 Ydw i Awwr sucho, i feithio ar llawer cyn railau pelvis. Mae'n unrhywエ versteo gyda'r ysgrifffordd yn dis remarkably hon没. Jump in. Efallai gyda'r yr ystafell o gwylio gweithio a'ch ddweud yn familiesulau sector gwrth o'r считgo ganFinans ahefniddedd? A gwYN yfodgwydodfors beth-prinampadion,?" was published on 1 March. I welcome Kate Forbes, Cabinet Secretary for Finance and the Economy, who is joined by Colin Cook, director of economic development, Gary Gillespie, chief economist and Adam Reid, deputy director for skills and the Scottish Government. I would ask members and witnesses to keep questions and answers short, and I invite the cabinet secretary to make a short opening statement. Thanks very much, convener, and I'll take that on board and keep my opening remarks fairly short. As you said, the national strategy for economic transformation was published earlier this month. It sets out what we want to achieve as a country. We want a strong economy that outperforms the last decade, which builds on our strengths and recognises some of our weaknesses. Some of those weaknesses are short-term in terms of the emergence of the economy from Covid, but some of them are longer-term. The strategy doesn't shy away from that and uses extensive detailed analysis, consultation and input from the advisory council that we established to develop five programmes of action. Although the document that is being published as it were is the front end of the strategy in terms of the actions, I encourage members to engage with the analytics paper, which is a lot more lengthy and more detailed when it comes to the data that underpins those actions. The five programmes of action are about our citizens, entrepreneurial people and culture. It's about the economic opportunities that are emerging, new market opportunities, particularly around net zero. It's about the need to be more productive, our businesses and our regions. Lastly, it's about what will enable this, the skilled workforce, and what we want to achieve, which is a fairer and more equal society. Ultimately, the country will judge me and the Government on our ability to deliver what we have set out. There is a sixth programme, which is hugely important, which focuses on delivery and introducing a new streamlined model to maximise our success. I know that that has been an issue of interest for the committee on a number of different occasions that I have been in front of the committee. That is probably all that I have to say at the outset. I could go into detail about some of the challenges that we face, not least since the strategy was published, the situation in Europe has got worse and that clearly will have an economic impact. My last comment on this strategy is that publishing a 10-year strategy when none of us have a crystal ball is a challenge. It has to be flexible enough and high-level enough to be able to adapt to emerging situations, but it also has to be focused enough in terms of what the routes to success are. I hope that we have achieved that balance of being flexible and focused on the macro level as well as being focused on those key vehicles of success. You have mentioned a number of areas that the committee members will wish to explore, not least the changed context that the document has been published within. There have been some questions raised about whether the recognition is a high-level document that it is not clear what is different in this economic strategy to previous economic strategies and may know that there are significant issues with Scotland's economy. What is new and what is different that will mean that this strategy will make deliver on the priorities that you have identified? Interestingly, that was one of the questions that I posed to the various advisory council members and a lot of people that we consulted with. What is it that you need to see in order to deliver a step change? By and large, the strong feedback that we heard was that we know what to do. I am sure that the committee and Government are probably fairly aligned on what we need to do when it comes to the Scottish economy. What we need to improve is our ability to get it done and our ability to be focused, determined and ruthless in our execution of the strategy over the next 10 years. We are looking at international models and examples of Government-led national strategies. What often sets out the successful ones from the unsuccessful is that there is consensus across political parties, Parliament and Government about what needs to be done. Irrespective of the challenges that emerge, those Governments are able to deliver because whoever is in administration knows what needs to be done. One thing that sets out the strategy considerably is a very ruthless focus on delivery. That will never grab a headline. A focus on delivery will never grab a headline. There is a lot in this document that is headline-grabbing, particularly around entrepreneurship, but that focus on execution of what we know we need to do and streamlining our ability to do it would be a key focus. There is one smaller area that is equally important that I would refer to, and that is the new opportunities that I have emerged. In the last strategy that was published in 2015, we knew that Scotland had great strength when it came to our natural assets around energy, but in the past few weeks, we have seen the announcement of the world's largest floating offshore wind technology anywhere in the world. That is remarkable, but it will only be remarkable if we are able to develop the supply chain that accompanies that, seeing businesses established. The opportunities that are massive, momentous opportunities and recognise the world over are new, and the strategy sets out in detail how we will make the most of those opportunities and build businesses and deliver jobs over the next 10 years. There has been a response—I mentioned Fraser of Allander and other organisations—that has concerns that there is not enough clarity or direction. How important are the delivery plans not being published? They will not be published in the next six months yet. Why were they not published with the original document? Will the delivery plans fill that up? I think that they will. I would refer you to the two documents that have been published, the analytics paper, which is quite a weighty document and the easier to read document, which is the emerging actions. We were committing to publishing the document as quickly as possible after the election. Obviously, there was some delay with the emergence of Omicron over the winter period, but we were committed to delivering it as quickly as possible. The agents of delivery are not all within Government. Unlike the health service, for example, the NHS reports directly that it is all in its entirety within the public sector. If you take economic growth, let us say that 70 per cent of the agents of delivery are the private sector, so we absolutely need businesses to be on board, we need entrepreneurs to be on board, we need academics to be on board, and they need to play their part in the delivery and implementation. You will see in the document that we have detailed next to each of the actions who we think owns it, but in order to deliver an implementation plan, we really need to work with them to do that. We believed that it was more important to publish high-level actions and then work with them on the implementation plan. The convener has covered the views of the Fraser Vallander Institute, but there has been a number of our organisations raised concerns and some pretty imminent people, too. I raised with you in the chamber the response of Ronald MacDonald. This report provides a widely known and understood diagnosis of the problems facing the Scottish economy, but on solutions that are simply a rehash of all the failed scripts that we have seen since 2007, the kind of substantive issues that we need to discuss are simply not there. You have talked about, obviously, the strategy, your hopes for the strategy and delivery. Can you tell us how you will measure that delivery and how you will keep us updated on where the strategy is in terms of delivery? Let me take those two questions in turn, because the second question was about measurement, and the first question was about solutions. Perhaps I could take advantage of the opportunity to say that I am pleased that Ronald MacDonald agrees that we have diagnosed the problem, because that in itself is the first start. Again, I would go back to saying that it is easy to shy away from diagnosing the problem—the long-term structural challenges and some of the short-term post-Covid challenges. In terms of the solutions, there is a lot of material in this document, which is new. I have already referred to some examples when it comes to developing a more robust supply chain, a Scotland-based supply chain for our renewables. I am sure that you would be one of the first in the chamber to criticise the Government for not having done enough to develop the supply chain for the renewables. The fact that we have set out a comprehensive plan for how we are going to do that and a commitment to do that, to my mind, sounds like it is new. I think that it is unfair to suggest that there are no new solutions. What we have done is start with the data, diagnose the problem and identify the actions to get there bearing in mind that not all the agency lies with Government. A lot of the agency lies with other institutions and the private sector. In terms of the measurement, that is vital. If we are not measuring the right things, we will probably not be able to define what success looks like. Ultimately, in the implementation plan, there will be clear metrics for success. I will go back to the analytics paper on what we are measuring. If I give you an example of entrepreneurship, Scotland is an entrepreneurial country. If you define it in terms of, for example, entrepreneurial activity, start-ups and new businesses, where we are not performing like we should is when it comes to scale-ups. In other words, the success rate for new businesses is not as high as it should be. There is much to celebrate in the way of entrepreneurial activity. If you just stopped there, you could say that that has been a success. In terms of business survival rates, there is a problem. We do not perform in the same way that Ireland performs and so on. What you measure is key, and we will set out those measurements. That is unpacked in the analytics paper, particularly in the example around entrepreneurship. I do not know whether Gary Gillespie, chief economist, would like to come in on this point on measurement, because it was an issue that we debated at length around what is it that we should measure. Mr Gillespie, please do come in if you wish to. Just to add to what the cabinet secretary said about measurement, you will see in the analytical paper a detailed analysis of all the five programmes, the underlying data, and in that context at the advisory council there is quite a lot of discussion about what we will be trying to achieve across each of those objectives, which are different in each domain. What you will see across the 18 projects, 77 actions, some of the actions are continuing actions, some of them are new, some have existing governance, some have data in place at the moment. For those who do not have data, we are looking at how best to measure both the direct action in terms of its impact on the ground, but also its wider interaction. You will see in the analytical paper that we published some illustrative modelling of the types of impact the strategy could have, just focusing on our export performance, a small increase in real wages and productivity, and you can see the impact over a 10-year period can be quite profound. Now, as the cabinet secretary said, we cannot model everything over a 10-year period. The strategy is truly transformation in the sense that a lot of the new market areas that we will see develop, and we cannot model an entirety of the final solutions across those, but in terms of the metrics, we have a clear grasp of all the metrics in those areas. We have already done modelling on that. The work around delivery in the programme with the enterprise agencies and others, we are essentially tying down what the metrics will be both for the action being in place, how we will report progress on that and what it will ultimately mean to our key metrics in the economy, which is set out in the document. First, I do not want to put words into Professor McDonald's mouth, but I think what he was suggesting is that you have not diagnosed the problem. They have been well known within the economic sector, and at last there seems to be a recognition within government that these are some of the issues that are there to be delivered on. One issue that Fraser Vallander also raised is that even if those measures are hit, they have concerns about whether that will lead to the successes or the plan succeeding as you believe it will do. Is that a concern for you? I appreciate that you talked about that we cannot