 Welcome to the Environment, Climate Change and Land Reform Committee's second meeting of 2019. Before we move to the first item on the agenda, can I remind everyone to switch off their mobile phones as they may affect the broadcasting system? The first item on the agenda is for the committee to consider whether to take item 4 in private. Are we agreed to do that? Thank you. The second item on the agenda is for the committee to take evidence as part of our scrutiny of the 2019-2020 budget. I am delighted to welcome Rosanna Cunningham, Cabinet Secretary for Environment, Climate Change and Land Reform to the committee this morning, and she is accompanied by her officials. Keith Connell, Deputy Director of Natural Resources, Graham Black, Director of Marine Scotland, Claire Hamilton, Deputy Director of Decarbonisation and Richard Murray, Acting Deputy Director for Rural and Environment, Science and Analytical Services for the Scottish Government. Good morning to you all. I would like to start off by asking our first question. It is about the outcomes-based budgeting and preventative spend aspect of things. Cabinet Secretary, how has the proposed spend within the portfolio changed since last year to reflect the evidence of the wider benefits of environmental spend? We look carefully at wider benefits. Obviously, environmental protection improvement is the core part of what the budget does, but we are conscious of the fact that the environment creates a space in which a lot of other benefits are likely to be engendered. In some cases, economic benefits and other cases can be health benefits. A lot of the health-promoting side of the environment has been getting a greater focus over last year. Investment in green and blue infrastructure is part of that, encouraging a healthier and more active Scotland. I think that we are all conscious of the fact that good-quality local green space does make a huge difference, not least to the NHS in Scotland. As I understand it, there has been an estimate that we effectively save the NHS £94 million a year by ensuring that good environmental space is available to people. There is a concept that SNH uses, which is our natural health service. There are green health partnerships and a green infrastructure fund. There is money being fed through the Central Scotland Green Network that targets disadvantaged communities, where there are stark health inequalities. If you think about the route of the Central Scotland Green Network, you will understand how important that work is to good health and equality outcomes. Obviously, there is a national walking and cycling network, which is also increasing the health of users by increasing physical activity. There is quite a lot that is delivered through this portfolio and spending decisions that are made in this portfolio that then deliver benefits for other portfolios. I remind my colleagues of that as often as I can. Is the Government looking at doing any kind of research so that we can evidence these benefits in quite concrete ways underpins up spending decisions around your portfolio with regard to the effect that it does have on other portfolios? I have talked about the work that SNH is doing in this area. The natural health programme is working hard in all that. That is a strategic intervention and NHS green space for health partnerships, of which there are now a number across Scotland. Those are interventions that we believe and intend to show some of the benefits that I have been talking about. There are a lot of people involved in those, not just within this portfolio. The interventions will be evaluated. The intention is, through that evaluation, to potentially deliver an identified practice that can then be embedded in future policy and practice. Once the evaluations have been completed, we will consider future research in this area. At the moment, it is still being worked through. The work will be evaluated. I would anticipate that it is not just from my perspective that the work will be evaluated. I would hope and understand that the NHS itself will be part and parcel of this. There are a lot of other partners involved. Obviously, sport and education are key to this so that there will be benefits derived in those areas as well as in the health area. We are not in the middle of an evaluation. We have these programmes working and they will be evaluated. At the point when that is done, we will then be looking at potential further research. I cannot give you concrete answers about that at the moment, but to reassure people that it is an actively pursued part of what we are doing. Particularly from my perspective, the more that I can put numbers and evidence on benefits that go well beyond this portfolio, the stronger the arguments that can be made for this portfolio and the portfolio to be spent. I just wanted to explore the health benefits a little bit on the two sides of the balance sheet and just see the extent to which the Government is looking at these. Clearly, if people are healthier, take more exercise, they are less likely to be obese. That is meaning that you are less likely to have hip replacements, knee replacements, etc., because you do not weigh so much. That is a permanent benefit from that. On the other hand, if you live longer, you have more flujags, you have more annual check-ups. I do speak for myself, if I may, and I hope to have many more of them. However, the reality is that living longer creates, perhaps in many cases, things on the other side of the balance sheet. You live longer and you are a customer of the health service longer, but clearly you postpone the point at which many of the costs happen. It is a complex thing with primary, secondary and tertiary level effects. I am just hoping that Richard Murray and his colleagues, because I am pointing perhaps at him rather new, cabinet secretary, are going to look at the multi-levels and balancing effects that there are in all this. At the end of the day, we can be quite clear that the environment contributes to a better quality of life. That is for sure. I am not quite sure what the question was there, but if I can make some comments. First of all, as I understand it—none of us here are health professionals, so I need to make that caveat on behalf of us all—I hesitate to use the word burden, but that is in a sense where your comment almost leads us—is in the last year of life whenever that last year is. Whatever age that last year is, if that last year is 20, 40, 60, 80, it is always that final year of life where the highest cost of the NHS comes. Whatever you do to make people's lives healthier at whatever age, in my view, is going to substantially reduce the burden in terms of health provision, regardless of age. I cannot believe that any attempt to do a cost-benefit analysis on this is going to come up with any other conclusion than that. I also remind people that it is not just physical health that we should be talking about here, it is also mental health. I have visited some of the programmes that are being done that are effectively more about people's mental health, and that can be impacted almost every stage through mental health in terms of prevention, but also in terms of getting people who have problematic mental health back into better mental health. While it might not be an actual cure, it nevertheless impacts at every stage, as it does with physical health, of course, as well. I am strongly of the view that, regardless of what age we live to as individuals, we will all be doing both ourselves and the health service, and every other one of our services is a big favour by being in better shape, and the environment can help us to do that. Of course, I echo the cabinet secretary's sentiments in that regard. However, in the response that we got from you with regard to our questions to you over the budget, we just quote it with regard to this in terms of improving air quality. A sentence in that said that, however, an improvement in air quality should increase the life expectancy of people with serious chronic cardiovascular and respiratory conditions, which paradoxically could potentially increase the total lifetime costs of providing such people with NHS care over the long term. That seems to me almost as if it is a matter of regret, but I am not certain how you reconcile your views with that response. However, a chronic disease at any age—I think that Stevenson's questions tend to be predicated on advancing age—a chronic disease at any age is going to have a big impact on the health service in particular. You would really need to speak to health service people to understand perhaps more definitely how that works. Improving air quality, depending, I suppose, at what stage during that chronic disease that it ameliorated the situation might, but it will also at the other end of the scale stop people developing some of these chronic diseases. That is a very complex piece of work, and I suppose it is part and parcel of why we have to do evaluations of the work that is being done at the moment. It is one of many reasons why I brought forward the review of the Air Quality for Scotland strategy, which has now begun its work. All of these things have to be looked at, evaluated and considered, but at the end of the day, the alternative to arguing that helping people's health to become better in whatever way we can is an absolute good, is to start applying a somewhat less benign view that we know that, if it is reduced to a tick box exercise, it will become very problematic indeed. Can I ask how the Government deals with the cost of inaction? We have heard some evidence from Scottish Wildlife Trust that, if we invest £1 million, for example, in tackling rhododendronins and non-native invasive species today, we save £10 million cost five years down the line. Does the Government look at the cost of inaction, what the cost might be, given what you have in the budget this year and what you are planning for? You can try to do that. It is not always just as straightforward as being able to put figures on it. I have not seen the SWT research that you are talking about, but it is probably not without a debate in terms of whether or not what they are calculating is correct. I do not doubt that, in general terms, there is a truth there, even if the figures are not necessarily easily pinned down. However, you have to find £1 million in the first place. In a sense, that is what the budget is all about—trying to find that £1 million in the first place to save the £10 million down the line. If I have to find £1 million to save rhododendronins this year, I need to know within the budget where I can take that from. That is always the difficulty. Preventive spend is what we are always trying to achieve, but it has to be looked at in the context of what the resources are that are actually available right now. That is what we are trying to balance all the time. There is probably no one who could sit on this side of a table and not say that they may very well be. To a certain extent, all of what we do with