become a bit more targeted but indeed, as I said, that's what the Scottish Government is trying to do through the HEAPS programme and what we've tried to encourage local authorities to do in bringing forward their proposals to spend the HEAPS money because they do need to bring forward proposals to access that funding. You'll be aware that the funding is given out in two parts. Of the £60 million for HEAPS, there is a straight allocation across all local authorities. In the second £30 million, local authorities are invited to bring forward projects of specific fuel poverty interests. In other words, while the demand is greater, there will be more money allocated to that. Interestingly enough, the Western Isles punches well above its weight in that particular area because they can demonstrate the need, the depth of fuel poverty and the solutions that they've got to tackle that. On your question around whether or not we should move to look more at extreme fuel poverty as opposed to fuel poverty where people are spending 20 or 30 per cent more, I think that the danger there is that we somehow play down the people who are simply spending 10 per cent when the rest of us, collectively, are still spending between 4 and 5 per cent. We are at risk of minimising the impact of fuel poverty, but I take the point that perhaps targeting needs to be more effective. However, as I said, that is the direction that I travel that the Fuel Poverty Forum has suggested to the Government that it has accepted. I think that we just need to work with colleagues in local authorities and housing associations to make that much more effective than it has been just now. That brings me on to a whole plethora of points, but it seems to me that you were suggesting an approach that is more housing-based, treat the house rather than the person. However, that implies a different measure than the fuel poverty measure, which is the person. Do you spend more than a certain percentage of your income? It seems to me that you were suggesting the treat the house approach being a more rational and therefore perhaps a more effective approach. In that sense, would you say that the fuel poverty target per se that we have talked about for years and years is a target worth aiming at, or should we be looking at an approach that is directed towards treating the house? I do not think that the two are necessarily poles apart here. I think that what we need to have is housing that people can afford to stay in. If we take the opposite of fuel poverty, that is often described as affordable warmth. A number of housing providers have worked out what affordable warmth means. They have perhaps set a target based on levels of income derived from benefit and said that we want to achieve affordable warmth in this house type for x-mount of pounds per week. They have gone to say, what do we need to do to ensure that that is the case? How much insulation should we need to put in? What energy efficiency level of the house needs to be? That may well be an approach that the Scottish Government needs to take in saying that if houses are to be affordable to live in and to address fuel poverty, then what is the measure of affordable warmth? You can turn it in its head, but the whole house approach going back to what does that achieve while it actually achieves your carbon savings. It tackles demand-side management in terms of energy, energy production, carbon reduction. There is a whole range of things that the whole house approach brings, not just the affordable warmth. Very quickly, but perhaps it might be best to wait for Mr MacKenzie's question and then see if I can follow on from that. The final question is a kind of linking question, because I was hoping to link. We have talked a wee bit about eco and the Scottish Government fuel poverty measures, if I could generalise, are designed to be complementary to what the UK initiatives are, and that seems to have been in the past perhaps a sensible approach, but one given the uncertainty of eco. First of all, it was stopping, then it was reduced. Now I'm not quite sure it might be back on again, but it seems to be a very uncertain environment, affecting an awful lot of projects on the ground. District heating schemes, for instance, that have relied on an eco top-up, but by their very nature the pre-planning part of those schemes can extend over a fairly long time period. Those are now being faced with uncertainty, but I was hoping to link this with renewable energy, because energy market reform has seemed to have created similar uncertainty. I just wonder about this general approach of attempting to be complementary. I mean, it's not talked about all that much, but the rost, the renewable obligation Scotland, was taken away. That was a power that was snatched back by Westminster, but this whole general uncertainty, how do we get over that? How on earth do we provide coherent rational support within the budget in over a longer term that's actually going to be effective in the face of all this uncertainty? Can we have some fairly brief responses to that long question? The brief response to that is not to have a two-thirds-year budget reliant on eco, simply to acknowledge that it won't deliver everything. It's not particularly well suited for rural areas where, in terms of carbon saving, the best carbon saving is fuel switching, to switch from electricity to gas. That won't happen, so, therefore, don't build a budget that says you're going to get two-thirds of your money from something that you know is unstable. That needs to be reflected in your budget, and, indeed, as Dr Garner already alluded to, the budget this year should have recognised that failing in eco and should have been significantly higher. When we set the target, eco was not around but it was still about making houses more efficient. We recognise eco has failings. It said failings from the very start, and the budget should have reflected that. Sadly, it's not. Do you think that the Green Deal suffers from similar shortcomings and failings? The Green Deal suffers from many, many ailments. The biggest one is the golden rule, which makes it financially unsuitable to address fuel poverty. It's more linked to people who have money, who can provide the initial capital, and who can repair that money over significant periods of time. The Green Deal was never about addressing fuel poverty. It was simply to encourage those who could take out finance to take out that finance. Mike, you've had a very long crack of the whip on that. A lot of other members want to come in. Dr Garner, I think it's still got the answer, you're pretty sure. I'm convener with the help of Mr McKenzie, and I left it. So, to go back to Mr McKenzie's first point about the fact that it's a shifting target, what, to be brief, would look to see is a recognition of that in the budget, and therefore a change in the funding available through the budget to acknowledge the fact that the external world has changed. That we've seen, as Mr Kerr alluded to, that the budget has largely stayed in the region of about 60 million per annum for the last seven years, and in that wide environment we've seen some significant changes, in particular this year with the cut to eco, and