read the future, but even if the objections or the ambitions of the plan are met in terms of deliverables, that might not lead to the success that you wanted. Is that a concern? Again, taking that question in two parts, I think that if we have a streamlined, focused delivery landscape, in a sense, that vehicle will drive itself. If we have a very focused approach from our enterprise agencies and so on on what we are trying to achieve, which is the new market opportunities, more entrepreneurial culture and citizens, and a focus on productivity, again, if you look internationally, those are three ingredients for success. That is not aligned with a particular circumstance, that is not aligned with only being relevant in the immediate post-Covid phase. Those things will be relevant going forward, and they have certainly been the foundation stones for Scottish economic success to date. I think that there is an element there around delivery, but, in terms of the other point, we need to be flexible and agile enough to respond. When it comes to productivity across our regions, I want to see the Highlands, Ayrshire, Glasgow, Edinburgh and the north-east being as productive as possible. That will remain a focus irrespective of what the circumstances are. Nothing is inevitable. Success is never inevitable. In no country, in no planet, is success inevitable unless you go out and seek it. What the strategy is built on is the fact that Scotland has advantages and strengths that are the envy of many other countries. Let's build on them and let's make sure that we are as successful as possible. Maggie Chapman, to be followed by Gordon MacDonald. Thank you very much, and good morning, Cabinet Secretary. Thank you for your opening remarks. I suppose that following on a little bit from Jamie's question on measurement, I'm interested in exploring two areas. One is around the indicators of progress, I suppose, and measurement feeds into that, obviously. The Inclusive Development Index is welcome, but how can we take this further to measure intrinsic environmental well-being? I suppose that, importantly, it also includes the benefits of a care economy that is implicit in the document but does not come out as a significant single thing itself. It's a great two questions. On the first one, one of the actions is to develop a well-being economy monitor. That will bring measures into measurement, such as healthy life expectancy, fair work indicators, mental well-being, child poverty, greenhouse gas emissions and biodiversity. It goes back to the question that was previously asked and to which I responded. The measurements are key, so what we measure really matters. We've obviously been one of the founding Governments when it comes to the well-being Governments initiative, working with countries such as New Zealand to improve our measurement of well-being. We talk about trying to build a well-being economy, but the measurement of it is really important. Some of the elements in that will align with other metrics that we already work to. Around biodiversity, obviously greenhouse gas emissions and child poverty, we have metrics in place. The point here is to ensure that our economic activity is contributing to them, certainly not undermining them, but more than that, contributing to them. In terms of your second question about care, on care, as you say, the strategy is a fairly short document. We could have taken an approach that might have been quite popular, which was to try and go through and list everything that we think that people would like to see as name-checking, but on care there is reference to the importance of care in achieving all of our economic aims. It is an economic strategy, not a care strategy, but, for example, if you take going back to my favourite subject, which is entrepreneurship, the fact that there is still underrepresentation of certain groups. The strategy specifically says that, in order to provide those underrepresented groups with more exposure to entrepreneurship, more exposure to mentorship, more encouragement and support to build a business and so on, we need to understand what is stopping them. If you take women, for example, and it is not just women who have caring responsibilities by any means, but if it is women, that will probably mean enhanced wraparound care support, or where individuals have caring responsibilities. How do we ensure that there is a wraparound support there to help them with their caring responsibilities? I guess that it identifies that if we are serious about supporting those with caring responsibilities, either in a paid capacity or unpaid capacity, we need to do more as a Government to provide that wraparound care. That sits alongside a lot of other things that are going on in terms of national care service and improving terms and conditions of pay for our carers, but that is where it is referenced in the strategy. I see the care economy as being more than just enabling people, giving people the care that they need so that they can go out to work. I think that it is much, much more than that, but I take your point that it is part of a much wider thing and that it connects to other things. In terms of opportunities, we have had conversations before about some of the it is really good to see things like renewable energy, heating buildings, decarbonised transport, all of that, as highlighted opportunities. How will constrained public funding be structured to enable action in these plans and to enable the delivery that you have spoken about? It is a critical question. It goes back to two points. One is that we are, obviously, halfway through our resource spending review, so setting out multi-year budgets so that the strategy reflects and recognises the fact that we do need multi-year budgeting for this to be successful. That is the bottom line. The resource spending review is due to be published in the coming months and that will set out a medium-term trajectory on spending, but, specifically on the opportunities around new markets, that is where we absolutely have to leverage in private sector funding. There is no question about that. It is well documented that the gap between what we need to achieve, for example, to meet net zero and what we have funding to be able to do is quite significant. The bottom line is that that funding is out there. There are $130 trillion of assets under management right now that have been identified as part of the GFans initiative that needs to find a home. It will either find a home in Scotland or it will find a home elsewhere. I want it to find a home in Scotland, but to find a home in Scotland we need two things. One, we need to be clear about the green prospectus. Obviously, we have built the £3 billion green prospectus that we have used extensively at COP26. We need to expand on that and bring in more initiatives so that investors can easily find opportunities. Those opportunities need to align with our values. The second thing is that, as a result of the potentially up to 25 gigawatts of offshore wind energy that might be developed over the next 10 years, we are either going to create jobs out with Scotland or create jobs in Scotland. The way to create jobs in Scotland is to see businesses being established, businesses growing and businesses identifying and taking a larger share of that market. I refer you to project 5 under new market opportunities, which explicitly says, build on Scotland's strengths to win an ever-greater share of domestic and international market opportunities. That is the action that hits that nail on the head, and I do not want to miss the opportunity. You touched upon productivity and I want to ask you a few questions on that area. The University of Glasgow's Productivity Institute report, published in December, highlighted that Scotland's productivity growth has outperformed all regions of the UK over the 1990-1990-2019 period. However, our productivity is still below the UK average, so what are the challenges that Scotland faces in continuing to improve its productivity? It is good to reference that growth in productivity over the past 10 years in particular. It is an issue that a lot of developed countries are grappling with just now. What we identify in the paper—again, there is more analysis in the analytics paper—is a mixture of business investment and the need to improve business productivity. That includes investment opportunities, specifically. It includes areas such as increased digitalisation. We know, for example, that there are more businesses that have access to, for example, superfast broadband than are perhaps using it to its full extent. Business investment, digitalisation and then workforce are ensuring that our workers have the skills that they need to be as productive as possible. Productivity is one of the most important metrics for not just improved economic performance but for wellbeing, because it drives up wages, improves work-life balance and, ultimately, positions Scotland internationally. On the public sector side, we have a role when it comes to improving infrastructure. We have set out the strategic transport review and the projects review that is under consultation just now, but we are investing in the right infrastructure to improve productivity as well. That would be my quick summary of what we are talking about. We have one other part to our actions, which I am hugely supportive of. It is the notion that improving national productivity while leaving parts of the country behind is not a mark of success. We need to identify the building blocks and try to work with every region in Scotland to improve regional productivity, which will then contribute to national productivity. There is a big focus here on not forgetting any part of the country or leaving any part of the country behind. Some regions, in terms of the measurement, are coming across as more productive and are due to the skills mix and industry mix. We need to work with those parts of the country that need additional government investment and support from business. That was my next question about how we supported those areas that are not doing as well as the likes of Edinburgh or Stirling and Aberdeen. In terms of productivity growth, Scotland has eight industrial sectors that outperform the UK average such as energy and finance. I was going to ask what steps will this strategy take in order that other companies and sectors can learn and understand how business can drive productivity improvements? There is a point here around businesses working with business. One of the actions that we have committed to is appointing productivity ambassadors. There has obviously been talk about productivity. Commissioners in the past are productivity ambassadors, and their job will be to work intensively with key industries to drive productivity improvements. As part of that, they work on an international basis. Work, build international networks, work with similar industries in other parts of the world to learn what are the key investments that need to be made perhaps around technology, perhaps around workforce to improve productivity and ensure that there is a particular focus on leadership in these industries for improving productivity. As you see, there are some industries that are far and away significantly more productive than others. We need to work with them not just to be content that they are more productive than others but that they are world leading when it comes to productivity, because many of them are competing on an international stage, not on a domestic stage, but they also work with other industries that are well known. I will not rehearse or list them, but they work with other industries where there needs to be more investment in reskilling, upskilling, digital technology and innovation to bring them higher. The STUC has branded the strategy a missed opportunity to deliver transformative change so that it says that there is not enough focus on improving paying conditions in the foundational economy, which is obviously the largest employer in an engine room of economic activity. Ross Foy, who is part of the advisory council, referred to saying that this is more a strategy for economic status quo than economic transformation. Why do you think that the STUC are wrong? I think that the STUC actually makes a significant contribution to this, and I know that they are very interested in helping us with delivery. On the launch morning itself, there were at least two representatives from unions, including one from Unite, who referenced very specifically how pleased they were to see fair work built into so much of the strategy's work. The programmes of action that we have chosen are based on evidence, but we recognise that economic growth, economic prosperity, is for a purpose, and that purpose is to ensure that we have a fairer and more equal society. There are some pretty pioneering initiatives from a Scottish perspective not least building conditionality into support for business, ensuring that we are focused very much on underrepresented groups and that we