climate change is about that. It is about trying to estimate future cost of not doing what we are trying to spend money to do on now. Equally, you know perfectly well that if I switch all money away onto what is called preventive spend and take it off current spend, there is a huge area of my budget that is not that flexible. People's wages and the commitments that we have to do right now that have to be done right now mean that every decision that I take has to be thought through very carefully. I have to be able to work it through in a balance. I do not doubt that spending a lot of money now on rhododendron clearance will save a lot more money in the future, whether the figures that have been suggested are correct is a different matter entirely. However, I still have to find that money now. That is in a sense what the budget conversation and the budget balancing is all about. That is just an example of effectively what happens across all departments, all policy sections and all portfolios. Thank you, convener. I can now begin by declaring an interest as a farmer and land owner relevant to these discussions. I want to ask the cabinet secretary of mayor about aligning the budget and the climate change plan. How will the new annual monitoring reports and the climate change plan be used by the Scottish Government to inform future budgets? How will that help to align the budget with the climate change plan? The committee is probably aware that we are considering how to better meet the committee's need for improved budget and progress information. The climate change bill is going to, assuming that section gets through, will place the monitoring framework on a statutory footing in future years, with separate sector-by-sector monitoring reports laid in Parliament each October. That is a level of information that is not easily available and will be available. I am aware that the committee has shown an interest in that. I certainly think that it would be worth discussing the content and timing of the sector monitoring reports during the process of the climate change bill. The committee is already looking at some of that in terms of its stage 1. What we are also going to do is to set up a new governance body to oversee the monitoring and implementation of the climate change plan. That will review monitoring information and assess progress against policy outcomes, and it will provide advice as well. That will include advice on whether or not we need adjustments to any policy and how the adjustments might be made. As that begins to play in through the whole process, that will begin to give us a better understanding when we are thinking about budget decisions as to what is needed and where. In a better way than we have at the moment. The committee has particular ideas on that. We did that with you in our letter to you. You said in your response that you would welcome further discussion with the committee, so we are giving you that chance to discuss it with the committee here and now. I will do it at another time. It is not a one-off question and answer. It is perhaps a longer process. We are at the founding stage of that new way of doing it, so it will take a little while for everybody to get their heads around whether or not it is working as well as it should. To me itinerated that the timing of those reports would have to be sufficient and reasonable time to be able to influence the budget and the year that they are presented. That is maybe a conversation that everybody needs to just have and think about whether or not the current proposed timing is the right timing. How best to adjust that if it is felt that it is not. We have chosen October because we think that the draft budget is not usually published until a little bit later. Do you want to say something, Claire? The date of October was chosen on the advice of stakeholders. It was a proposal from WWF that this should happen in October to coincide with one of the usual statements, but we are open to discussing that timing with the committee to make sure that it meets your needs as well as ours in terms of the information provision. I could not speak for the committee, but it seemed to me perhaps earlier might be more beneficial. However, as you say, a discussion perhaps for another day. My second question to you, cabinet secretary is that, given that infrastructure investments can lock in a pattern of carbon emissions for many years to come, what have you done to ensure that the Government's pipeline of infrastructure investments is aligned with Scotland's climate change targets? We are committed to increasing the proportion of the capital budget that is spent on low-carbon projects at each budget until the end of this Parliament. I understand that there is a new infrastructure commission that is already established to provide long-term strategic advice. There might be a conversation to be had with my colleague Derek Mackay about some aspects of that. That infrastructure commission is going to give the whole of Government advice on national infrastructure priorities. That will not just be looking at inclusive economic growth but also low-carbon objectives. That is a whole Government response to that. Obviously, from my perspective, my portfolio does not have a huge infrastructure spend that is the kind of infrastructure that is being talked about here. However, the Government, as a whole, is approaching that across all portfolios, and the infrastructure commission will be key to that. Therefore, that cost of that infrastructure commission will not necessarily be a cost that will be allocated to your portfolio, we would hope. I am not conscious of anything in terms of funding the infrastructure commission having come up out of my portfolio. I cannot see where it would have come from. It is not being set up on that basis. It is being set up on the appropriate portfolio, but it is a whole Government infrastructure commission. Obviously, there are a number of portfolios that are involved in infrastructure planning. It cannot simply be a commission that reports only to one portfolio. It does not report only to one portfolio, but it is not funded across all the portfolios. I think that there is an infrastructure investment plan due as well. I do not know quite when. Again, it is not my portfolio, so I do not have dates for that. That, again, will reflect the commitment to low-carbon projects, as well as inclusive growth. I am conscious that I have got a debate this afternoon on a slightly different but related topic, if you like. I would like to turn our thoughts to the circular economy. In our pre-budget scrutiny, our committee encouraged the Government to consider what more could be done to bring forward work for the circular economy, which is obviously very important for a very wide range of reasons. In view of that, is Zero Waste Scotland, in your view, sufficiently resource to deliver the Scottish Government's circular economy ambitions, given all it has to do and particularly the commitment to deliver a deposit return scheme when there is no increase, as we understand it, in the budget for Zero Waste Scotland? We do task Zero Waste Scotland to do what any public body has to do, which is to look at the efficient use of resources and to think about prioritisation. That includes activity to design and implement a deposit return scheme for Scotland, which is a very key part of my portfolio and a priority. However, the spend for that will be spread over a period of time, when all will be happening at the one time. Some of the work is already taking place by Zero Waste Scotland and they will go on doing that. Yes, I do believe that Zero Waste Scotland is able to continue to deliver on its objectives. It is a budget that supports a number of different actions and has a number of different purposes, but I do believe that, with the work that Zero Waste Scotland is doing to continue to prioritise expenditure across all the programmes of work that it will be able to deliver effectively. If we drill down briefly into the deposit return scheme a bit more, there will be significant costs—I understand that they are progressive—but significant costs in terms of behaviour change, promoting information and dealing with any exceptions for rural or small retailers or whatever. I really hope that, as a whole new area, we will be able to implement it. The architecture in Zero Waste Scotland is obviously central to this. I hope to be able to make some further announcements soon, but I am not there quite yet in terms of the policy. We are still mulling over the response to the consultation, so we are still at that relatively early stage. Zero Waste Scotland is able to continue the work that is expected of them in the foreseeable future. I am looking at the budget further in relation to Zero Waste. In your view, does the budget allow for the necessary preparations for the forthcoming ban on biodegradable waste going to landfill from 2021? Is the Government on course to reach its target? I saw concerning figures earlier yesterday that there was a decrease of only 2.2 per cent of total levels of waste sent to landfill in 2016-17. I am just seeking reassurance for the committee on this. I think that the issue here is the drop in forecast revenues wherever it is set at is not a new… I mean we knew this was going to happen. The decisions about landfill were taken before the landfill tax was devolved, but we are aware and we have always been aware that we would get to this point. The more successful we were, obviously, that aspect of the landfill tax in terms of the numbers of businesses that were being taxed, et cetera, would reduce. However, and for this, I had to go to a different part of the budget, which is not my part of the budget. I am also aware that there is an intention to increase the tax per ton, so that we would get some increase in the taxation. That is not principally about money. That is also about not creating what you might call landfill tourists, who might find that if we had a lower rate of landfill tax dumping here from across the border might be cheaper than where it says. The increase in tax is intended to help to disincentivise anybody who thinks that there might be a cheaper option in Scotland. I am aware of that decision having been made. What I have not got detail of is that, as a work through concept, I can make sure that you get just a follow-up… I mean it is in the wider budget, but it is not obviously part of my budget, so I can try and make sure that you get more detail about those proposals. Finally, in relation to possible new environmental taxes or levees to fill funding gaps, are there any particular thoughts that you would be able to share with us just in outline about other possible taxes? Also, just in relation to that, I understand that there is an expert panel on environmental charging and other measures. It will be interesting for the committee to know when that is first going to make any recommendations. It is already meeting. I had a conversation with James W. Bruce just before