therefore it would be reasonable to expect some measures of mitigating the impact of that reduction in eco in the budget, which we don't see. But I think your bigger point about certainty is absolutely critical to not just the energy efficiency agenda, but the renewable power sector and the renewable heat space, particularly where you're looking at large infrastructure projects which have high capital costs and significant risks, and trying to bring those down. And I would like to introduce the idea that we look at the Scottish Government's infrastructure investment plan as the means of attaching greater certainty to improving the energy efficiency of our housing stock. So in the infrastructure investment plan there is a line that refers to the spending of heaps effectively, but unlike other projects, the way that it's described, it's not so much as an infrastructure project but as a budget spending line, there isn't a conclusion. You don't build a bridge at the end of it, you don't end up with a housing stock that is improved, you end up with having spent this money, and so you don't have the confidence and you don't have the certainty that you're achieving a particular defined outcome. And I think it would be very valuable to explore the role that the Scottish Government's infrastructure investment plan could have in bringing much greater certainty to that, given that this is ostensibly an effort on the part of the Scottish Government to improve the public good, target funds so as to cut carbon emissions, alleviate fuel poverty, it seems it's deserving of inclusion within the infrastructure investment plan. And that, I think, is equally relevant to the district heating space, which we may come on later, where there needs to be far greater certainty about what the level of ambition is with regards to district heating, where the geographical focus for that should be, and once we start to identify that, we begin to tackle some of the high costs and risks associated with where does this infrastructure go and how is it going to be funded? Okay, thanks. Now, I've got a whole lot of members who want to come in on fuel poverty, so if we can try and stick with fuel poverty first, and then we can, perhaps, I know Jenny, you've been sitting there very patiently, but we can perhaps come on and talk about the other issues later. Margaret McDougall first. Thank you, convener, and good morning panel. Just from what we've heard so far from the panel this morning, is it correct to say that the budget, as it is at the moment, will not help the Government to eradicate fuel poverty by 2016? Yes. I think that the straightforward answer is yes. So, and we've heard from Mr Garner and both Mr Kerr, as well, mentioned heaps. So the amount of pounds allocated for energy efficiency and policy implementation has fallen 9.3 per cent from the 2014-15 budget from £10.8 million to £9.8 million. How will that impact on heaps and which seeks to offer increasing flexibility for councils and funding? I think that the heaps flexibility that you mentioned has brought a number of benefits, and that's to be welcomed. There has been a recognition that the energy company obligation will not fund everything that it should. Therefore, the Scottish Government has very helpfully gone back to local authorities to suggest that it can use heaps in a slightly different way. There is a slight reduction in the budget, as you've highlighted, but again it's back to the well. No reduction is to be welcomed, as whether local authorities in particular can use that budget a bit more imaginatively than they have before. I'm not saying that it will have no impact, but local authorities have been given more leeway now in which to conduct the work that they want to do, and that's for the good. I think that many of the local authorities had energy efficiency officers, and because of cuts in their budgets, we've lost some of those. Would that be one of the ways in which they could address the issues around fuel poverty and eradicating retrofitting, for example? I think that we've seen local authorities being successful in applying for the secondary funding, where they still retain a very strong ethos in terms of delivery of energy efficiency. There is a group that is called the Energy Officers Network, or it used to be called Sean, the Scottish HECA Officers Network, that meets on a regular basis to discuss the matters of energy efficiency. I think that it is of great regret that when the Home Energy Conservation Act 2019 came to an end, the Scottish Government did not renew that in some way that placed a duty on local authorities to continue to deliver good work. Just recently, Mr Mackenzie and his colleague Mr MacArthur wrote to the Fuel Poverty Forum about the work in Orkney, and the forum noted that the impact of not having an energy efficiency officer for some years meant that Orkney was really coming from a standing start. I'm delighted to say that they've now introduced an energy efficiency officer, but I think that they've gone backwards in that respect. Hopefully, they'll pick that up and move forward, but I think that, as I say, the local authorities that have done well in gaining not only additional Scottish Government funding, but additional funding from ECO have been those local authorities, while an energy efficiency officer is at the heart of their delivery in terms of their local housing strategy. It's a very good point. Other than finance, is that something that local authorities could do to help with eradicate fuel poverty? There's no funding available from the Scottish Government to fund an energy efficiency officer's post, and it's down to individual local authorities whether or not they see that as a priority. We believe it is, and sadly, when the Home Energy Conservation Act came to a natural end, that it was not replaced in some manner that gave additional duties to local authorities. Very quick follow-up on that. Do you have a detail or a list of bi-councils that have energy efficiency officers? Do you have available somewhere the information as to how much heaps money was allocated last year to local authorities and how much they actually spent? The figures on the spend of heaps officials tell us that all monies have been allocated, and we should know by the end of the year whether or not it has all been spent. Again, helpfully, there was an allowance of carry-over, so if the money was allocated, then local authorities could still spend it into the following financial year. As I said, that's been helpful. Whether or not it's been successful, only time will tell. The difficulty that that has is that if a local authority is allowed to spend a financial year's allocation up to September of the following year, then the start of September of that following year's budget, then they are always playing catch-up. Nonetheless, it allows them to use their budget in a better footing. Is there a list of all local authority energy efficiency officers? Yes, there is. It's not the fact that some don't have a recognised officer, some do, but it's also where the officer sits within the council and whether or not they are at a particular level that reports into committee, or whether they are three or four levels