ensure greater payment of the real living wage across our economy. Those are all in line with the STUC's requirements. We are committed to developing sexual fair work agreements with industry and we are committed to working with trade unions. In terms of what the STUC and others have looked for in the ways of fair work and greater equality, I think that there is a lot in the strategy that will deliver that. Clearly, when the Scottish General Secretary of STUC says that it is a strategy for economic status quo and not economic transformation, there must be things missing from that strategy. I think that we should go a lot further in terms of conditionality around, for example, trade union access, but one of the big issues that you did mention that the trade unions are obviously deeply concerned about is around those supply chain jobs and need to highlight the issue of offshore wind. In the past, the former First Minister, Alex Salmond, said that Scotland would be the Saudi Arabia of renewables. The Government promised 130,000 renewable jobs. The most recent ONS figures show that that number is 20,500 and it has fallen. Why do you think that the Government has failed to meet those targets? What is your new target for renewable jobs if we are on the issue of focusing on delivery? What is that target? Of course, the Bank of Scotland and PWC would disagree with you, because both of them have referenced that Scotland is leading the way when it comes to the creation of green jobs, and certainly on a UK-wide basis that the greatest opportunities for the green economy are already here in Scotland. That is not wishful thinking for the future, that is the present. Our commitment that comes through the strategy Loud and Clear is a commitment to a just transition. In other words, there are great economic opportunities emerging, and I have already referenced some of them in terms of Scotland, but we need to do that in a fair way. I think that we have a significant distance on conditionality with the commitment to embedding conditionality by this summer. We also referenced the importance of, as I said, sectoral agreement, and we also referenced the importance of trade union recognition. On those points, we are going to ensure that that transition and the significant economic opportunities are underpinned by a fair work approach, but we also have Adam Reid, who might want to come in, if you do not mind, on fair work, although he is unmuted. Cabinet Secretary, as you said, the plan is really clear about applying fair work and conditionality, including effective channels for worker voice. We will be taking that forward as part of delivery of the plan, and we can set out more details for the committee if that would be helpful. On renewable jobs, you said that we are leading the way, but your Government promised 130,000 renewable jobs by 2020. The ONS figures show that number is a sixth of that level and it is following. I am keen to know why we are leading the way if we are so far behind what your Government's target was for renewable jobs. It is a big concern around supply chain jobs for the trade unions. What is your new target for renewable jobs if the 130,000 target is so far off the mark in terms of delivery? Again, I was quoting two independent analysts. I would perhaps suggest— I suggest that, in terms of defending the Bank of Scotland and the Green Jobs Barometer that the PwC published, you can obviously consider those. In terms of green jobs, we are doing quite a lot of work internally in Government in terms of trying to measure green jobs because there are very narrow ways of measuring green jobs, but there are a lot of jobs that are being established and created in a number of different industries that you could classify very much as green jobs. For example, I most recently met a real estate organisation, a real estate business, which is one of the largest real estate businesses in the world. It can reference a number of jobs that have been created, including, as a result of work in Scotland, which are directly contributing to making non-domestic properties net zero. At the moment, jobs like that are probably not captured when it comes to being classified as a green job, but they are contributing to making the country as a whole net zero. Right now, our approach through this strategy is to say where are the challenges right now, let's meet them head on and let's ensure that we build a more robust supply chain. It would certainly take a leap to go from 20,500 to 130,000 just by changing the definition, but I would be keen in the future to hear what the Government's target is, however you define it. In the past, an issue that I have raised is around the cluttered landscape that businesses and organisations face when they are seeking support. It is an issue that was highlighted by Audit Scotland. You have changed the name of the enterprise and skills strategic board. You have now called it the SNAPI national strategy for economic transformation delivery and you are going to co-chair that. However, if I am at a business getting on with a day job, looking to see from all the various organisations where I am best placed to get support, how does this strategy make that less cluttered for those businesses? You are also not removing any of those organisations. What has changed from that very cluttered landscape that businesses keep referring to? Two things. Firstly, the access that businesses will have to support will change. Not only will it be more streamlined in terms of it needs to align with what our strategy says. For example, there will be changes to conditionality and to the things that we are focused on. There will be changes inevitably to the support that businesses receive. One point that I would make on the streamlining that is that, as soon as you stop anything, I can guarantee that whether Colin Smyth or somebody else will be posing questions to me as to why we have stopped certain schemes, certain initiatives and so on. Inevitably, one of the byproducts of streamlining is that you bring everything into one place and, by default, there might be things that have to change. If we believe in change, then hopefully that is something that Parliament can remember in the future when it comes to the schemes that are available and some of those schemes will either change or will have to adapt or will be no more because we have adapted our approach. The second thing is that there is obviously support that is provided by the enterprise agencies. It is not specifically grant support, it is not about accessing funding. Again, the enterprise agencies will be aligning all their activity to the actions that we have set out in the strategy. They will be aligning all their activity to the objectives in the strategy. It will be very clear to businesses what the enterprise agencies are doing, what they are seeking to achieve and the opportunities that come from that to get on board. Colin Smyth will be followed by Alexander Burnett. There has been some criticism that the strategy does not quantify the benefits that each project is expected to deliver and how that will link directly into the higher-level ambitions and the vision for the Scottish economy in 2032. How far will the delivery plans, which are being finalised within six months, go to flesh out the strategy? The delivery plans will definitely flesh out the strategy. As we have already said, we will ensure that there are clear metrics in that. We have set out on a high-level basis what we think the contribution will be to the Scottish economy over the next 10 years. However, as Gary Gillespie said just a few moments ago, there are some areas that are just by their nature more difficult to measure and to define, particularly the opportunities that come around with the new markets. We are still at a fairly early stage when it comes to doing that. There are some things that are easier to model, in other words, than others. However, there is certainly a grasp in the 130-page analytics paper of the overall contribution to the Scottish economy. There are areas that are easier to define than others. For example, when it comes to our export strategy, we will know what success looks like, when it comes to fair work, success will be building and conditionality. There are some things that are easier to quantify than others, other things that are more challenging, and we will set out the metrics in the implementation strategy. In the last year, I saw a figure for unemployment in Scotland being at 3.8 per cent. I seem to remember an economist somewhere saying that when you got to 3 per cent, you were effectively at full employment. We have significant labour shortages in certain areas, and we have the ambitions set out in the paper that we are looking at for the new startups, for expansion of IT capabilities, for increasing exports, all of which needs labour. To what extent is our inability to control our own borders in terms of immigration, have our own immigration policy, going to impact on this? Where are we going to find the labour that is going to carry out all those new strategies? The strategy is obviously unusual compared with other independent government strategies, because if you compare, and we did do some work, if you compare the strategy with pretty much any other international independent government, they have far more tools and levers at their disposal. Macro, fiscal, economic and monetary levers are all reserved. It is quite remarkable trying to build an economic strategy when, for example, you do not have any control over migration, or when you do not have control over the vast majority of tax powers, or over some regulation, or for example international trade. You are right in saying that our unemployment rate is 3.8 per cent. It is lower than the UK's unemployment rate. From that perspective, accessing additional labour is hugely challenging in a country that has always welcomed inward migration and which has a demographic outlook that indicates that we absolutely need to build and extend our working-age population. It is a huge challenge. One of the actions in the strategy is around talent attraction from the rest of the UK. Scotland has done very well when it comes to talent attraction from the rest of the UK to date. We just need to do even better, because right now our businesses, our industries, are crying out for labour. There is an acute labour shortage and yet we have no capacity to manage visas or to ensure that, once we have attracted individuals, there is an easy route for them to get here. You have highlighted a number of areas where there are constraints on what you can do because of reserved matters. Is there any prospect that, given the ambitions that we have, there might be areas where the UK Government might support those ambitions and the vision that we have here in Scotland? It is slim, but it is worth trying. It is very slim. If I go back a year ago or so to Mark Logan's review of the opportunities for the tech industry in Scotland, as an independent individual, not a politician, he set out clearly the need, for example, to have a tech visa. In my conversations with so many industries, they talk about the need of having industry-specific visas. That is not something that I can grant, but in the engagement with the UK Government, there has been no appetite or no willingness to consider sector-specific visa arrangements, for example for the tech industry or otherwise. Thus far, I do not think that there has been much if any progress, even in industries where it is an issue that is UK-wide. I do not think that we have seen huge progress. Right now, the reflection on the current discourse around refugees and migration suggests to me that we have a long way to go before making any progress. Alexander Burnett, to be followed by Fiona Hyslop. Thank you, convener. My question will be about measurement and labour, particularly the underrepresented groups that the cabinet secretary referred to earlier. I will first ask about comments in her opening statement. You talk about now seeing how important delivery is. Why was delivery not seen as important until now? In your answer to Jamie Halcro Johnston, you blame agency in the private sector for a lack of delivery. What responsibility lies with the Scottish Government for the lack of delivery over the last 14 years? I think that you would have to go to quite a stretch to suggest that I am blaming the private sector. That is quite a remarkable misrepresentation of my remarks. In terms of delivery, I am not saying that delivery has not been a focus. What I am saying in response to Jamie Halcro Johnston's question and indeed the convener's question about what is new is that our evidence suggested that we understand what the challenges are. The issue now is over a 10-year period ruthlessly focusing on delivering what we know are the solutions to those challenges. That is not going to grab any headlines, but we know what we need to do and we need to persevere in delivering that. There are new opportunities that have also emerged, not least in