Christmas. The way that they are going to work is that I have asked them not to save up all the recommendations to put in one big report at the end of a two-year period. I have asked them to report on a rolling basis, and I understand that they are currently looking at coffee cups. I would anticipate the initial recommendations by April-May this year. The issue of taxes and levees of course has some other questions that are attached to it. Those are not necessarily tax-raising powers that we have, which is why the carrier bag levy was a levy and not a tax. However, I am conscious that, at the moment, the Westminster Environment Minister is also thinking in some of the same areas. There may be some conversations that I can have about, perhaps I am not quite sure what the technical way of doing it would be, but it is giving us some power to make some of those tax decisions ourselves when it comes to the policy area. However, I need to wait for the first set of recommendations coming from the expert panel. That will be, as I indicated, April-May, and it is likely to be around coffee cups. Are there other particular areas that, as a Scottish Government or as a Cabinet Secretary, you think would be valuable to be considered at this stage, apart from coffee cups? What do you mean in terms of being considered by the expert panel? Their work is to look at single-use plastic wherever they find it. It is a question of trying to draw up what is a reasonable work programme for themselves. If you like, assign a kind of notional priority, however you decide that priority is going to be defined, they have chosen to go first with coffee cups, but they may very well be other. I am conscious that there is a big discussion about packaging and the use of plastics in packaging, which is virtually always single-use. I would anticipate that, at some point, that is one of the things that they will also want to look at. I do not want to tie their hands and be prescriptive about it, but that will be what they are considering. They will be in the process of drawing up. I have given them an initial two years, so they need to be thinking about these things all for that period of time. The issue would try to be to deal with some of the most problematic ones as early as possible, because that will then help us tease out some of the issues around the tax slash levy debate that will bedevil quite a lot of this. Gently to everyone, we have got 25 minutes left scheduled with the cabinet secretary and we have still got four sets of subjects that we need to get to from members, so if we can make our questions and maybe our answers will get through a little bit more. Moving on to questions from Finlay Carson. Thank you. Good morning. The Scottish Government funding for SEPA has been declaring over the last few years, and it is set to decrease by a further 1.5 per cent. Can you provide more details on how organisational efficiencies and reprioritisation of spending plans by SEPA has enabled a 28.5 per cent reduction in its resource consumption budget? Some of this has been about balancing because SEPA has been very successful in looking at its charging regime and charging where it is appropriate, where perhaps that has not been the case in the past. I am just using a figure that I think I have seen and I am just looking for one of my officials to endorse that we are now roughly in a position where 50 per cent of what SEPA I am right, about 50 per cent of SEPA's income now is coming from charging, so when you are looking at a reduction, a lot of that has been balanced by an increase in charging, and I would assume that most people consider that to be an appropriate way to proceed. Obviously, we will engage with SEPA on business planning, but they also have had a fairly consistent engagement with us on better environmental regulation as well. SEPA worked very proactively in that area and I think that the first public body to engage very much in that was about 10 years ago. I am very confident that they will be able to continue to manage their priorities and to deliver efficiencies. As I said, they have had a very great deal of success in increasing charging income to the extent that now half of the income is from charging. The committee also raised in its pre-budget scrutiny that the performance of Marine Scotland indicated that it was doubt-graded from proving last year to maintaining this year. Can you tell us what the actual change to Marine Scotland's budget is excluding the reallocation of administration costs? The 2018-19 budget already had administration costs in it—an element of administration costs. The transfer of the full administration budget has resulted in the underlying Marine Scotland budget increasing by 1.8 million. We are touching on what has been quite a change in the way budgets are presented, which is the shift in the way that total operating costs are being reflected. It is quite a technical area. I appreciate that this year it creates a bit of a discontinuity for people when they are looking at what has happened previously. However, the intention is that, from this year forward, those figures will all be far more transparent than they have been. In a sense, my initial answer had to say that there were administration costs reflected in last year's budget, but that would not necessarily have been particularly obvious from last year's budget. Graham, do you want to say something? Yes. I think that the position is a bit complicated in terms of last year. Overall, the Marine Scotland budget, in terms of what we are able to spend in operational matters, has gone up by about 1.8 million pounds this year. That is representing a recognition that there is quite a lot of Brexit-related activity that is obviously involved in the marine area. Some of our assets, as they get older, require more in terms of maintenance. Overall, that is a significant increase in the year. With that in mind, and the growing nature of the NPA network and your commitment to consult on four new NPAs, your national deep water, marine reserve, seabird conservation strategy and so on, do you anticipate that the budget will have to grow in the future to deliver those policies and plans? I would like my budget to grow across the board exponentially from here on in, but I am conscious that that is unlikely to be happening. What I am hoping is that Marine Scotland is going to be able to conduct the same exercise that SEPA has done in respect of charging and that we would then see some of the same results that we have seen from SEPA. SEPA was the front-runner, as I indicated, but that does not mean that there are no potential ways in which other bodies such as Marine Scotland might not be able to also do. I am very much looking for Marine Scotland to identify those opportunities, including the efficiency savings that we expect everybody to make. Those additional funds will make a difference in the future. Mark Ruskell. Can I ask you some specific questions about land management? The Biodiversity Challenge Fund, is that included in this budget? When will it be open for application? Yes, it is included. The funding for it is definitely included in this. It will be made available to projects on the ground, so it will be operated on that basis. We are currently drawing up details of it with SNH, between SNH and my officials, and obviously SNH. That is a key part of what we do. The commitment is for up to £2 million spread over two years. That is definitely in the budget. I believe that it is in the bit of the budget that is called the sustainable budget. It does not have a separate line, but it is contained within one section of the budget. I am trying to think where it is buried. It is in the SNH funding. In terms of SNH's budget, we have heard a lot of evidence about the benefits of a national ecological network. I am just wondering where Government priority is on that. If it is your intention to see SNH develop that network, does SNH have the resources to do it within this budget? I am conscious that there is quite a debate about that. I know that SNH is meeting my officials in just a week or two's time to discuss this issue. However, I think that the member will be aware that there is a conversation to be had around what that national ecological network will comprise. Will it be a network of what is existing? Will it be a reconsideration of what exists in terms of how it is taken forward? There are a lot of people involved in that, and it is not all just Government. The Kerngon Connect project is part of that, and that involves land managers who are not necessarily public sector land managers. It is a significant conversation that is taking place. I believe that SNH has the resources to develop their thinking on that. Obviously, it is part of the wider work on biodiversity, but there has not been a unified view among stakeholders on what precisely it means. I guess that we would have to come to a decision on that before we can make decisions about specific budget allocation to it. Clearly, how you define it will be significant in terms of what money might be required and where it might have to be spent. Will that impact on land managers' ability to improve biodiversity? Has there been any assessment of what those drops in funding will mean? Obviously, there are a number of issues involved in that. Since the draft budget was published, members may be aware that more than £39 million has been awarded to rural businesses under the IEX scheme, the Agri-Environment Climate scheme. There is a further round opening this week, so that has to be regarded as successful, as well as clearly funded. We intend to continue to deliver the SRDP programme, and the Agri-Environment schemes that I am talking about include a great deal of work that is directed towards biodiversity, which is a key thing that we need. For most schemes, the budget reflects forecast spend, and some of those budgets have been bedeviled slightly by estimates that turn out not to be accurate in terms of what is forecast. Some schemes do not get as many applications as you might want, so that we have to try to forecast a spend, and that is what the budget reflects. If I missed anything out there, I think that the budget, as it is presented, does adequately deal with those issues. Hanging over some of them is Brexit and a longer-term future, but I am like everybody else. I have absolutely no idea what is actually coming down that line. I will make a combined question. The budget for woodland grants increase to meet the 2025 target. What will that be? Also, with peatland action, that is in level 4 figures, but what amount has been allocated? Will it be enough to meet the targets that are in the climate plan? The woodland grants, we consider that the draft budget at the moment contains sufficient provision for the 10,000 heart target. For the increase to 15,000 target, that will need to be considered in future budgets, so I cannot really speak to what that will look like. Obviously, that is part and parcel of that wider Brexit issue that