down the tree. Do they have agreed outcomes? No. Thank you. Reducing to co-poverty. Where are we with it? It seems to have slipped below the radar. I think again in terms of where we are, we now move to the energy performance certificates, the EPCs. If you look at the Scottish House Conditioning Survey, you will see that there is a gradual movement of houses moving up the scale. That's to be welcomed. Most houses are now a band C or a band D. We really need them to be band Bs or band As, so we are moving in the right direction, but the time that has taken us to get there has been significant. I think back in 1996, the average, and I'll go back to NHER now, the average NHER score was something like 4.1. It's now significantly higher. It's now 6.8 or something, so we're moving in the right direction, but I've got to say that the houses that pull that up are houses that are owned by local authorities and housing associations. The houses that perform poorest are private and private rented sector homes, which make up the majority of homes within Scotland. The biggest part of that private sector housing is that that was undertaken through the right to buy, so people have bought their homes. The mortgage has been less than the rent, but they've not been able to maintain their home and invest it in their home, and that proves a continued difficulty in trying to provide energy efficiency measures to those households. Just to put some numbers on what Mr Kerr was saying, the latest figures that we were able to lay our hands on suggest that 46% of homes of less than 200mm of loft insulation, still a third of homes are needing of cavity wall insulation, and solid wall insulation, which has effectively been static since, well, there's been a 2% change since 2009, and 89% of those properties don't currently have some insulation to address that solid wall feature. There's a big job to be done, and I've been looking for an opportunity to just hide, and I know this doesn't work on the record, and you may not be able to see it, but I'll submit it maybe as supplementary evidence, but basically it's just a graph taken from a Scottish Government presentation. The blue line tells you the emissions that we've seen from their residential housing sector since 1990, and the red line tells you where the RPP projects emissions reductions to go. There is and remains a very distant, well, a very different trajectory that we are projected to be on, and that highlights the challenge that both those figures that I've just read out, and the fact that the UK Committee on Climate Change says there's a significant job to be done if we're to match the aspiration or the legal ambitions of the Climate Change Act. Well, obviously the private sector is bringing down the efficiency of our housing stock, so what incentives could this Government provide to encourage more private sector involvement in that? I think we've seen successive Governments since 1994 try to provide encouragement through the energy company obligation and its forerunners through the energy assistance package that Government fund and its forerunners back to 1999. It has been a sector that has been notoriously difficult to engage with. I think that we are now at a stage where we have provided all of the carrots to the sector. We now need to look at legislation to encourage or to nudge people into moving, into taking up the offers. I think that it's really hard. If you go and hire a car, the car will be roadworthy and it will have all of the things that it needs to have to ensure that you are safe on the road. If you go and hire a house or rent a private sector house, there is nothing other than a fire safety certificate that says that that house will not be detrimental to your health. There are no energy efficiency standards, there are no standards in terms of provision of heating or insulation within those homes. If we are honest, in many cases, the rental of those properties that we believe to be substandard are significantly higher than local authority rents, where the local authority is providing a much higher level of standard of home. Perhaps an opportunity missed in the recent housing building. I just want to come at the lack of action from another angle. Clearly, this is having a massive impact on our inability to meet our climate change targets. Stop climate chaos has emphasised leaky homes as one of the major areas that we need to address, but it impacts on people's health, children living and studying in cold, damp bedrooms. There are potential savings, I feel, to be made by investing in this. In terms of job creation, there must be huge opportunities. Has any work been done to look at the preventative benefits of investing properly in insulation? It does not make any sense that we are still building substandard poorly insulated homes at this point in time and that we have not retrofitted in the way that we need to, but could we be looking at this as a huge opportunity in terms of job creation, in terms of cutting emissions, in terms of making bills more affordable for people given the challenges with low wages and so on that we currently face? I will take an initial stab. There has been quite a bit of work done by any number of different organisations, but the one I will just highlight, which is perhaps the most recent, is a piece of work by Consumer Focus Scotland, which highlighted that there was, in the region of 9,000 jobs, could be created by 2027 to bring our housing stock up to a fit state. There was an initial short-term job boost of 3,500 jobs. There was a reduction in gas import costs in the region of £1 billion and an average reduction in fuel bills of £505 in treated households. That is one study commissioned Cambridge Econometrics to do a piece of work that looked at the macroeconomic benefits to the UK of delivering on our fourth carbon budget and that had a big piece in there about the wider benefits of improving our housing stock. Those same messages are echoed there. WWF has done work in the past looking at what the job creation opportunities were about getting our housing stock up to a C grade by 2020 and came to figures of about 10,000 job creation. So I'm sure it's possible to argue whether or not it's 10,000 or 6,000, but there are clearly health benefits to being people living in warm homes, which aren't damp, tackling asthma, potential NHS benefits through the preventative spend agenda. There are job creation opportunities and fundamentally there is the incremental reduction of our reliance on gas as a fossil fuel. In terms of the social impacts, Dr Gardner mentioned savings to the NHS. Professor Christine Liddell from the University of Ulster a couple of years ago did work for Save the Children. Her research found that for every pound spent on energy efficiency there was a further saving of £42 to the NHS. In other words, it was making homes more efficient, there was lys asthma and other illnesses that were out there associated with living in a cold damp home. Indeed, some other work done, I think, through marmot, I may be wrong, but that suggested that the excess winter deaths in the UK around 40 per cent of excess winter deaths could be directly attributed to living in cold damp homes. We know that