Alexander Burnett's part of the country. The question now is to ensure that we deliver on that supply chain, which is there but needs to grow and expand to meet the opportunities of Scotland. Quite clearly, when it comes to the supply chain, that is where we need to work with the private sector to maximise the opportunities. I move on to my Labour question. Unfortunately, we have a larger, economically inactive population in the UK average. I am not sure why. I do not know if the Cabinet Secretary has an opinion, but that is an historical point. More importantly, getting them in to work is particularly difficult, given the diversity of the group that you mentioned under represented groups in the economy. How do you intend to do it? What measurements will you be able to provide of the group? Most important, what of its subgroups? How will you be able to break down the larger groups so that we can see what is happening and how things are working or not working? The economic and activity figures, which are well documented in the analytics paper, are the most common reasons that are cited for economic activity in Scotland as temporary or long-term health problems in the workforce. We also have a big contingent that is in full-time study or has caring responsibilities. Understanding who that economic and activity phrase is a catch-all, but getting underneath it and understanding how we encourage those who can work in to work is important. The commitment in the strategy is to try and remove more of those barriers but also to simplify the employability system by implementing no one left behind. It is important to say that those who are furthest from the job market will require greater and more intensive investment to bring them closer to the job market. That is certainly a commitment that we are willing to make, but it requires significant upfront investment and a willingness to work intensively with individuals to bring them closer. We have set out that commitment. We need to do it quite clearly. The earlier question around the need to access skills demonstrates that we need to support as many people into work as possible. We need to understand what is preventing people from working. For some, it goes back to my earlier answer to Maggie Chapman about caring responsibilities. For others, it is full-time study, which is good. For others, it is ill health. There is quite a small group in all that that we need to work with to encourage them to work and provide the support that they need. The focus on transformation and change means that we want to do things differently. There is a focus on entrepreneurial aspects, as well as trying to be streamlined and focused on delivery. One of the areas in the entrepreneurship section is about expanding the text scalar model to all sectors. The text scalar model also comes with a cost. Therefore, if it is expanded to all sectors, that does not mean that it is not necessarily streamlined. It does not mean that it is focused, but it will have a cost, which means that other things may not happen unless you have got additional budget. Could you unpack some of that thinking for us? It is a great question. It is a theme that runs through all of our budget discussions when it comes to the economy. We have set out the fact that we believe that entrepreneurial people and culture are one of the key building blocks of economic transformation. Therefore, we will prioritise it when it comes to funding and expand it. We will also create pre-scalar hubs alongside the expansion of the text scalar programme so that we are engaging with potential high-growth businesses at a much earlier stage. That is an approach that we are committed to. We want to do in partnership with the private sector, too, so it will be something that we prioritise as we have already prioritised through the implementation of the Logan review. You are right. Inevitably that will mean that there are other things that we cannot do. I think that it goes back to Colin Smyth's point that when we stop doing certain things in order to focus on what we have set out in the strategy, there will be questions, but we have set out the blueprint here. That is what we want to deliver, and that is what we are focused on delivering. Rather than trying to do everything under the sun, let us focus on where we think that we are going to make the biggest impact and shift the dial, and that is what the strategy captures. I am sure that at some point the committee will have to think about what is not going to be done in order to focus on this. I move on now to resilience and supply chains. Clearly, this is a 10-year transformation strategy, but we already know that we are dealing and continue to deal with the consequences of Brexit, and we are still living through Brexit. We are still living through a pandemic. Indeed, we know with the international security issues in the war in Ukraine that that will have economic consequences globally. In terms of a resilient supply chain, that is more important than ever. You have focused your remarks clearly on Scotland and the new industries and developing industries and supply chain focus for them, but surely during those 10 years, it is important that our focus remains on resilience for red and butter, our foundational economy, as we have heard from Colin Smyth. Clearly, food and drink, our construction, our engineering and those areas. What in the strategy would enable Scotland to build a more resilient supply chain overall to help us to make sure that we have that kind of economic security apart from anything else? Yes, and there is specific reference, post-Covid, I guess, but specific reference to the need to build on resilience. In terms of the specific action, there is a commitment to expanding a programme that we already have, which you will probably be well versed in, but the supply chain development programme. That is about improving the capacity, the capability and the development of Scottish supply chains, including targeting, identifying Scottish companies with the skills, the capacity, the capability to bid for, to win and to deliver contracts in key industries. That is beyond just Scotland. That is about trying to identify those businesses very intentionally and working with them, basically to improve their resilience. Some of them may already be operating within key supply chains, others might not be and should be building their business more. It is a more intensive way of working in terms of identifying those businesses and then working with them, rather than just waiting for the supply chain to develop its own resilience. Although, after Covid, a lot of those supply chains are far more resilient than they were going into Covid because of the necessity of adapting. Just a question that was connected to that was about the export target that has been set by the plan. The target is to increase by 5 per cent to 25 per cent by 2030. As Fiona Hyslop has outlined, there are extreme pressures, whether it is Covid. We still have the hangover from Brexit, and now the war in Ukraine is putting pressure. Are you still confident of that target and how will the plan have to change in order to recognise the current situation that we are in? We are still focused on that target and we carefully monitor, as it were, the progress of the export strategy, which my colleague Ivan McKee leads on. In terms of the question around current impact on that, I do not have any of the panel, because Gary's team has been doing extensive work on monitoring the impact of the war in Europe on our trading arrangements, as well as on our resilience as an economy. I do not know if Gary Gillespie wants to make any comment on the impact, for example, on the export target. If Mr Gillespie could speak briefly, that would be helpful. Yes, just very briefly. I suppose that in the earlier point on resilience supply change, what we have seen since Covid, pre-Covid, was a change in how the global system works in a shortening of supply chains, resulting initially from Covid in China and that changing. What we are seeing with Ukraine and Russia is supply chains being impacted primarily through continued disruption through increased commodity prices, and that feeds through into producer input prices in Scotland. That impacts both the cost of doing business and the cost of living. We are also seeing through the monitoring of our exposure through the economic sanctions and restrictions. Essentially, the trading world has become smaller. In Scotland, we know exports around £245 million to Russia, about £50 million to Ukraine. Similarly, we import around £200 million from Russia and a lesser amount from Ukraine. The impacts of those, both on our key sectors and on parts of our economy, are relatively small in the scale of our impacts. Where our exports and imports have been more impacted has been through Covid and EU exit, both intertwining with supply chain issues that I have mentioned in terms of constraints. What you are seeing now is a greater focus on shorter supply chains. Resilience supply chain has been one of the top risks now for businesses, both within Scotland and the UK and within Europe, and investing in that supply chain and understanding that. That is a good example for Scotland, where we have a strong supply chain in Scotland that is built on a lot of the natural capital that exists. That industry, in particular, is keen in understanding how resilient it is in terms of its exports and how that feeds through in that context. In terms of the export challenge, what we know from the current situation is that the impact of Ukraine-Russia is expected to slow global growth this year. It will have an impact on trade estimates around 1 per cent fall in global growth. It will also potentially increase inflationary pressures at a global level from up to 23 per cent, which will again impact domestic production through squeezing both the cost of inputs and the cost of goods for consumers. It is a negative immediate shock, but the global economy has had a number of those shocks over recent years, and it will come back. Jamie Halcro, do you wish to ask a further question? I have a very brief question on that. On the supply chain side, it has been reported that the former transport minister said that it could be £1.5 billion needed for replacement ferries. Obviously, that could be a real opportunity for a shipbuilding, but we have seen ferries in that contract going to Turkey, so you are very well aware. How can that strategy help to support our shipbuilding sector? How can it ensure that CMAL is looking at yards, not just publicly owned or government-owned yards, but other yards and making sure that procurement processes work for them? How can that strategy work with the UK Government's refreshed shipbuilding strategy? I have been engaging with the UK Government's refreshed shipbuilding strategy in particular because of the opportunities that we know and the opportunities here in Scotland. We also recognise that, from a procurement perspective, that is one of the most powerful arms that we have as a public sector, as a Government, at a time when public finances are not plentiful as the chancellor titans the purse strings post Covid. Procurement is a significant opportunity. Quite clearly, when it comes to ferries, there will be opportunities within Scotland, with Scotland in developing those links, but, long story short, procurement is a key arm. It is an area that we reference alongside our spending power to create new opportunities for Scotland. It goes right to the heart of developing a supply chain because under project 6, which is around the development of the Scottish supply chains in the strategy, we specifically talk about our strategic approach to public ownership so that public companies are being managed, they are being developed and they are being initiated for the public good. That goes probably to the issue that you are referencing. I will bring Michelle Thomson in for a closing question. Thank you very much. I was very interested in what yourself and Gary were saying in terms of export and particularly the evidence of impact still to emerge. Perhaps inadvertently, Gary gave a very good explanation of and reminded why proximity in terms of trade is so utterly vital. I understand that the global impacts of the geopolitics that are going on will fold out, but in terms of proximity impacts, i.e., are trade with Europe, have you got any more sense of the additional costs incurred by Brexit and how that will impact on developing those resilience in supply chains in numerical terms? Obviously, Brexit is still on-going, if you like, and that is an important area when we link it to proximity. Have you got any further reflections on that? Thanks. It is certainly a prime Gary Gillespie to say if he wants to come in with additional analysis on the additional costs. Certainly, the anecdotal feedback from businesses, particularly smaller businesses, is that the higher costs, increased levels of bureaucracy, have had an impact on trade. I think that it seems to be