I spoke about. For peatland, we have currently identified £3 million within the budget to support restoration. I would expect peatland action to continue to do the kind of work that it does, which is to maximise the abilities across funding routes and partners. However, as we have always done with peatland, we will continue to look for a potential in-year to transfer money over. I think that that has been a standard function year on year in budgets. There is a delivery pipeline of projects currently taking place. All of that work has funding available for it and is on-going. At the moment, we are content that we can continue to do what we need to do with peatland restoration. Some members, particularly the longer-standing members, will be aware that the majority of the budget for peatland restoration did not come from my portfolio in the first place. It tended to be SRDP money held in a different portfolio. The £3 million that I am talking about here is from within my portfolio. I take you to research analysis and other services now, cabinet secretary. The budget for programmes of research resource has dropped by over a million pounds, delivered by efficiency savings and resource capital transfer. What are those efficiency savings and how do they limit the capacity to deliver strategic research on environment, food and land? Obviously, individual research institutes need to make a decision about efficiency savings within their own organisations. We ask all research-funded grantees to factor in savings of 3 per cent per annum, which should be used to offset any increase in costs. It is a challenging climate in which we live and the research bodies. Again, I am pretty sure that if you were to speak to each one of them individually, we would all want a great deal more money, but we have to try and manage things as best we can. That is the basis in which we do it. Nearly all of those decisions will be for them to make in terms of the efficiency savings. I do not dictate to them what those efficiency savings should be. With the operational costs now being added into their overall budgets, they have really had quite significant declines in their research budgets. There are changes in some of the ways that we do research as well, which perhaps have a significant impact on their work. We use a number of research centres that we use, as opposed to those particular research bodies. Some of the work that might have gone from us to them is not going to research centres. The whole research part of the budget is a much bigger thing than simply the funding of the various research bodies. If the Government is moving away from a commitment to strategic research to a more sort of contract-based and shorter-term approach, how will the Government ensure that safari and others delivering the Government's research programme can adequately plan? Are you anticipating continuing a five-year funding programme? We have not taken decisions with regard to safari post 2021, but for obvious reasons. The next cycle of funding for safari will involve working with independent strategic advisory board, and safari is fully involved in that. I am very committed to safari. I believe very strongly that it is the right way forward for Scotland. I keep a weather eye on what is and is not happening there. I think that safari points the way to a much longer-term solution to some of the issues that arise with the various research institutes. A collaborative approach wherever possible has to be recommended. In this budget, the contract research fund has declined by over 40 per cent, notwithstanding the words, but why is this budget likely to be used less in 2019-20 than hitherto? I referred to it in an earlier answer. The contract research fund is underspent in recent years. The shorter-term needs of my policy teams are actually being met by what are described as centres of expertise. There is a couple that this committee might be more aware of than others. The climate exchange, for example, is one such centre of expertise. We more frequently go to the likes of the climate exchange when we are looking for shorter-term research. There is a different way of doing what we need to do. I am trying to think of some of the others. The plant health group, the animal health epic. We are tending to go more towards the centres of expertise when we are looking for shorter-term policy rather than to conduct it through that contracted kind of research model that was being used. As I indicated, the funding was being underspent on contract research. It seems appropriate that we realign that. On that subject, where are you with the plant health expertise centre? Not my responsibility. I think that that is a real economy responsibility. There are a number of centres of expertise. The main one that I am conscious of having used is the climate exchange. I think that there are four in total. If there is any further information on the plant health centre of expertise that you would like to give us, you can let us know. Thank you very much. Thank you, convener. I will be brief. If I could turn to EU exit and the ability of sorry, the ability of organisations to leave our funds. You will be aware that the committee asked for detail of any work, current or planned, on assessing and meeting the anticipated funding gap when the EU withdraws from the EU, if it withdraws. Now you have stated that it is not possible to assess the nature and scale of any future funding gap for the eclair portfolio beyond 2020. What risk assessments are you carrying out on the impact of full or partial withdrawal of existing funding post 2020? That is part and parcel of the work that is currently taking place. The committee is integral to a lot of that. We are having to prepare for no deal regardless of what anybody thinks might happen. Preparing for all eventualities means that we are having these conversations all the time. We are working with SNH, SEPA and Marine Scotland to quantify and assess the level of current EU funding for the portfolio. It is an area of funding that has always simply been taken for granted and has been integrated into everything that we do, making sure that we understand the extent to which it has applied. Obviously, from my perspective, I continue to be asking the UK Government for more detail on what the replacement for that EU funding will be, but I am afraid that until we know what that replacement will be, it is very difficult for us to be able to make any plans about post 2020. I await with interest, along with everybody else, the outcome of today, but I am not sure that it will help us when it comes to this particular question. It is a question that really needs to be answered, not just for this portfolio but for a number of other portfolios as well. Indeed. More generally, what 2019-20 budget is in place to ensure that activities carried out by EU institutions or bodies can be adequately replicated in Scotland in the event of an audio Brexit? Derek Mackay has already made clear that the current budget is designed to work on the basis of an orderly exit from the EU at the end of March. I think he has already, unless I am very much mistaken, he has already stated in the chamber that should that not be the case, he may have to revisit the budget. If that happens, I am afraid I do not know what the actual outcomes will be. It may require all portfolios to revisit their particular portfolio budgets. I would anticipate that it would certainly require rural economy and environment, climate change and land reform portfolios to do so, but we do not yet know what we do not know. The draft budget at present is predicated on an orderly exit. It is very difficult to know what else to say about that. I want to thank all the members for their questions. I want to say one final thing. We appreciate that the budget has been presented in a different way for the first year, coming back to our first round of questioning. Will the cabinet secretary say what additional funds for her portfolio have been given, excluding the admin costs that have now been added? What additional funds have been allocated to your portfolio? No, I do not think that it is possible for me to say in this year. I anticipate that this being the foundation year for the new way of doing it means that that will be a very much simpler response to give in the following year because it will not be complicated by talking about admin costs that are elsewhere. I was a little worried that I was going to be asked about this whole total operating cost. The whole point of doing it in this different way is to make it all very much clearer the difficulty is that this is the year that it is done and therefore it is the basis for which the subsequent years will be assessed. I have some figures not so much from the overall budget for 2019-20, which is £426.6 million, and that is compared to £405.5 million for 2018-19. However, I do not think that I would want to encourage committee members to presume that that means that there has been a 5.2 increase because I am not entirely sure that that can be administration costs because we are not comparing like for like between the two years and that is the difficulty. We will be comparing like for like next year to this year, but we cannot compare this year to last year on that kind of like for like basis. Then it would be fair to say that if you subtract the operating costs of which there are £63.3 million from the budget of £426 million, leaving you with a figure of £363 million, compare that to the figure for last year of £405 million, that is the level of the cuts of about £40 million to this budget. I have already said that there were some administration costs that were included in last year's budgets. It is not a straightforward like for like comparison and there is really not much else I can say apart from the fact that this is a discontinuity that applies across all portfolios because it is a new way of presenting budgets and all portfolios are having to deal with that. So I cannot give you an answer between this year and last year. We will be able to be much more clear about it between this year and next year. Can you write to us about that possibly because it is far from clear that we are unable to assess whether the budget is growing up or down? It is because I can write to you but it will only be an expansion of what I have already said because there is not a way to do a straightforward like for like comparison. Because of the way previous budgets were drawn up and the way that this is being done and this way is making it much more transparent. We have run out of time. I want to thank the cabinet secretary and our officials for the time this morning. We are going to spend this meeting for five minutes to allow the change in panel. Continuing our scrutiny of the 2019-2020 budget, I am delighted to welcome Derek Mackay, the cabinet secretary for finance, economy and fair work to the committee this morning. He is accompanied by his officials, Simon Fuller, deputy director of economic analysis to the chief