there is a health impact there. As I said, Professor Liddell's work shows that if we invest in energy efficiency, then there is a positive impact of further saving to the NHS. Thank you both for those comprehensive and useful responses. I have one more question to Dr Gardner. It is about your point number one, that improving the energy efficiency of our housing stock should become a national infrastructure priority. I could not agree more. Do you think that that is not happening because it is very difficult to unveil a plaque saying that we have addressed fuel poverty in this country? Is it not happening because it is going to take more than one Government term? It definitely should be a national infrastructure priority. Do you think that through educating people about the importance of it, politicians will feel more able to invest properly in it? A sort of awareness raising campaign about what needs to be done and why? I think that we have just outlined in a very kind of overview fashion the real substantial public good benefits to tackling our housing stock. Those are strong arguments that any Government should get behind and give certainty to the achievement of whether it be job creation, import reduction, health improvements. I think it is a very good question and one that could perhaps be directed to the Scottish Government when they come before the committee as to why it is that we have a situation whereby the Scottish Government puts priority on and the right level of ambition attached to improving our housing stock, but has not translated that into a clearly funded package that will give confidence that it is going to actually be achieved. Yet we see the similar level of certainty given to other infrastructure projects, whether that be a bridge or a road development or something else. Why is it and maybe you have touched on something, there is not a plaque to be opened once you have retrofitted every house in Scotland, but what you do have is household income better off, as we have said, job creation, better health in those places, tackling a fuel poverty. It is clearly in the public good to give the certainty to that agenda and the infrastructure investment plan is the appropriate place to lock it down. I would encourage the committee to explore that if you feel it is appropriate with the Minister when they come before the committee. Very quickly, what would be the total cost in terms of improving the housing stock to eradicate fuel poverty? What do you estimate? If you go back to the very start of my evidence, that was what I was calling upon the Scottish Government to come up with the figure. I think that figure is unknown. We can certainly take a stab at it and have a guess—$10 billion. We have an opportunity in the not-too-distant future that the Scottish House Conditions Survey will be released by the end of November, beginning of December. Within that there will be figures on the numbers of fuel poverty, figures on the energy efficiency of the housing stock and, from that, it is certainly within the Minister's gift to ask the colleagues who put that together in analytical services to come up with a figure that says, if all homes were to reach a certain energy efficiency standard and to tackle levels of disrepair, how much money would there be there? It is a figure that can be worked out and worked out relatively easily by officials and what I am suggesting is that we have not done that up until now. My $10 billion in terms of confidence is, I would say, plus or minus 50 per cent. I can report that we commissioned, which is now three years old. I just hope that it is no plus. It said $7 billion, but that was three years ago and things have changed. I think that Mr Kerr's estimate seems very accurate on the basis of that evidence. I sympathise with much of what has been said in terms of where we would like to spend money, but my question is fairly straightforward. There are not a lot of comments about the cuts from eco. On eco, there have been a lot of calls for the Scottish Government to mitigate the cuts from eco and from other UK Government budgets to the Scottish Parliament. The kind of money that we are talking about is substantial millions of pounds that would need to be mitigated, if we want to use that word. Where do you suggest that we take the money from to fill the hole that you want to fill? It has to come from somewhere. What I would suggest to you is about determining your priorities and where you, as politicians, want those priorities to be. Yesterday, we had the minister opening the average speed cameras on the A9, and I am not sure how much that particular project cost. He talked about the deaths on the A9 and the deaths on road traffic accidents. I will say to you that, in Scotland, there are two and a half thousand excess winter deaths every year, significantly more than there is in road traffic accidents, but we have invested or chosen to invest in road safety. That is not a bad thing. We built a new fourth crossing, and I remember being at a meeting where one of the people on the fourth crossing said that the cost of repair to the old fourth road bridge would have been possible at a much lower cost. There are two projects. Luckily enough, you do not have me to decide on your budget. Clearly, you have said that we should take money from somewhere else. The two that you have gone with is—I have not supported the average speed cameras. I think that I have done a wonderful job on the 77 in my area. I think that they have reduced speed and reduced accidents and therefore reduced fatalities and indeed injuries on that road. You are saying that we should not invest in road safety and that we should not invest in a bridge over the fourth crossing? I am not saying that we should not invest in them. What I am saying is that it is the level of investment that you are putting in. Therefore, yes, you do need to make decisions on whether or not that comes from other areas. I am not aware of all the budget areas. I can simply speak about the budget area in terms of energy efficiency. I have no idea what the budget area is in terms of education, social care, roads and infrastructure. It is a difficult decision to make. What I am saying to you is that I am making a plea for you to consider whether or not saving lives through energy efficiency is one that you want to invest in. I am suggesting to you that anybody who comes to the committee and says that we should spend more money has to understand that a committee who suggests where more money should be spent must also suggest where the money comes from. I am asking you for your opinion on that. I go back and say to you that I am not aware of all the budget lines. I am sure that, as a committee, you will have taken evidence from a range of people in terms of the budget lines that they have. It is your job to listen to those pleas, and if you are to make suggestions, then there are areas. If I go back to the fourth road bridge, I have no idea what the budget on that was, £400 million, perhaps? That £400 million or more? £1.27 billion for memory, I think. That goes some way to meet Dr Gardner's £6 billion. There was a budget headline. Unfortunately, that money is committed now and is being spent as