disproportionately affecting perhaps some of the smaller SMEs who had previously been able to trade in and of themselves. Some of the larger businesses are able to access these markets more easily, but it has increased costs. If you go back to the questions around productivity and how we improve our productivity as an economy, one of the most significant opportunities is through increased exports. That is why our export plan is so important, and that is why that target of 25 per cent is so important. Any additional cost when it comes to accessing one of the largest trading blocks in the world obviously does not help with that. However, Gary Gillespie might have some analysis on EU exit. Thank you very much, cabinet secretary. We are looking at the analysis to try and disentangle the impacts of EU exit alongside Covid, so we are trying to break out how Covid and EU exit have impacted in Scotland's trade figures. From the initial modelling, the way that we do that is a technical synthetic control. We look at a peer group of similar-sized countries and model their impact on Covid, and then look at how they have responded relative to Scotland. We pick up from the initial workers an additional impact and additional negative impact on trade for Scotland over and above what should have been the case primarily from Covid. That is the work that we are doing internally, and I am happy to share that work with the committee in due course once we finalise that and share more widely. I think that the framing out of this has been very brave to do a 10-year macro strategy like that. I regard it as a framework strategy, and I have read the 118 pages of analysis underneath it. In terms of other important areas, the section around which is of personal interest to me are financial services in ffintech sectors, including Scotland's leading positions in responsible and ethical finance. I am on the record for being fairly active in this area and highlighting where lax governance has allowed for pretty extensive corruption in the UK, and very conservative figures put that at £290 billion each and every year, or 15 per cent of UK GDP, which is utterly shocking. My concern is that the potential impact that it has on Scotland's brand that is viewed as very trustworthy for Scots to do business in the world and for the country itself. I wondered what, if you would manage to give any specific consideration to that and therefore how you would heighten Scotland's brand to permeate through some of the issues around global corruption. Obviously, I am relating to the city of London. Are you able to give any further reflections on that? This is a big focus. It is identified in the strategy as one of our strengths. It is identified in the strategy as one of the areas of greatest growth. We already know that in Scotland we have more assets under management that are defined as ethical, for example, compared with our share of the proportional market. There has already been a disproportionate growth when it comes to that ethical financing piece. There is a huge opportunity to position Scotland's brand as distinctive from the rest of the UK, largely because we have a well-known, well-regarded financial services industry here in Scotland and because on our doorstep we have significant opportunities to connect what our financial services are doing with our natural assets, for example. I go back to that point around the significant opportunities around our natural assets. We have just launched the Global and Ethical Finance initiative. That was launched just a bit a fortnight ago and launched with none other than Mark Carney. Mark Carney was the keynote speaker. He shared a panel with me. This is firmly on his radar. He is conscious of the work that we are doing. We had a lot of interest from across the world in that launch and on what we are trying to achieve. Initiatives like that set Scotland apart in terms of what we are trying to do. Of course, what we want to do is build on the legacy of COP26 particularly. On your question around branding, I think that we have set out a plan here through the Global Ethical Finance initiative. We are working on it and we are keen to position Scotland as the home of ethical finance. Thank you very much for attending this morning with your officials. I will now briefly suspend the meeting while we change over the panel. To my business this morning, I have an evidence session with the Scottish National Investment Bank. I welcome Willie Watt, a chair who is joined by Caroline Jameson from the Scottish National Investment Bank. I also welcome Liz Smith, who has requested to attend this session. As always, I ask members and witnesses to keep answers short and concise. I invite Mr Watt to make an opening statement. Thank you, convener. I also have a slight problem, which is that I can either see all of you or my notes. While I read my opening statement, I will concentrate on the notes. Thank you for agreeing to our request to provide evidence to the committee, which I very much appreciate and welcome. Indeed, I hope that this is the first of many interactions with this committee. I am pleased to be here to speak about the work of the bank and the progress that we have made since our launch at the end of November 2020. Caroline and I will be happy to take questions on the work of the bank. Caroline has joined me in her capacity as a member of the bank's board and as a member of its remuneration and nominations committee. The end of my introductory comments, Caroline will introduce herself. I am sure that we will touch on many areas today, including our investments and the on-going work to establish the bank. In that regard, I thought to set out a short update for the committee. Since the bank's launch in November 2020, we have concluded 13 investments totaling £191 million of committed capital. We have a strong pipeline and are currently considering 50 opportunities that are spread across all of the missions and also a wide geographical area. Those investments speak to all three of the bank's missions and are divided across direct investments in SMEs, project finance and investments in externally managed funds. Just to recap the missions that are set by Scottish ministers supporting Scotland's transition to net zero, our net zero mission, investing to improve opportunities for people and communities, our place mission and harnessing the future of technology and innovation to build a more resilient productive economy, our people mission. I am proud of the progress that we have made in developing the bank's investment portfolio while building up the operational capacity of the bank. The investments will deliver mission impacts across Scotland and form a strong basis for the bank to operate as a key pillar in the Scottish economy. As well as concluding investments, we have substantially grown our organisational capacity since launch. We are now at a fully functioning organisation with capacity and capability in all aspects of our business, one that is well placed to continue the bank's journey as it becomes a key pillar in the Scottish economy and broader civic society. At the point of launch, the bank had a skeleton team predominantly recruited on an interim basis or seconded from the Scottish Government. Over the past 16 months, we have recruited a permanent team that combines both private and public sector expertise. The total headcount now is 62. We have created a professional investment process in line with development bank and private sector impact investment best practice. In the time since launch, we have been working hard to establish ourselves in the economic and investment ecosystem in Scotland. We have made significant progress in building relationships across the public and private sector, but there is still much that we can do in both of those areas. That is something that we could come on to later. Moving on to the recent resignation of Ailey MacTagger, I am fully aware that Ailey's resignation will be of interest to the committee and, no doubt, will be the process for recruiting her successor. As we outlined in the bank's public statement on the matter, Ailey made the decision to resign from her position as CEO at the bank for personal reasons. She resigned on 27 January. Ailey made a statement on 5 March confirming that she stepped down for personal reasons. The board respected her decision and we are grateful to Ailey for the contribution that she has made to the establishment of the bank. Many of the features that I highlighted in my introduction at Ailey were significantly involved in those achievements. We have not shared further details. As an employer, we respect Ailey's decision and her request for privacy. As you will be aware, Ailey highlighted in her announcement that she would like to spend more time with her young family and she will then go on to consider future opportunities as and when she feels that that is appropriate. We have a duty of care to all our employees, past and current, and our policy is not to divulge information on confidential and personal employee matters. That is not just in relation to Ailey. We are entirely respectful of the fact that team members have the right to privacy and that as an employer individuals place their trust in us that we will not and do not comment on issues of personal, confidential or private matters. That is a principle that we take seriously. We have confirmed that Sarah Ruffhead is now acting as CEO, which will ensure that the bank continues to run as usual until the appointment of a permanent successor. Sarah Ruffhead is doing an excellent job and, as our CFO, she was already involved in all aspects of our business. We have a really good team in place, along with robust governance and processes supported by a strong board, so we believe that we are on the front foot going forward. I will stop there and, before questions, if I can hand over to Caroline to introduce herself. Thanks, Willie. Good morning, everyone. Thank you for having me here. Just by way of introduction, as Willie said, I am on the board at the National Investment Bank and, as part of that, I also have a role on the REM committee and on the risk committee. Then, in my day job, if you like, I am the chief trust officer at Trustpilot and, prior to that, I spent many years on the executive team at Skyscanner, and I then posted the sale of Skyscanner, which worked for C-Trip in an MNA capacity as their head of MNA. That is a little bit of background on me, so that you are aware. Thank you, Ms Jameson and Mr Watt, and welcome to the committee this morning. Mr Watt, as you have said in your statement, there is a recent resignation issue that I am sure members of the committee and some members have watched to ask about. I do understand your role as employer and you have set out clearly the parameters in which you wish to discuss this issue. First, I will ask you some questions about timescales. It would be interesting when you, as the chair, were notified of the decision of the chief executive to design, and when the board was informed and then when the shareholder, which is the Scottish Government, at what stage they were informed? Aileen resigned to Willie on 27 January. The shareholder was made aware on 31 January, which was also the day that the board was made aware of it. Mr Watt, was the chair at the same time as the board? I was made aware on 27 January. I will now hand over to the deputy convener. On the question of a new chief executive, are you confident that you will have a new chief executive in place at the start of the financial year? No. To be totally honest with you, I think that it will take some time to recruit the right person. We will need to make sure that we have a broad funnel to attract a wide range of potential candidates, and then we will want to go through a very diligent process to make sure that we recruit the right person. We have already started that process now, but that will take probably until the second half of this year, potentially the end of the second half of this year, before we have someone in place. That does not overly concern me because I am very confident in Sarah's role as acting CEO and the fact that we have a strong team around her. As a matter of interest, will the recruitment process include the use of headhunters? We will use external search consultants that will enable us to broaden the troll across a much wider range than just advertising. It will also allow us to target individuals who might have very specific experience. For example, in other development banks, that would be difficult for us to do if we put an advert up in LinkedIn or something like that. I suppose that, arising from that, there is a certain interest in what the cost of the recruitment would be. Yes. We will identify a set of firms that we feel have the right professional capabilities. I think that everyone in this committee would agree that it is an extremely important role and that we have to make the absolute right choice. We will select a potential group of search firms that we think have the