economic adviser, Rachel Gwine, deputy director of infrastructure investment and Claire Hamilton, deputy director of decarbonisation in the Scottish Government, stays with us. Good morning to you all. Cabinet secretary, we have been discussing preventative spend a lot in this committee. We have obviously asked the cabinet secretary for environment, climate change and land reform about this in the previous session. I want to ask about how you are building that into how you allocate budgets across the portfolios. Has the evidence of the wider benefits of environmental spend resulted in any shift in budget allocation from other portfolios to the environment, climate change and land reform taking into account that it could have an impact in preventing spending in the future? That is a very interesting question. If the outcome and the objective that we are trying to achieve is the appropriate preventative spending to take cost and negative societal impacts out of the system, it is not for me to reframe your question, but to ask whether there is a simple transfer from one portfolio to another around preventative spend. I think that much of the focus of what we are trying to do as a whole Government around preventative spend is to say that, if it is the right policy, it should try and apply across Government. For example, transport, active travel of course is good for the health of the nation, health of the individual, health of the environment as well. Transport sits in the transport portfolio naturally, so it is still the correct preventative intervention, but it would not necessarily mean that that line comes from that portfolio into environment. Right across Government there is an approach around the preventative approach, but it is not necessarily as simple as a transfer from one budget to another. Into the various portfolios that impact on the environment? Yes, and in some instances there will be different contributions from other portfolios into a function. A good example of that is local government in Scotland benefits from a range of funding streams. It is certainly complex. There is the general revenue support, then there is ring-fence funds, and there is support that comes from individual portfolios to local government. I just make the point that it is the totality of our approach that is important around prevention rather than on individual portfolios or individual budget lines. If we are focused on prevention, it is what we can do as a whole Government that is really important. The Deputy First Minister leads the Public Service Reform sub-committee for the Scottish Government, where we focus on outcomes. As much as the budget has the inputs of resource, we are united as a Government around outcomes. It is from that perspective that we should look at policy. If we look at climate change and what we need to do for the environment, that is not just to preserve the environment secretary or the environment committee for it to be successful. It is a whole Government approach. That is the best way that I can address the question. The finance secretary will look at the totality of the budget, but there will be instances in which there is transfer from one portfolio to another. Active travel is a good example, because it has more than doubled in recent years the allocation to active travel for the benefits that it brings to the individual and the environment, but it does not fit nicely in the portfolio. It is a pretty good example. The Deputy First Minister seems to have a quick question. Do you want to commend the back of that? Thank you very much. It is just a general question about the whole issue of preventive spend. Clearly, preventive spend is incurred to save money in future. I just wondered if there is any broad brush sense—because I know that asking for detail would be a waste of time—as to what proportion of preventive spend results in a cash saving for Government and what proportion of it actually is a societal benefit that we can put a number on quite properly in terms of quality of life for people and so on. Have we a sense of how that preventive benefit that comes from preventive spend is allocated in different ways? Of course, it is all very well asking the Government to spend a million quid for a 10 million quid benefit, but none of the 10 million necessarily comes back to the Government. It is a good question, and I tell you that it would be a consultant or an academic's dream to be commissioned to come up with that analysis. I think that the truth is that it depends on what the spend is on. If we are making an intervention, what is the subject matter? I think that economists would love it as well to spend days on that very subject. Naturally, it is a general question that we have to spend on the day-to-day remedies. The health service is a good example where we are proposing in the budget to make a substantial uplift to the health service. That is a mixture of direct and front-line services—GP, but there is prevention as well. Mental health is a good example, but I think that you would have to look at it case by case rather than say, if you invest £10 million, the multiplier as such would depend on each individual investment, the nature of that investment, and then you could come up with a formula or an exercise that could explore it. We have to get the balance right, so we are at the same time investing in our public services and recognition of the financial context in which we find ourselves, but also turning the tanker, so to speak, as well in terms of the transition to low-carbon economy, protecting and enhancing our environment, recognising that a healthy economy needs a healthy environment, that there is a positive domino effect from preventative interventions, but we have to get the balance right, so that is not to the detriment of other areas of need at this point in time. I understand the desire to have more formula around that. It depends on case by case, the nature of it and the statistics that we would have around it. I think that is the best answer that I could give in the circumstances, convener, but I doubt that Mr Fuller could answer any more than I have given. He may want me to commission work around that, convener, if you want to hear any more about the modelling and preventative spend, in addition to what I have said, or if Mr Seyms isn't happy with it. Okay, we're happy with that. Finlay Carson has a short question. Maybe he can prove further. You're obviously a gentleman who would like to see return on the money and invest, but also this committee is interested in the working together and the environment, the economy, health, climate change and so on. If someone suggested to you that you could make a 225 per cent leverage on the money and invest, which would deliver sustainable and inclusive economic growth, would you be interested in that? If that's the case, why is this Government not interested in considering additional national parks in Scotland? I think that's more a question to be fair. I'm not sure that's a question for the finance secretary or for others. I was formally a planning minister, of course, in the Scottish Government. I took a keen interest in the two national parks in Scotland. I want to touch on a point about return on investment. Sometimes we do the thing because it's the right thing to do and it's not necessarily about money or financial return, of course. Sometimes we'll make a financial intervention that doesn't financially benefit the Government, but the wider benefits to society are worth doing. I think that there are very specific issues around the request for a further national park in Scotland. Essentially, if we have a planning system that's working well, then we can get the right balance between economic growth and environmental protection. They can be mutually beneficial. I'm sure that every part of Scotland should also enjoy the relevant environmental protection that's appropriate in place, but we should also celebrate our wonderful natural assets. I'm sure that Mr Carson will continue to take the matter up with the relevant ministers. One thing I would want to say, though, is that we want to protect our environment. We want to protect every part of our country, but we also don't want bureaucracy to get in the way of our objectives as well. I think that it's important that designations are right and appropriate. I just say that as a former planning minister, with an interest in both the environment and sustainable economic growth. I'll hopefully that's of some assistance. I'll go back to the substance of the budget now in questions from Claudia Beamish. Thank you, convener. Good morning, Cabinet Secretary and officials. I was heartened to hear your comment, Cabinet Secretary, just earlier in this session about the whole government approach. That leads us on from the previous questioning to the capital budget and infrastructure investment, which myself and Mark Ruskell are going to ask some questions on. In the analysis provided by the Government to the committee, what areas of spend could you clarify for us that make up the 31.8 per cent of infrastructure spending classified as low carbon, and those that are classified as the 10.1 per cent of high carbon? I know that the committee will welcome the commitment that we've made around increasing the share of low carbon spend. I'm sure that that's welcome and that's a commitment that we wish to keep. Generally speaking, I'm sure that you don't want me to be exhaustive, but it's the approach that was suggested that we take that we're following. It is very high level to be fair. In terms of high carbon, it wouldn't surprise you to know that that would be roads and airports, for example, in terms of high carbon. Although, again, there's a debate if we're decarbonising the roads network, and surely that's the direction that we want to go in. If we're decarbonising the road network arguably, taking congestion out of the system and making sure that we're electrifying the road network has its benefits too, but if you can imagine, it wouldn't surprise you that, for the purpose of this analysis, roads and airports are high carbon. In terms of low carbon specifically, that would include, for example, rail, ferries and waste, and energy efficiency would be deemed as low carbon. Again, it is very high level analysis that we've conducted, but it is the methodology that was suggested to us that we're following. Thank you. I understand if I'm correct that you've indicated an openness to improving the methodology in conversation with our committee. I wonder whether you have any sense of vision as to what changes you would like to be making in that respect. I don't, other than I say I'm open-minded on that. Having acknowledged that it's high level, as part of the budget negotiations, we were asked to make this concession. We've done that. It was a suggested methodology. We've taken that. I think that's a pretty open-minded and constructive approach to which I am continuing to have dialogue if the committee wishes to explore this further. I'm