we speak. So you cannot take it from that, and it is capital only? I cannot take it from there, but what I am suggesting is that you need to look at all the other budget headlines and, as politicians, make that decision. I am making a plea that the £79 million that you have allocated is not enough if you want to eradicate fuel poverty. Mr Gardner? To echo and reinforce Mr Kerr's message, but to also highlight the legal context in which both the fuel poverty targets and the climate change targets sits and the challenge on the part of the Scottish Government to give confidence to a committee such as this and to stakeholders that their budget that they have attributed to achieving those targets is adequate. I think that we do not have that, and in the absence of that, we are justified and also with the evidence that we do have of calling for additional funds. The onus is very much on the Scottish Government to make the case that either the funds that they have committed are sufficient and to set out the evidence as to how they feel that they are going to achieve their emissions reductions targets and their fuel poverty ones, or to come forward with additional funds from elsewhere within the Scottish budget in its entirety. Just as Mr Kerr said, we do not have sight of, we do not profess to be experts across the breadth of the Scottish budget, and we are not able to identify where it is that additional funds should come from other than to say that these are legally binding targets, that the Government has to give confidence to everybody that they are doing all they can to meet them. I think legally binding targets. Right. Have we done fuel poverty, and if so, perhaps we can move on, because Jenny Hogan has been sitting very patiently through all this. We talked about the spending on heaps, and asked Mr Kerr. In terms of the process, we talked about if the councils do not spend it now and it rolls over. The whole process from beginning to end, what are the obstacles? Why aren't we moving faster? I mean, I've just made this week with councils in Ayrshire about benefits being stretched out. I mean, is it just a resource problem? Is it a process problem? I do not understand why we cannot get resources and money to the front that are there, that are allocated to the front line a bit faster than we currently are. I think that there are a couple of points there, Mr Brody. The first one, I go back to the comments that I made to Margaret MacDougall. Not all local authorities have an energy efficiency officer that can bring forward plans to deliver on those. Some local authorities are quicker to put in applications than others. That then goes back to once you've got the allocation of the money, whether you have straightforward procurement processes in place that you can go out to tender, bring forward the contractor, allocate the money and spend that money. There are a range of reasons why the money is not getting out the door as quick as it can. I will say to you that the Scottish Government has said that they would hope to be in a position to give allocations to local authorities for the 2015-2016 year by the end of this calendar year, so they would know that in advance. In previous years they've known that May or June, so it's taken them time then to get processes running. The Scottish Government have tried to bring that forward so that local authorities are aware of their allocation much earlier. If I told you I know of a council that hasn't spent any of its heaps money, why would they get an allocation? Why wouldn't they be penalised for not doing it? I think that, first of all, they would have had to have made a good case to get the heaps money, they would have had to have demonstrated that they had gone through a process of identifying an area and identifying the works within that area. The reason as to why they've not delivered that, the council would need to be asked. Is there a penalty there? I don't believe there is, but I think that the Scottish Government may then, in the allocation of future funding, want to be more certain of the actual ability to spend rather than just making a bid for money. It's obviously clear in this area that the Scottish Government doesn't have full powers. We've talked about the diminishment of eco. It doesn't have any powers over that. In the SPICE submission that we've got, it mentions that information on the private sector eco investment in Scotland is held by off-gem and there's no specific information published on the cost of eco in Scotland by off-gem. I'm asking you, as organisations concerned, on fuel poverty, have you made a case, for example, of the Smith commission, about Scotland getting more powers over energy so that we can have the full gamut of powers to tackle that particular problem? The Scottish Fuel Poverty Forum on which I'm a member of is in the process of pulling together a submission to the Smith commission. That submission is not yet finalised, so I'm afraid that I can't give you a flavour of what it might or might not suggest. It's a very difficult area that you talk about because we're in a GB market, so it's difficult to understand what additional powers the Scottish Government would have that would not have a negative impact elsewhere on consumers. We find ourselves in a very similar situation whereby we're in conversations with the Scottish Environment Link and with coalitions such as Stop Climate Chaos with regards to our submission and it's not complete, so I wouldn't be able to say. Similar to what we're going to say, however, what I can say is that the Scottish Renewals did produce a paper a few weeks back now on the kinds of asks that we might be looking for, which again we're currently reviewing in terms of what we would put to the Smith commission, but areas like off-gem, accountability of off-gem to the Scottish Parliament is one of those areas that we've been focusing on and that we did come out and talk about a few weeks back, so along those lines I think is what we're working on. Okay, if we've done a few, we'll perhaps move on to talk about some of the other issues. Maybe I could ask you, Jenny Hogan, looking at the Scottish Government's support for renewable energy in terms of the budget 2015-2016, we see overall an increase, there's quite a substantial increase in the capital, some going into energy, some of which will be in support of the new KRS Local Energy Challenge Fund. There's also been a reduction in the fossil fuel levy renewable projects line. Overall, can you just give us a flavour of Scottish Renewals' view on the Scottish Government's approach and how those figures have been going? I think broadly speaking, I would say firstly that we've welcomed a lot of the investment that has come through from the Scottish Government in recent years and at least some of the text anyway in the draft budget is indicating that they appear to be going forward in similar areas, be it investing in innovations in offshore wind, waving tidal technologies, the KRS fund that you mentioned. We certainly want to see more of those continue. The National Renewables Infrastructure Fund, for example, in the Poetsyn Harbors, we've seen a lot of good investment there and we need to see more of that continue as