capability. We will then seek proposals from them and we will evaluate them on a combination of cost and capability. Value for money will certainly be a very important criteria for that selection. Because the chief executive left with immediate effect, what impact there has been on the bank? You seem to suggest that there has been no impact, but it would usually be a post where there would be a handover period and a period of time. You would know in advance that someone is about to leave. What has the impact been on the bank with an immediate resignation? The bank has actually coped remarkably well. Ailey had built a very strong high-quality team and they were left to pick up the reins. They have done so very well. As a board, we have been very pleased by what we have seen. As a board, we have been providing additional support and spending time in the bank as well. Thanks very much. Good morning to you both. I have a number of questions relating to this, so I am very happy for one word that answers all can't say. As a first question to you, did the chief executive of the resignation come as a surprise to you? Yes, I think that it would be true to say that that was the case. Were there any efforts by yourself or instructions from the board perhaps to see if there was any way that the chief executive could stay on, perhaps looking at circumstances? I think that Ailey resigned for personal reasons. I think that that was the position that the board took was that she was entirely in our rights to do that and we respected that decision. So you were comfortable that it was a personal reason? There was nothing in terms of relating to the work or relationships with the board? No, she resigned for personal reasons. Okay. This again may be an area where you're not able to comment, so I'm comfortable, I suppose, with that. She resigned, you said, on the 27th. Was there any enhanced severance package or anything like that that was made available? I'll answer that, and the answer is no. Ailey, there was no severance package at all related to this. Okay, and there is no, I'm just trying to think of a non-disclosure agreement or gagging order or anything like that, so she'd be quite available to speak. Just kind of moving on a little bit to, in terms of you, I think that you said the Scottish Government were made available on the 31st. How was that done? A telephone call to the relevant civil servant to make them available, and was there any inquiry from them in terms of the nature or was it simply that the chief executive had stepped down? Obviously, this is four days later. I'm not sure exactly what days of the week those are. It's Thursday and Monday. There was no inquiry from the Scottish Government about the reasons behind it? We had a conversation, and I relayed Ailey's reasons to the individual. I think that the timeline that you gave us, the chief executive spoke about the step down on the 27th. It wasn't until the 5th of March that a statement was made. I think that your argument would be that this was a personal issue, but that's quite a long time for a formal response to come. Was the bank or are you aware of whether the Scottish Government or any of its agencies involved in encouraging the chief executive to come out with something? Obviously, both the cabinet secretary and the First Minister had made the point that you're making now that it was personal reasons, but that hadn't officially been said. It was a kind of suggestion that those are the reasons. Do you know why that statement was made and why it was made so late, and whether there was any encouragement to make that statement? There was no encouragement to make that statement, and Ailey had requested privacy. She'd resigned for personal reasons, as we said, and requested some privacy. She then got in touch and said that she would make that statement. I knew in advance that she was feeling uncomfortable about the scrutiny that she was seeing and the discussions that were taking place. She made the decision independently to make that statement. That was her choice to make, and she was able to do that. Can I just ask—obviously, in the conversations that were going on, I think that we've been touched on the new chief executive—what role will that take in terms of involvement of Scottish Government or Scottish Government agencies, or is that just a matter for yourselves? It's a matter for the board. The recruitment process and selection is a matter for the board of the bank. The final decision to appoint is a matter for Scottish ministers. The cabinet secretary will have to be happy with the appointment, and our job as a board is to bring the best candidate that we can find for the role to the cabinet secretary. We will be running the process. We will take into account best practice for public bodies in that regard. We will seek to apply the bank's quality and diversity parameters to make sure that we do that in the right way, but it's a board matter. The final choice of the board will be put before the cabinet secretary when there will be a number of options? No, I think that we would not be doing our job if we came up with two or three options. I think that it's our job to make a decision. Of course, the cabinet secretary can decide not to confirm that individual, but I would hope that she would trust our judgment. You've not had any direction in terms of none whatsoever. So it will be your process and then that person's. Correct. I'm conscious of time, so I'll come on. Thank you. We are sent to repeat some of the questions that were asked by Mr Beattie. I'll go back to Mr Beattie here. Are there a couple of questions he would like to ask on broader issues? Yes, moving with something a little less sensitive, I realise that in terms of investment, these are early days yet to be able to judge the success or failure of the investments, but I'm going to ask you just the same. You indicated that you're 191 million invested into 13 projects of companies. How are the opportunities identified and what selection criteria was used in the decision to invest? The first thing to say is that there was a sort of pent-up demand because obviously the investment bank hadn't existed previously and the things that it was doing were different from enterprise agencies and other elements of the public infrastructure. So there's a lot of inbound demand. We are very open to people coming to us with opportunities. We also get referrals from the enterprise agencies—that's an important part of where things come to us from—and the private sector and their advisers who are seeking to raise project finance or finance for SMEs. Those have been the prime basis for where opportunities have come from. Going forward, we want to make what we call outbound origination more prevalent rather than inbound, and that means taking the missions and then going out and seeking opportunities that we feel fit with those missions. For example, an area that we've identified is the decarbonisation of heat. It's a massive problem for us in Scotland. It's hugely expensive. It will require a lot of private sector capital. Having said all that, we need to then start to target projects and companies that we think can contribute to that and go out and engage with them directly. We want to do more of that in year 2 of the bank's existence than in year 1. In terms of how we assess opportunities, we start with a mission fit. An opportunity comes to us and we say, does it fit with one of the three missions? Sometimes it fits with all three, sometimes it fits with two, but it has to fit with at least one. Does it fit with the missions? What kind of impacts to the mission objectives will it make? The second criteria is, is there a commercial investment opportunity here that makes sense for the bank? The bank is not giving out grants. The bank is not making sub-commercial investments. It is making investments where we expect to get our money back and make a positive return, which will go into the bank's coffers for reinvestment. The third element is our state aid compliance. We cannot crowd out the private sector, we have no wish to do that, so if the private sector can or should or wants to do something, we will step back. I like to see it as three rings where there are missions, there is commerciality and there is state aid. Our landing area is in the centre of those three rings. We are in that overlap space, so every project that we do needs to be in that overlap space. I am not going to ask you to comment on individual projects or investments that have been made, but looking at the figures that I have here, I cannot quite work out how much of the investments are into equity investment into the business and how much is alone. Of course, the intention was always that the bank would provide patient capital. Yes, and the loan investments tend to be very long-term, so they are very much in the patient capital space, and that will continue. We do do some lending on what one might call project finance, where there is an element of getting a project off the ground that the private sector will or cannot provide. Some of those loans can be on a shorter term, but our equity investments are all on a long-term basis. One of the things that we are passionate about is the scaling up of Scottish businesses. A lot of work has been done by Scottish Enterprise, the enterprise agencies, in terms of the business birth rate and early stage investment, but what we need more of in Scotland is that scaling up of businesses—Carlin's previous company, Sky Scanner, was a great example of a business that was a start-up that then scaled up to employ hundreds of people and create a huge amount of value for the Scottish economy. Scaling up is important, and scaling up is a long-term process, so I would envisage us making multiple investments over a period of three, five or ten years in some of those companies as they get bigger. Another issue that the committee will no doubt be concerned about is productivity. Scaling up companies make a much bigger impact on productivity because they create more better-quality jobs, more tax-paid, more efficient and have greater reach within the economy. That is very much a patient capital. To finish on your question, the numbers on the loans on project finance tend to be quite big. We put £30 million into helping to complete the new Aberdeen harbour development. The investments in equity tend to be smaller between £1 million and £15 million, but there are more of them, whereas there are fewer of those big project finance loans. Let me ask one last question, which is about the performance of the investments. Obviously, as I said at the outset, it is fairly early days for that, but nevertheless, are there any of those investments that you feel are not performing in the early days? How are you measuring success? Is it profitability, jobs, turnover? At the moment, we feel confident on the performance of all the investments that we have made, but they are recent, and I guess one would expect that to be the case. We will not be doing our job if every investment that we make performs because we need to take higher risks than the private sector, so we will have losses. Some of the projects in which we invest will not work. A private sector investment will have losses, so we will have losses, and we ought to have more losses than the private sector. There will be, and I know that I will be coming to this committee to talk about investments that do not work over time. However, as we stand at the moment, I am very comfortable with the positioning of the portfolio. In terms of how we measure success, we measure it across a number of measures that are tailored to a particular investment. On project finance, it is the project on time and on budget, which is very important. On the missions, we put mission covenants into our investments. Whether it is net zero or place, there will be a commitment from the company to do certain things that relate to the missions, not to the commerciality of the investment. We measure those on a twice-yearly basis. Jobs-created, revenue-generated and profitability are also important measures. There will be a suite of measures for each company. As the portfolio evolves, we will publish the sum total of all that in our mission report and in the way that we report on the performance of the portfolio from a financial perspective, as well as a mission perspective. Good morning. You have already talked about the importance of the bank, not crowding out private finance, and the role of the bank is to invest where the private sector is failing to provide sufficient finance. How can the bank be sure that it is investing in a company or a project that would not get private investment anyway? Perhaps you can give us an indication of where you think that there is greater appetite from the private sector to invest and where there is lesser appetite in the areas that you might look to target within your Venn diagram. We have a subsidy control team that operates separately from the investment team, so that there is no pressure on them. They look