open-minded on that so that we stay on this direction of travel, of what we're trying to achieve—a low-carbon economy—and take the harmful effects out. I'm very open to further engagement on that in a constructive way. I don't think that I can be any clearer than that. I'm sure that the committee welcomes that. Just to turn to the infrastructure commission and whether you can in any way clarify for us the balance of the objectives that you have set to significantly boost economic growth and support delivery of Scotland's low carbon objectives and achievement of our climate change targets? I know that we're going to have the just transition debate later in Parliament today as well, so there's a nice follow-on from the theme of today. It's to suggest that investing in infrastructure doesn't need to be harmful to the environment. Of course, it has to get the balance right. Incidentally, just for the purpose of accuracy, Mr Matheson will lead on the infrastructure matters. The relevant secretary for transport infrastructure and connectivity is not me, but I'm cited on the relevant information. Would it expect that the infrastructure commission will absolutely be focused on the low-carbon agenda? The advice that it gives to Government will be very mindful of that balance. It is about connectivity and infrastructure, but it will be able to advise on transport, connectivity and digital on any of those matters. Of course, we would expect to have the commitment on low-carbon as part of its role and function. It will be independent of Government, but similarly to the national investment bank that I will lead on, there's an expectation. That's the Government's policy, that's the Government's drive, we have a climate change plan, a climate change bill. I think that our intentions around the environment are clear. Any agency working with us, for us or working to our agenda should bear that in mind as they conduct their affairs. Again, for clarity, it's the transport secretary who leads on infrastructure matters. Mark Ruskell on the theme. It's good to hear about the commitment to low-carbon investment for the lifetime of this Parliament. I think that the analysis that we've had produced by SPICE suggests that we've got, particularly in this year's budget, a very high level of low-carbon investment. It's less convincing about the trajectory going forward. The question is really about how certain you are, Cabinet Secretary, that we're going to sustain this progress over time and what your analysis shows. I think that it's very important to bear in mind that the commitment that is around the capital budget and the budget is set year to year. I welcome what Mr Ruskell said about the progress that has been made. I just make the point gently to all members of committee that if the budget isn't approved, the spend doesn't happen and we don't make that progress for the environment. It's significant to say that because I think that the investment in transition to low-carbon economy, the enhancements around active travel, energy efficiency, we're on target to make that commitment over the term of Parliament, rails another significant investment as well. Investment in housing to a very high standard replacing what was there. Those are all welcome capital investments. As I understand it from the UK Government, and I saw some of the evidence earlier and you've touched upon Brexit, this budget, as proposed, is contingent upon a deal, an orderly Brexit. If there's no deal, and of course that's subject to parliamentary votes in Westminster, if the chancellor revisits his budget, I'll have to revisit mine. The reason I make that point is that we have set out a number of multi-year commitments. Housing is a really good example of that, so we've set out resource planning assumptions for a number of years, but generally speaking at the moment it's been one-year budgets. If the UK Government conducts their spending review, and that gives me enough certainty notwithstanding the complexity around the fiscal framework and the fact that our devolved revenues will be year to year, but if I have more certainty then I could develop more multi-year funding arrangements. But as it stands, it's a one-year capital budget presented to Parliament. So if I approach that for future years, the commitment in the principle stands, but I haven't set out a capital budget beyond financial year 2019-20, and that's why it's hard to say, and here's the commitments that show how you would reach that target year on year, other than to say it's a commitment I want to keep, and then say having categorised some of that spending. That helps to influence our spending decisions, doesn't it? If we want to keep that commitment, keep increasing the proportion of low-carbon spend, then that helps us to guide us in the budget process, but again in fairness I've only proposed a one-year capital budget, and so I can answer that question more fully when I'm able to present future years of budgets. Do you think that if you had that certainty there would have been implicit waiting within that towards more investment within low-carbon infrastructure? Are we talking about rail or what are we doing? So again right now I'm working very hard to get this budget through Parliament for 2019-20, but what I'm saying is yes the commitment that we have made as a government I think will help direct us in where we allocate our capital spending. Now there are many demands upon the budget, whether that's digital or a housing transport as well, so there'll be a range of requests on the budget and I have to balance a whole host of dynamics in allocating the budget, but if we set out a principle of increase, as I have done, of increasing the contribution of the share of low-carbon spending, then of course that's a guiding principle for me in compiling the budget. Will the infrastructure investment board's role in guiding you on that and the commission separate to that? So the commission will certainly advise government principle as I say through the Cabinet Secretary Michael Matheson and it will look at the demands, the transition of the economy, the requirements to spend, but it has to keep the low-carbon ambition in mind. But what I'm saying fundamentally, whatever advice I am given, I am reiterating a commitment in the direction of travel that I've set out, so whatever advice I'm presented with it is still for government and ultimately Parliament to decide if it wants to approve a budget or not, so I'm trying to be as reassuring as possible that it's a principle we're trying to deliver. The useful thing about having an infrastructure commission, it brings that independent perspective to it as well. It will take the time to focus on the evidence, the information then present to government and you know in the end Parliament, so that's a very helpful development in terms of infrastructure advice for our country, but it's still Parliamentarian's job to decide how we allocate Scotland's resources through the budget and it's from that principle background that I'm trying to reassure members that we're staying on this direction of travel. Just a brief question, Cabinet Secretary, and given that your budget is contingent on a deal on Brexit and presumably you wish to see your budget succeed, are you urging your SNP MP colleagues to vote before the proposed deal in the House of Commons today? Mr Scott, I feel as if that question is a wee bit above my pay grade in terms of instructing my parliamentary colleagues elsewhere, but I think that Mr Scott will— Is the current current or future pay grade? Mr Scott, I think I missed that last question and I think it was good that I did. I think it's fair to understand that the Scottish Government's outlined a compromised position to the UK Government, which would keep Scotland in the single market in the customs union. Of course, we would rather have full membership of the EU, but essentially the Prime Minister's deal is detrimental to the UK and to Scotland, so no, we're not of a view that the Prime Minister's deal is good for Scotland. No deal is pretty catastrophic. The Prime Minister either deliberately or accidentally has a number of times now mentioned no Brexit. It wouldn't surprise you to know that no Brexit sounds pretty good to the people of Scotland who voted to remain within the European Union, and I think that the UK Government has got themselves in an almighty mess in relation to Brexit. It has mismanaged the whole process and it's hard to see what the Prime Minister will do next. She can only answer better than I do, but what we're trying to do is get the least damaging outcome for Scotland. Frankly, right now that is no Brexit. We've set out a position as to how that can be achieved and we'll have to see how the events unfold today and over the next few weeks, but I have to be very clear. Mr Russell and I have set out the implications, the economic impact for Scotland, and it's damaging environmentally as well, and for that reason I would encourage the Prime Minister to pay attention to what the Scottish Government and many others have been saying. Now we move on to questions from Mr Stewart Stevenson. Thank you very much. Just before I ask my questions and I'm not sure the Cabinet Secretary will be able to answer it, but I understand that the carbon assessment includes an assessment of the carbon impact of imported services and goods. Does that actually feed through to the UK Climate Change Committee assessment of carbon or does it exclude imported services and goods? I'm just trying to see if we can compare, because if they're different then we can't. Can I just make one point around the carbon assessment? I think it's a really significant point. The carbon assessment of the budget only quantifies that immediate impact in terms of emissions. The reason it's important to understand that it doesn't then quantify the future effects of that policy or financial intervention itself that comes separately and overall through, I would imagine, the climate change intervention and the climate change plan. The reason I make that point is that the budget says that if you're spending more and let's bear in mind, despite on-going austerity from the UK Government, that budget proposes a £2 billion increase in expenditure in Scotland on the priorities that we share. Normally what comes with increased expenditures and increased initial increase in emissions doesn't take into account the future benefits of that intervention. Even if it's an intervention that might, in particular policy or financial interventions, lead to a reduction in emissions over a period of time, that's not what the carbon assessment counts. It's just the immediate impact. Can I turn to Simon for the more specific question? As you say, Mr Stevenson, the carbon assessment includes imported emissions, and that's similar to the carbon footprint publication that we produce, which looks at emissions associated with overall consumption in Scotland. As you say, it is different from the overall climate change targets that