well. Probably the one area that I would add as a plea for a more of a step change in investment is on renewable heating. Again, similar to what my colleagues have already been discussing, renewable heating, district heating, those are areas that we're still very, very far off our targets and where we need to see a lot more focus from the Scottish Government to make a difference in that area. Probably my last point I would make though is that all of this does sit in the context of UK-wide support schemes and the Scottish Government's support in working with the UK Government and at times putting pressure on the UK Government to get further foresight into targets beyond 2020 for renewable energy and budget lines. For example, the renewable heating incentive is the main driver behind renewable heat technologies. We need to see some foresight on a budget for that beyond 2015 and, of course, the levy control framework for contracts for difference. We need to see what's lying further ahead in the budget for that beyond 2021. While that's starting to stray out of the Scottish budget, obviously those are areas that we need to be working across the UK. Ultimately, the most important things for building the Scottish supply chain in renewable energy and the need exports, which I know has been one of the focuses for this committee, is about getting visibility and volume in renewable energy over the years and decades ahead. Fundamentally, we need to see the budget lines right across the UK set for those so that we can allow the supply chain to invest further down the line. In terms of what Scotland specifically can do, more of the same across the field, but particularly on renewable heat, we need more of a step change there. Talking about a step change, if we're looking at, for example, district heating, the Government has made additional sums available for the district heating loan fund. Do you think that they need to go further than what's currently being offered? There has been an increase in focus from the Scottish Government recently on district heating, so that is very much welcome. However, in terms of the scale of the challenge of going from about 3 per cent of our heat coming from renewables, we need to get up to 11 per cent by 2020. It's a huge job. At the moment, we just need a bit more confidence that that level of investment will continue to increase. I echo what Sam Scott said earlier about network infrastructure, and that really does need a large amount of commitment to help private companies to invest in that sector as well. I'm interested in terms of this renewable heat target. How much of that will be delivered from district schemes, as opposed to individual properties investing in renewable heat initiatives? It depends on what kind of fuel is being used in the district heating schemes. Obviously, district heating doesn't necessarily mean renewable. We, as an organisation, support district heating in general, because we see that, even if it doesn't use renewable fuel initially, it can progress to that further down the line. The infrastructure is very important. It's hard to put a figure on that. District heating, though fundamentally, will be very important, but it won't stretch right across Scotland. Obviously, there are areas that are more rural areas that are using particularly high-carbon fuels at the moment, which are unlikely to be tapping into those schemes. We really need a mix of different solutions for renewable heating to meet the target. I'll just say that analysis that WWF commissioned from Element Energy echoed conclusions from the Committee on Climate Change Deck and others that highlighted that, while district heating is a real backbone of a future low-carbon heat network, the dominant source of renewable heat will come from air source heat pumps or ground source heat pumps. They will form the bulk of our future electrified heat supply. It only goes to echo the point that Jenny made about the importance of having an RHI. At the moment, it came in late. It started this year, I think, or late last year, and at the moment, there's no commitment beyond next year. That's no means by which companies can establish themselves in any place, develop supply chains, build skills and begin to deploy and build confidence in a consumer base that an air source heat pump is a real viable means of keeping your house warm. Having that long-term certainty is very important. District heating, we have a target of 40,000 homes, I think, by 2020. We're currently at 10,000 homes. There's a significant step change required there. Whilst the increase in funding to the district heating loan fund is welcome, I think it's important that it's, one, complemented by some real substantive effort into what regulatory framework would work to both protect the consumer with the provision of district heating but also incentivising creative market that gives certainty to developers that there will have the means to sell that heat. So, I think there's a body of work to be done there. That will only go, that will be an important part in reducing the costs that developers experience in trying to get loans to finance these projects if they can reduce the risk. They'll reduce the costs. But I think the district heating loan fund could be complemented by a targeted development fund that bridges the gap between some of the feasibility studies that are needed, well, they're always needed, and then taking that to investment. That can be a substantial piece of funding. So, in a project in Glasgow, Wineford, at State, 1,800 homes, it was £100,000 feasibility, a study to get from the feasibility study to the investment. That's the legal negotiations, that's consultancy costs, those are substantial costs that are born by the developer or by the partners that are involved in it. At the moment, the Warm Homes fund is providing some support in this area, but as I understand it, it's a £10,000 development fund and it's targeted at renewable-only district heating. We would recognise that the infrastructure can and will support combined heat and power in the first instance with the potential for it to take renewable fuel in time, but combined heat and power projects can't be funded under that. So, there's a need to look to what extent that development is being limited and could be opened up with a fund that supports the feasibility studies for CHP plans. Lastly, I wanted to raise the potential value of a loan guarantee fund or some other means of reducing the costs that are part of the district heating challenge and the extent to which the Scottish Government could address those by establishing something along the lines of a loan guarantee fund to reduce those capital costs. Wherever you look across Northern Europe and you've seen district heating rolled out, that has been coupled with regulation, that has been the building blocks of putting in place infrastructure that is then able to be refinanced and the Scottish Government can get a return in time on it. Thank you. I'd like to ask Jenny and Sam a question about district heating networks, but just coming back to the point that I made earlier about spending priorities in the question that Stuart Maxwell made, I was in London last week when the