at every opportunity with that lens. We seek written proof from companies that they have tried to raise private finance for this particular component and they have not been able to achieve that. We also benchmark that with other banks and investment institutions that we think that they might have spoken to, so that we reference it, and then we apply the framework of our state aid approval and compare where that company is with the state aid approval framework that came down to us from the European Union before we left. There is a separate, auditable thread that runs through all the subsidy control and state aid side of it. We have debates at our investment committee and members of our investment team will talk about whether it is commercial or if there is somebody out there who would do this. It is something that we talk about a lot. In terms of where the gaps are, it is an evolving picture. I think that in this scale-up space there is a reasonable amount of capital available at the early stage. In later stages, I think that the private sector is certainly capable of financing that scale-up, but there is a bit in the middle where there may be a role for the bank. In technical terms, the scale-up capital is the thing called series A. There is start-up, there is series A and then there is what is known as series B. The gap between series A and series B is a place where I can see the bank helping companies to achieve the milestones that they will then need to be able to raise the next set of capital totally in the private sector. In projects, the private sector will finance most projects without any need for bank capital. We find that if the project is very innovative or it is in an unproven technology, maybe only 70 or 80 per cent of the financing is available from the private sector, there is a need for an element of that that we can provide. We are providing either a foundational that enables the thing to get going. The first million pounds is often the hardest, so we can provide that. The other way to look at it is that when most of the investment is available but there is a gap, we can provide the keystone capital that makes the arch stand up, so it is the piece that holds the other pieces of the investment structure together. Those are some of the areas in which we have found ourselves. I also want to ask if there is any evidence—I know that it is early days—that the bank is attracting domestic and international private investment into Scotland by the sheer existence of a development bank and can provide a mission led. Obviously, it is attracting interest, but does that give confidence from outside investors that there is something interesting going on here that we want to be a part of? I think so, and I think that it is early days. I think that there are projects that would not have got off the ground without our involvement. The world of investment is global and capital is easily moved around. I think that it is important that we highlight the kind of projects that we think are investable. It is really the reason why it is important that we have a professional investment capability. If we do not have that, we cannot demonstrate a level of professionalism that will attract private sector investors. I am often asked about whether there is too much of an investment focus on your team. However, if we do not do that, we cannot crowd in, and the whole reason for the bank is to be a catalyst for the creation of more investment in Scotland, more than the £200 million a year that the Scottish Government has allocated to us. I think that what we can do more of in the future is being a kind of champion for Scotland of what is available here. I think that there are good examples of development banks around the world that are very good at that. When you become more trusted and we need to earn the right to be trusted, we are just new. People are not going to trust us just because we say, please do that. We need to earn the right, and if we make good investments and if we demonstrate thoughtfulness and professionalism, I would like to see us become that kind of trusted partner that will help to bring in external capital. Thank you for joining us today and for expressing your willingness to come back to us. I appreciate that, and I know that others on the committee would appreciate regular engagement with you. I am interested in exploring the challenges that you faced in meeting the strategic objectives. I also appreciate that it is early days, so there is going to be a limit to exactly the life of some of those projects and challenges. What is it that you need to overcome those challenges? I suppose that it is linked to that, although it is slightly separate. Given the overarching purpose of the bank and very closely linked to those strategic objectives, there are clearly very good examples of sustainable development offered by the bank, but probably all of those projects, some maybe more notably than others, could have negative social and or environmental consequences. Do you, in your longer-term thinking of the life cycle of a project and the consequences thereafter around circular economy spin-offs or building in the initial aims across the full-life term of the project? Those are very good points and they are the right things to think about. Maybe if I start at the end and go back to the beginning. I think that we try not to invest in projects where we see disbenefits, if you want to call it that, in relation to the missions. However, if you are going to renovate a hotel in the Highlands or pour concrete into a harbour in Aberdeen that is going to be a centre for offshore wind, then, in a sense, you are having a negative environmental impact. Intellectually, it is about the balance between positive and negative impacts, and the balance needs to be skewed dramatically towards the positive. It cannot just be a fine balance, because, to your point, we would not then be investing to the purpose if that balance is a fine balance. I think that we could be better at explaining our thinking in some of the investments that we have made. I think that maybe we were a bit naive about the need for the detailed level of explanation that might be behind your question. I think that, in future, you will see a lot more of the detailed thinking being made public about why that investment has been made and how we went through the thinking across some of those issues. I also think, being honest with you, that we are still learning. I guess that we are all learning, aren't we, because there are unintended consequences of most types of activity. That is certainly true about investment activity. We need to make sure that we are being really thoughtful about that, but I think that a combination of those things should, and we also need to take part in the debate and help to shape that debate. That is how I would characterise the second part of your question. In terms of the first part of your question, there are lots of challenges around linking investment activity to the missions in the right way, avoiding the problems of competing with the private sector, while investing in projects that are viable. That is why, in the future, we want to do more of our own origination and be in more of an outreach mode than in a kind of—we get so many inquiries that it would be quite easy just to deal with the inquiries that we get, but I think that the more thoughtful we can become about how investment can help to solve the problems that underlie the missions, we then need to go out and find things more positively. I think that if I was sitting here in a year's time having this conversation, I would like to be able to give you more evidence of where we have done that. No, no, that is really helpful. I think that that is why I linked those two points, because I think that there is something around being able to see the connections of, potentially, some negative or detrimental consequences, but supporting those who can mitigate those and think of that circular economy in a way that we have not seen in this kind of strategic investment before. I look forward to your update next year. Good morning. Thank you very much for attending today. I just wanted to pick up on an earlier point that you referenced, Willie, and then moved on, which was around subsidies. I note that, in your submission to this committee, you commented on the UK subsidy control regime and noted that, at this point in time, there is not really any clarity. Having followed it up, I understand that there are some principles that may ultimately rely on legal challenges leading to precedent, which seems to me a very clumsy way of doing things. What I wanted to check with you was, two questions, have you had any further insights that we might not be aware of, and two, what the impact of this approach may have on your investments? Yes, it is a very interesting area for us, as you can imagine. I suppose that our approach to it is to say, what do we know? We know what our state aid approvals were within the context of European Union membership. The principles on which those were founded were sound. We also feel that they allow us to do pretty much everything that we want to do. That is, for us, foundational. I guess that it is not unreasonable that there should be a period of uncertainty around what the UK Government state aid position will ultimately be. I suppose that the Government in Westminster left the European Union in part so that it could have more flexibility around things such as state aid. I do not anticipate that the state aid—I could be completely wrong here—landing zone in a UK context will be more problematic for the bank than the current state aid position. However, in this period of uncertainty, we just stick with what we know. I think that that is UK Government guidance as well, so I do not think that we are doing anything that would be out of the ordinary within a broader context. I think that all of us would like to have more clarity on that, but it is not something that we can directly influence. Following up on another thing, we touched earlier on risk relative to innovation, which is one of your guiding mantras. It almost seems counterintuitive that, at the moment, state flocks the geopolitics that the requirement for more innovation is met zero, of course. How confident are you that you have landed it just right in the current climate? If you only ever invested in Government bonds, you would always get a guaranteed return. There is a sweet spot, which I regard as quite challenging given the nature of how you are set up and structured. Not everybody necessarily understands what that translates into in terms of risk appetite, and it is not all that common for parliamentarians to understand about risk appetite. Do you have any further reflections at the moment in the light of geopolitics? I think that it is a fluid—there is not one answer for a significant amount of time, because risk appetite in the private sector flows in and out. There will be periods when there are projects that we might look at where there will be no requirement for the bank to act because the private sector's risk appetite will be higher, and there will be periods when the private sector's risk appetite is lower, when we will be active in a particular space, but that might last for a few years. It is a fluid situation, and it is something that we think about literally every day. It is a matter of judgment, and it will need to evolve over time. We will need to look at the investments that we make and assess those against that risk appetite framework and decide whether we have been too conservative or too liberal with our risk budget. However, in relation to the geopolitical times, it is interesting that, in many respects, the drivers—I think that the missions are quite well thought through. I claim no authorship of the missions, but I think that they are well thought through because they speak to fundamental issues in our economy. They also speak to issues that are highlighted by the geopolitical uncertainty that we have. The importance of the move to net zero is highlighted by the volatility in energy prices that we are currently seeing. That has a knock-on effect on poverty and our place mission, because the poorest in our society are least able to deal with that volatility in energy costs. The need to have an innovative, vibrant business community that creates jobs is really important. The digital world and innovative companies tend to perform best in difficult times. They are more resilient to difficult periods. I would expect a lot of the digital businesses that we back to continue to drive forward even despite all that. We need to take all those things into account. However, overall, it underscores the importance of the missions and the need to make progress on them. On the issue of the role of the bank in investing where the private sector is failing to provide sufficient funds, your biggest investment is £50 million. A forestry fund that is run by asset managers Gratiam House, a firm that I have to say admitted owning a