the Climate Change Committee feed into, which are based only on domestically produced emissions. I just thought that it would be helpful to make sure that I and other colleagues had that shared understanding. Let me now move on to more specific things. It was not intended to be other than general where the Cabinet said it because I recognised the issue. In terms of NHS in particular, what are the most carbon intensive parts of their expenditure, or is that the sort of question that really has to sit with another cabinet secretary? On any of the specific technical questions, I'm more than happy to get relevant information from other parts of Scottish Government. In terms of running of the national health service, I imagine that the restay will be the substantial part of that in terms of the carbon assessment. I'll be spending more in the national health service, of course. Again, I'm happy to get officers to provide more information if they require it on this. I suggest perhaps that that be done, but also I think we're interested in particular in what's happening in the rural portfolio with the support cap pillar one, greening payments, and so on and so forth, because that's a big area. Let me move on to the final bit that we can deal with perhaps just now. That is in terms of the lock-in effects of infrastructure investments. To what extent are you being influenced in your spending decisions and allocation of funds by those long-term effects? We are building roads. We are electrifying roads, and that's good in the longer term, but in the shorter term, as we build roads, we probably are increasing over a number of years the carbon impact. I think that relates to Mark Ruskell's question about direction of travel in terms of capital spend. Can I just briefly go back to agriculture just to make the point again that on agriculture, of course, is quite carbon intensive by its very nature. The substantial spend that we have there around cap payments is for that financial support. Again, I think that that's something that's largely been welcomed. I'm sure that Fergus Ewing in particular would be more than happy to go through the environmental considerations of that, but that's our major financial intervention, those cap payments, and because the sector is so carbon intensive, that would explain that outcome. On specifically how we're locking in in terms of infrastructures, we're in part guided by the infrastructure investment plan, so that sets out the infrastructure that's required, but of course it's published it in a point in time. There are developments from that. There have been more developments around the environment, around our understanding of the low-carbon agenda since the infrastructure investment plan was last set out. We've also got the national planning framework that I almost seem to be very familiar with as well. There's a range of policy guides that take us through our infrastructure spending, then there's demand, then there's the financial circumstances in which we find ourselves with, because there was a change to rail financing that's come from the UK Government as well. Those are all material considerations in the year-to-year capital budget, and in aspiring to meet our target around new homes as well, we're leveraging in that, some over £800 million in housing. We have to look at the totality of demands and policy commitments around the capital budget, but undoubtedly we've been delivering in terms of the trajectory on spend on energy efficiency, the active travel, it's been very welcome of more than doubled that. The rail investment is significant, the spend around electrification on rail, and we are proposing to continue investing in low-carbon transport. There's very specific funds for low-carbon transport as well, so although we have the guide of the infrastructure investment plan, as I say, there's been other interventions that have ensured that we have enhanced our position in terms of investment in low-carbon spend as it relates to the capital budget. One amendment that the committee asked me to make was to include financial transactions in that analysis as well, which I've done and that's part of that figure, which is surely to be welcome, because the request came from this committee. I think I'm trying to get evidence that we're mindful of it as we take our decisions around capital. In some ways, some of the capital spend is deemed as neutral. Digital is a good example of where you could quantify, again, an issue investment in digital in terms of immediate emissions of doing the work, but there's huge long-term benefits of a more digital society because it could reduce need to travel and other more harmful impacts for the environment. It may be worth saying that it's been suggested that the Edinburgh Glasgow electrification will only require 10 wind turbines to provide the power for the entire scheme, and I declare my honorary vice-presidency of Rail Future UK matter that relates to my enthusiasm for railways. Welcome the increased electrification of the rail network in the greener, cleaner, faster, longer trains with more capacity. Now moving on to questions around local authorities and other public bodies from Mark Ruskell. Yeah, as long as the trains run on time, but yeah. Can I just ask about city region deals? I mean, obviously, significant investment for both UK Government and Scottish Government £192 million being invested in 1920, but again, how do we get a grip on whether that's carbon neutral, whether it's high carbon investments, whether it's low carbon investments? Is the investment in the city deals going to lock in emissions to come? I mean, how does Government assess that? Which better Government assesses that then? Well, to an extent again, I think that local authorities, before they share a low carbon ambitions, but the nature of city and region deals is quite different to just general investment and spend in capital because of the nature of negotiation, because there are a deal essentially between UK Government, Scottish Government and the local authorities and other partners as well. I mean, there are some examples where the spend, if you take an earlier deal like the first deal was Glasgow, I was a signatory to it as the local government and planning was. It felt very heavy on infrastructure, that's not necessarily a bad thing, but the more recent deals have arguably focused on jobs and skills and, with Edinburgh, the example around the bio-quater or digital. Do you see how the deals are very specific to the locale, the nature of the negotiation, the desires of the economy in that part of the country? There's always the expectation of low carbon, but I suppose in the essence I don't have a specific measurement of the city deal arrangements. There's the great of my powerment here. Government can't be accused of centralising in relation to the city deals and then saying that we're holding local authorities to account on the carbon assessment of it, but they all share our low carbon ambitions, so I don't have a specific assessment of what the city and region deals will emit in terms of emissions. Again, if the committee wishes me to explore that, that's a slight change to how we have overseen the arrangements around the city and region deals, but again you have to understand a premise that they are about partnership approach to lead to a deal, which then invests in a region or part of the country. Although the Government, of course, is a key player and a key funder, I haven't got a separate set of monitoring arrangements, that may well be resisted. There is a gateway process, there is a partnership approach, but I've just been clear with the committee that it's different to that mainstream capital spend that the Government is directly responsible and accountable for. If the information was available, would that not help on the decision making about in particular transport projects that are getting into city deals or not? As you say, it's a negotiation with partners. It's not all about the Scottish Government or the UK Government, but would it not help to have that carbon information available? Yes, it may well be helpful, but each business case, indeed for each project, is taken through the negotiations and arrangements for each city and region deal. I just say that it will depend on the project and it will depend on the deal, but the world has moved on. We absolutely have clear environmental commitments, we expect them to be followed when negotiating them out, but I'm just expressing the difference in the early deals to the deals that we have now, and they have shown the focus on the low carbon transition. Indeed, some of the work that's under way right now is to absolutely support innovation around environmental objectives as well. We didn't need the assessment to lead us to that conclusion, but further information may well be helpful. I don't want to go back necessarily, and again, this is as much or more a matter for the infrastructure secretary than me who leads on city deals and infrastructure, but we wouldn't necessarily want to retrofit new monitoring arrangements, but I understand the desire to know more about what the city and region deals are contributing by way of emissions. I'm just being perfectly clear that we didn't set out, here's the assessment that you would have to undertake to enjoy that deal. I think that everyone's very mindful of those demands as we've taken the deals forward. As I say, they are evidenced by some of them being about innovation and taking us to the circular economy, the low carbon economy, digital innovation, better use of resources, so on and so forth. My question may be for our colleagues in the local government committee, as they scrutinise the city deals. Claudia Beamish, I'm aware that you might have wanted to come in on that theme. It was just to ask you, cabinet secretary, about public sector climate change reporting duties. Is there a working group on climate change reporting? I wonder if that comes up with recommendations about concerns about the public sector. To put it bluntly, will there be any more money for support for any initiatives that have to be taken forward? I wouldn't close down an evidence-based case. I just say that the budget, as I have presented it, is what I would like Parliament to pass, but I am always open to suggestion that I am happy to engage in any evidence that is brought forward. When any member of the Opposition asks me for more money for something, I have to respond and say how much. Where is it coming from? What would you take out to fund any amendment in the budget? Claudia Beamish is playing a part as a committee member. I am interested in looking at any of the detail. I do not think that the scale of expenditure is massive, but that is often what is said to me in any request for funding. It does all that up. I am happy to look at the evidence. You asked me to close my mind. I know that I am not. Of course, I have to minority government look at concessions as part of the budget process, so I am open to engagement. In