HS3 was announced, which will cost about £4 billion and save 15 minutes on the journey. Given the constraints and the structure that we have, there is a difficulty that we have to face. In terms of district heating, when I did the exercise in Margaret Love this that proved that there was oil and gas in the Clyde, I had discussions with people who had been involved in the coal network and looked at the coal mines and where they are across Ayrshire and into South Lanarkshire. What work has been done in developing geothermal heating networks? I don't have a lot to say on that, not an awful lot at the moment, but I know that it is an area that some of the universities in Scotland have been looking at and doing quite a bit of research on. I know that the Scottish Government is looking at it, but I don't have an awful lot of information on the level of detail. As far as I'm aware, it's very early stage. I'm told that there's loads of warm water flowing through these old mines, and if you think of areas such as Patna, Delmellington, what have you, that could benefit from a district heating network by tapping into it, it could be quick. Absolutely, I agree with that. There are definitely some opportunities out there. We recently ran an event with Strathclyde University looking at heat from rivers and some of the new innovative technologies that could be used. It is an area that is being looked at, but we absolutely need to make sure that we continue investment in universities and innovation schemes to get those kinds of projects from the ground up and running and see some prototypes come through. I'm just to make myself aware that there's an excellent geothermal project in Shettleston, and again, why that's not been replicated, again, I think it's down to the money that's made available to do the feasibility study and then undertake some of the very high capital costs of drilling, so there are some very good examples out there, and again Glasgow, Kilmarnock and places like that are riddled with old coal mines, flooded with water that can be used. We do have the technology, we have the know-how, it's just been able to replicate them, and I think the point that Dr Gardiner made on district heating, again, we do have the technology, it's about replicating that, and if you think that Aberdeen heating power, which I can speak about as a trustee, has been going for 10 years, and we've just signed up our 2000th customer, but that's taken 10 years, so again, the challenge there is finding the way to support the growth of those projects and the delivery of those projects, so there's stuff out there, it's just how we give the financial signals, not necessarily the funding, but the financial signals and the long-term viability that investors will need to bring forward private funding. Just very quickly, just to make two points. One, I think the drawing on evidence or submissions that the Edinburgh University made to the Scottish Government in their draft heat generation policy statement, they've shown, with evidence, the value of spatial zoning, which geothermal lends itself to, because it's in a particular place, and how that is a prerequisite for the large-scale development of the district heating infrastructure. At the moment, what we have, whilst the district heating loan scheme is very welcome, it doesn't lend itself to strategic growth of an infrastructure that allows other networks to connect to it that puts in place oversized infrastructure that allows for growth because you can only fund it to the scale of what you're actually currently doing, so there is an important role for maybe the national planning framework, again for the Scottish Government's infrastructure investment plan, to identify where it is that district heating, and we have a heat map now of Scotland, we have an awful lot of detail where we identify where district heating is an appropriate piece of infrastructure, where it will reduce costs to people's bills, and targeting that allows people to operate with confidence that there's going to be a market in that place, and if you look, like I say, if you look across Norway where they've had an heat at, you look across Denmark where they've provided certainty that there's going to be connection, that's followed with investment, and in Copenhagen 98% of people are connected to a district heating network. That might not be right and proper for Edinburgh or Glasgow, but there's nothing to say that there's a technological barrier to this, what Scotland is envisaging exists elsewhere in northern Europe and ought to be able to be mimicked, and the final point I would just say, this is, I appreciate that the committee very much has its work plan mapped out, but district heating I think is an area of significant complexity, it's perhaps an area that's requiring of, well it's certainly a kind of regulation, it's requiring of innovative finance methods, it's large infrastructure that will have long-term impact, has to grow strategically across Scotland if it's not to lock in per first consequences, and it's perhaps an area that the committee might want to return to at some later stage, as this is a priority of the Scottish Government, they've got a district heating action plan, they will shortly have a heat generation policy statement that puts a lot of priority on district heating, and there are others out there, not least those colleagues at Edinburgh University who are, have a rich bed of knowledge that would, I'm sure, be of interest to the committee. If I, just last question, when I worked in interesting commerce, I remember going to my managing director with a situation saying, I think this is the situation, and his answer was, I've got enough thinkers, what I need are doers. Now given the state of commercial money and the cost of commercial money, which is not high, it's fine, we're doing all these reports and what have you, but it's already proven. How do we, or where do we get the leadership to go and attack an opportunity? It's not a problem, it's an opportunity, and follow through on the funding mechanisms, the organisation, I mean, where does that come from? I mean, you all do great jobs in the roles that you're in, but where is the leadership one in that particular area, for example, in terms of looking at funding? I have another situation with, and I was going to ask a question about Murray, but with a company that has developed new submersibles, which, in looking at their efficiency, is huge, but again, it's a question of saying, yeah, how do we lead, and we can get foreign money, but where does this work? I've got too many organisations in this field or what. Very briefly, I will just highlight that in the Scottish Government's draft heat generation policy statement, they commissioned Arup to do some modelling of what would be required in order to grow Scotland's renewable heat base. Unfortunately, the actual study didn't come out during the consultation period, it came out afterwards, but what they looked at was two axes of high government intervention and uptake, and the only scenario in which both the long term costs are, you get to basically return on that infrastructure, you achieve your emissions reductions targets, is a scenario where there is high government intervention coupled, and as a consequence, you get that high uptake. So, I think in the first instance, and again, this is what's reflected around Norway, Denmark, Sweden, Austria, is leadership has come, in the first instance, from the national government to signal a priority in a particular area to put in place a regulatory framework that has reduced the costs and created a market in which developers can be confident that they will get a return on a large piece of buried asset, basically. I would agree absolutely, and you briefly mentioned the marine there, and you can look at the marine industry as an example that is obviously still growing and developing, but the Scottish Government has shown a lot of leadership in that area. A report recently showed that, I think, with every £1 of government public funding, the marine industry has leveraged £6 of private investments, so absolutely it's that kind of leadership from government, ultimately, that needs to be co-ordinated right across the whole heat sphere, which I think you rightly alluded to. There's very complex, there's a lot of different organisations, a lot of different sectors interested in this area. These three are just some examples, but it needs, I think, government leadership to really pull all that together. Lastly, and hopefully, fairly briefly, Mike McKinsey. I don't think there's much chance of that. I was interested, in fact, I'm going to make an offer to Dr Gardner. I'd be very happy to give you an almost new air-source heat pump, free of charge. It's yours for collection. The story with that heat pump in common with a lot is that it worked for approximately one day and then couldn't be made to work again. Similarly, I've got a large file in my inbox of constituents who have been early adopters of ground source heat pumps, wood pellet stoves, and as you'll know, they're all guaranteed by the, because you mentioned confidence being important and that UK government scheme, the MCS scheme, which consumers take as some form of guarantee is no such thing. It's not worth the paper it's written on. When you analyse the problems, they fall into two categories. They fall into the category of the appliance that's not been fit for purpose, they're guaranteed supposedly by the MCS scheme, and they fall into the other category of the installers not been up to the job. And once again, the guarantee that the UK government provides is the MCS approval of the installers. And again, that doesn't seem to be worth much either. Would you agree with me that it's critically important that this UK government MCS scheme is made fit for purpose if we're going to persuade consumers to take up these various technologies that can both help reduce fuel poverty and meet our carbon targets? And then in the face of that scheme not being fit for purpose, it's extremely difficult for the Scottish Government to achieve the renewable heat target. I would say is that yes, there have absolutely been difficulties with the MCS. It's been an issue that we've been concerned with. And yes, we would obviously be keen to make sure that that scheme works because it has to work to ensure that the installations are or the public have confidence in those installations. But it is still only part of the picture as well, in that it is just the domestic or business scale technologies. And when you're looking at including things like district heating, maybe that is an area that the Scottish Government can do more in terms of providing that leadership. So, it's a complex picture, but I would agree with the point about the MCS. Just to echo that, but also to say that if the MCS is failing in that regard, then it's failing the UK, which equally has renewable heat targets. Indeed. The Scottish Government, I know, working energy saving trust has done a piece of analysis that looked at what the effectiveness was of air source heat pumps in different property types, building an evidence base and advocating for improvements to an accreditation scheme or MCS scheme. That will give greater confidence to the roll-out of those technology types is clearly very important. In relating to that point, air source heat pumps is a technology that, as Sam has mentioned, has a big future ahead of it. The national grid scenarios show that heat pumps in general are likely to provide a big part of the sector's growth. There is one area that the Scottish Government could be doing more in that area, on the planning side of things, where the rest of the UK is leading on providing air source heat pumps, permitting development that the Scottish Government unfortunately doesn't. Again, that's an area that we could be working a bit harder on. Absolutely. I agree with you on planning. Again, just on this theme of certainty, the one confidence, I'm sure that Dr Gardner will agree with me. He referred to the domestic RHI, the commercial one that's been in operation for a number of years, but the domestic one was delayed and delayed and delayed. I first heard of it 10 years or so ago, and both installers and consumers who were hoping to install these technologies and do their bit for the environment and so on, were perhaps sent the wrong kind of market signal, especially when you consider what the UK Government did to solar PV when they reduced the feed entire from 43 pence overnight to 24 pence, and then the ink had hardly dried in the paper, and it reduced to 16 pence. When you look at small-scale hydro and regression, digression rather, and how that affects the viability of these schemes, if or when they may get grid access, surely in terms of us taking forward this agenda, we need the UK Government to provide confidence and certainty. Given that the Scottish Government's position is to try and provide complementary funding, don't you have some sympathy for the job of the Scottish Government? How difficult it is to bring forward these good things that will agree ought to be brought forward in the face of such uncertainty coming from the UK Government? Surely that's the biggest factor. I can pick on that first. Basically that just goes back to one of my initial three points. Of course, we are in a GB market and we need leadership at the UK level, so there is a role for the Scottish Government in working with the UK and where necessary putting pressure on the UK Government to ensure that we have four sites of targets, a decarbonisation target, ideally a renewables target for 2030, and a four site of the levy control framework. Further work on the hydro-degression, which you rightly add, is something that is being reviewed next year, so we will be working very hard to make sure that that becomes fit for purpose at the moment and it is not. Of course, the RHI is another example of where we need site beyond 2015 that we have mentioned already. It is definitely something that the UK Government needs to work on, and there is a role there for the Scottish Government to work with them and put pressure on them where necessary. As we have a good session, thank you all for coming along and assisting us with our budget scrutiny, and we are grateful to you for your contribution. We now have a short suspension before we move on to next business, which I think is in private session.