response to our committee's pre-budget scrutiny report, the Government stated that it was committed to becoming world leaders in development of local energy systems. However, if we look at level 4 budget figures, there is a significant rise in spending, but those are largely contributed to allocation or redistribution of capital from the energy line. Has there been additional support given to renewables and community energy? That is probably more a matter for Fergus Ewing, particularly, I imagine, within his portfolio unless we get anything that it can assist to hand now. Do you want some of the detail? I am interested in finding out whether there was additional support out with the increase of 235 per cent in community energy. How much of that is attributed to redistribution or how much is additional support? The information that I have is that renewables and community energy have received £10.1 million in resource, but that will include £2.8 million in operating costs and £13 million in capital. That is broadly level budget from the previous year, if that is of assistance. I should say, and I think that you were touching on this earlier, that, generally speaking, I have changed how we approach administration spending, because I think that the approach around total operating costs is more transparent. It is covered in the budget document and it is trying to outline the figure as it sounds, the total operating cost of government. Previously, it was quite complex where we had administration spend, so that came from the centre, if you like, to support the administration costs of individual portfolios, but still there would be administration costs and project costs and no clear lines within portfolios of that spend. Total operating costs is far more transparent, much clearer on the cost of operating by definition, but recognising that this is the year that has been implemented, there is that base lining that starts from this year, having set out in the budget that I have. That is a more general comment that relates to individual budget lines, which is why it is sometimes quite hard on this occasion to do a like for like analysis. Portfolio can answer more about specifics of lines within a budget, if that is of assistance. I might get the same answer, but there was additional support given to deep water port facilities, decommissioning activities and development of offshore wind. Can you tell me how much additional support has been given to deliver the deep water port facility and what the timeline is for delivery? My understanding is that we have around £10 million that has been allocated to deliver the deep water port, but if you want more information on the progress of that, I would refer it to the portfolio minister. I would turn to operating costs in the clear portfolio. We know that the new budget document changes approach and all operating costs are now presented within portfolios. Given that admin budgets no longer exist, can you set out how administration costs have been apportioned to and distributed within the clear portfolio at the detail of level 4 figures? What is the overall additional administration cost that has been included in this year's budget? I was trying to set out earlier that it is partly my recognition that the administration budget did not cover the total cost of administration by definition because essentially what we have inherited as a Government and as a Parliament budget, within portfolios, individuals spend essentially on administration. That could have been programme, that could have been delivered on a project or a policy commitment. I feel that moving to total operating costs is more transparent. It gives you the total cost of doing business, doing government. There are still some central corporate costs, so we went through with portfolios what we believe they share to be quite a complex exercise because there are still some central costs that portfolios can contribute to. For that reason, it is hard to do the like-for-like analysis because it would have been an academic exercise to try and establish the retrospective administration cost, but this system is much clearer. Before I determined the administration budget and allocated it to portfolios, now it is part of a portfolio allocation that is for the Cabinet Secretary to look at how it would like that element of total operating cost to be allocated. For example, if a Cabinet Secretary of Minister wanted to spend more on a particular thing and take it from a total operating cost, it would have that flexibility. That is the start of that way of doing business, rather than traditionally how we have set it out. I am happy to look and see what other detail I can provide around administration, but it is very difficult because it is not like-for-like the system that we have gone from to the system that has been implemented as proposed in the 2019-20 budget. For that reason, it is hard to extrapolate those individual lines by acknowledging that the administration line is now part of portfolio budgets. I will look at what further information I can give to the committee in light of the question and supply that to the committee, but that is the explanation for the change. Okay, thanks, Cabinet Secretary. I get the issue with regard to like-for-like analysis, but I think that certainly the committee would appreciate further detail. It would certainly be helpful. If I could maybe use an example, using the Sustainable Action Fund, if the administration budget reallocation to the Sustainable Action Fund is stripped out, what can you tell us what is the actual change and resource available for its sustainability and climate change work? Is the SAF's programme of work requiring re-prioritisation because of less resources? If you look at the wider issue around the environment, climate change and our focus, it is clearly a focus on the climate change bill. There will be the just transition as well. I think that there is a lot of work going on. If you were to look specifically at the Sustainable Action Fund and if the administration budget reallocation is stripped out, the SAF budget for 2019-20, once total operating costs and corporate running costs are deducted, will be approximately £16.5 million. That is compared to a budget of approximately £19.5 million in 2018-19. However, what I am trying to address through the change and administration budget is to have a more transparent, clearer figure around the actual total operating costs. That is why I do not think that it is necessarily appropriate to have that like-for-like analysis. In any event, as I say, there is much wider interventions and involvement around our climate change programme. Can I take you to delivering low-carbon infrastructure questions on that regard? Can you tell us, please, Cabinet Secretary, to provide us with an update on the Government's work with Scottish energy intensive industry representatives and what options are there for incentivising investment in decarbonisation or efficiency? I would probably refer that to the most appropriate, Cabinet Secretary, which is the infrastructure sector. My understanding was that there was a round table, but I think that it is more appropriate that the portfolio answer that in terms of developments going forward and engagement with the sector that he would be undertaking. I am happy to get more information to the committee, but my understanding is that there had been a ministerial round table. Right. You will maybe ask him to answer that question for us, just on a slightly different subject, but I am nonetheless germane in terms of costs. I know that we have an infrastructure commission planned, a public energy company, a just transition committee and the land commission. What are the costs of all those new quangos? That other people, including the Opposition, tell us their support, I have to say, Mr Scott. So it depends on the nature of the organisation. It also depends on their formulation. The just transition commission, again, has been called for. I think that it has been welcomed. We will probably see more about that in the chamber later today. However, if we are serious about protecting the environment and getting that independent expert advice, then surely the range of bodies are to be welcomed. As we develop each one, we then compile the costs so to do. Again, if there is a range of costs depending on if something is advisory, the nature of it or if it is statutory, so on and so forth. The Government has, of course, an ambition to reduce the number of quangos in Scotland. We have been achieving that since we came into office. However, in recognition of the priority to which we attach the environment and transition to a low-carbon economy and to get the best possible advice around infrastructure, that is why it has been established as a need for the bodies. We will look at value for money, of course. The committee opened on preventative spend earlier today, so good advice if it leads to better and good decisions and, ultimately, better outcomes, then it will be value for money in a worthy spend. Mark Ruskell, I want to ask you whether you are considering any new fiscal powers for local authorities that could help with raising revenue for local authorities but could also help with the decarbonisation agenda. Essentially, as Mr Ruskell knows very well, I have set out the budget that I am proposing on behalf of the Scottish Government. This is a minority Government, and we will have to find a compromise, of course, for the budget to be passed. I am open to opposition parties engaging in the budget process of negotiations, so we can find that necessary support that the budget can be passed with the benefits that it brings to Scotland as a whole, as we see over £2 billion additional spend in our country. That is worthwhile. This is the stage in the budget where I am open to engagement from political parties. It is no secret that the Greens, a party to which Mr Ruskell belongs, has made public statements around progress on local taxation. That has been raised, and I will continue to discuss with parties as we take the budget forward. As I have said publicly before, I am open to engagement with political parties to see the budget passed. Thank you very much for your time this morning. Is there anything else that you would like to say in relation to the allocation of the budget to this portfolio before I let you go? No, I am here to answer your questions. The only thing that I would say is that the budget is set in the context, because it is worth mentioning, that if you take the health consequentials out, what I was dealing with was a very challenging settlement from the UK Government and that on-going austerity from the UK Government. Despite that, I have still been able to make an allocation to this portfolio that I think will keep helping us deliver around our climate change aspirations and ambitions and make the right investments for Scotland. Thank you very much. I am now going to suspend the meeting briefly to allow the cabinet secretary to leave.