management company in Guernsey, which is a well-known tax haven. Forestry is not short of people queuing up to invest, so where did you see that particular market failure that you needed to fill? I noticed on the sustainable forestry fund website that it highlights that this is going to create rural jobs. How many jobs have been created so far from that investment? I could not tell you how many jobs have been created so far. It is very early days for that. I think that from memory, the number of 200 jobs has been mentioned in the past over a broader period. The market failure there was that you are absolutely right to say that forestry is normally invested in the private sector perfectly capable. The problem with this fund is that it had a much higher percentage of new planting and a higher percentage of native species than historically had been the case. The investment manager's thesis was that in a period when natural environment regeneration and the planting of trees was becoming more prevalent, there would be demand for a fund that was, as you know it, the title of the fund explains—I am just trying to find my notes—but the title of the fund being based on sustainability, they felt, was likely to be attractive to investors because sustainability is very much what we all should be doing, but they could not find a cornerstone investor to get the fund up and running. Without that, there was no way that they could then raise the rest of the money. The bank's role was to be that cornerstone. As I was saying earlier on, the first money is often the hardest. There is a bit of a misconception as to where the capital for the fund comes from. Most of the fund's capital has come from public sector organisations. The second largest investor in the fund is a local authority pension scheme, whose members are local authority workers across all factors. The third largest investor in the scheme is a state-run pension scheme. It is institutional responsible capital that is investing in very long term basis to create more forested land in the UK and Scotland. Even since you made that investment, the market has changed significantly. What you know have is a lot of private companies who, if they are being perfectly honest, want to buy up huge swathes of Scotland to plant trees, including the native species, it is not about commercial planting, it is about offsetting their carbon footprint. We see what those companies are, so given the fact that the market is changing, what mechanisms do you have in place that say that you no longer need to have a role there because the private sector, green layers and all sorts of interests of organisations are moving in there to buy up land for tree planting? What mechanisms have you got to say that we do not need to be there anymore because the private sector is filling that gap rightly or wrongly? It goes back to Ms Hyslop's question earlier on. We look at every opportunity with regard to whether there is a market failure or not, and we assess each opportunity on its merits. It may well be that we do not do another fund like that for the reasons that you mentioned. You do not have a mechanism that says that we do not need to put that money there, somebody else will fill that gap? No, because at the time when we invested in the fund, there was a gap and we identified that gap and we felt that it was right to fill it. We very much believe in planting more trees in Scotland. I would say that the scale of the requirement if we are to get to net zero by 2045 is huge. It is many, many, many billions of pounds. That relates to the forestry sector, to the decarbonisation of housing, to the decarbonisation of transport. The fact that two or three companies have invested in some forestry since we made this investment does not mean that we have got to the end of what is required in terms of tree planting in Scotland. Scotland in the UK has some of the lowest tree cover of any European country. You have got it somewhere like France or Switzerland and there is far, far greater forest cover. We really need to think about that. There is a role for the private sector, there is a role for the third sector and there is a role for the public sector in that, and I think that it is all around balance. Sticking with that key role of achieving a just transition to net zero and that being one of your main missions, the Government has a fund to support community and commercial renewable energy projects called the energy investment fund. Is that a fund that you are familiar with? I mean, yes, we know about that fund and I think that it has a very important role to play. Important role to play, but the Government is ending that fund at the end of the month, which is £13 million a year over the last 10 years. Obviously, when that fund was set up, they identified a market failure. In response to a parliamentary question, they actually say, one of the reasons they are ending that fund is that there are new investment mechanisms in place through the Scottish National Investment Bank, which supports the Government's strategic priorities to achieving our net zero ambition. Given that that £30 million a year fund, which largely goes on, community renewables, is being ended in a few weeks' time, what is it the bank are doing to support community renewables? Certainly, community renewables would be within the scope of what we could invest in, and we would apply exactly the same metrics that I explained earlier on in terms of does it meet subsidy control, is there a good opportunity to get our money back, and does it meet with the missions? Now, clearly, it meets with the missions because it is about renewables. We certainly support community-based investing, and we would certainly look at projects. We have a minimum project size of £1 million, so we would need to meet that minimum approach, but there is no reason why we cannot look at community-based renewables. Something that you are investing in at the moment. The concern is that the Government have effectively said that the fund is ending and that it has landed on your desk in a few weeks' time, but presumably you do not have plans to invest £13 million a year in community and commercial renewables over the next year, so there is obviously a gap there. I do not know whether there is a gap. The way that we work, you would need to speak to the Government about what it means around the cessation of that fund. What we will do is, if people have projects that they want to come and talk to us about, we are very happy to talk to them. I do not know whether that means that there is £2 million of demand or £20 million of demand in community and renewables, but we are certainly open for business with regard to community projects. That is an important point. Gordon MacDonald is before by Alexander Burnett. I want to ask you about the bank's mission statement to address innovation. You have already talked about the need to improve productivity. How does the bank assess investment opportunities in terms of innovation, and what weight is given to that in terms of how it would improve productivity? That is a very good question in the sense of—essentially, when we think about innovation, we are usually thinking about doing things differently in the digital world or in the world of physical products. We are thinking about companies that are breaking the mold, as they were, with regard to technology and software, as well as hardware. Part of that is to analyse the feasibility of those businesses. The early stage investment is primarily the home of Scottish Enterprise and the Enterprise agencies, but we are investing at an early stage in innovation. It is about how practical is what the company is doing. It is then around the path to revenue growth. The annualised revenue from an innovative company is seen as an important measure of its viability, more than the profitability. Many of those innovative companies are not profitable or they are marginally profitable because they are investing as much as they can in terms of innovation. There is a measure called economic value add, which really tries to translate the value of innovation into pounds, shillings and pens. That is quite a good measure, because, although it is important that we have more early stage companies, if all they do are things that are already done well by existing companies, they are probably not dealing with that productivity gap. The viability and growth rate of those companies in terms of product and revenue is really important, and that will be associated with job growth. I have been in the investment world for nearly 40 years, and in my early days, most people in a company were employed by that company. Most companies did pretty much everything in-house. That is not the case anymore. When you think about the jobs that are created by an innovative company, there will be all the jobs in-house, which will grow, but there will be all those partnership relationships that they have with companies and individuals who are in Scotland, in the UK and also more broadly across Europe. We need to think about that ecosystem that surrounds each company. Then I go back to this ability to scale, because we are doing this so that these companies can get bigger and make more of an impact, which is just more of everything. We need to figure out how we articulate all of that in the way that we communicate with the outside world. We talked a bit about that with regard to the green space, but there is also the innovation space. We are talking to people like the Hunter Foundation and other entrepreneurs who have been thoughtful about the whole space, so that we can help to encapsulate how it works better. You made a comment earlier on about the need to make good investments. You also talked about the banks' risk appetite. How do you balance the need to make good investments with innovation and the banks' risk appetite? We need to take more risk than the private sector. In every one of the innovation-type companies, there is risk that it will not work, or there is risk that it will get to £1 million of revenue, but it will never get to £10 million, or there is risk that it does work but it cannot produce the thing at scale. There are all kinds of risks in that. The private sector wants to invest in those kinds of companies, so there is a lot of capital available internationally to do that. We need to be earlier, we need to be bigger than the private sector might do. That is another way that we can take more risk, or we need to do the bit of the financing that the private sector does not want to do, all within the context of staying paid and not crowding out somebody else. It is complicated. As I said in my introduction, we should be losing money. We should not be losing a lot of money because we want the fund to compound so that we can invest more in the future. We cannot do that if the loss rate is too high, but if there is no loss rate, we are not taking enough risk. We will be coming to this committee over the years and we will continue to debate whether we are taking enough risk. There will be times when we get criticised because something has gone bust and we are all a share of idiots, and there will be other times when we will be criticised because somebody is saying, hang on, all your investments are successful, you are just doing what the private sector could have done and you are not taking enough risk. We have to get that balance right. On innovation, you said that you have invested £191 million over 30 projects, and it has already been touched upon that forestry is your biggest investment, and your next biggest investment is housing. Where are the innovative projects within your 13 that you have invested in so far? We should send the committee a pie chart of where the capital is being invested in the three missions by the amount of money and by the number of projects. Generally, we have invested in an innovative internet of things company in Glasgow called R3 that uses sensors to measure performance of things such as railway tracks and goes up to satellites. We have invested in a smart battery technology that is designed to address this low-carbon heat. We have invested in innovative tidal turbines in a company that is selling in Canada and hopefully will soon sell into Indonesia. We have invested in an innovative young business in the borders that has come up with circular economy green insulation materials for buildings. We have invested in one of the world's leading laser technology companies, which was a spin-out from Glasgow University. They say that they produce the world's purest light. Those are some examples of the innovation. I would like Liz Smith to have a chance to come in, as she is additional to the committee, but I will take Alexander Burnett first, but if people could be concise in their questions and answers, that would be helpful. Thank you very much, community, for just a couple of questions. Let's hope that we don't see you too often regarding individual investments that don't work, but you did mention with some total, so I'd just like to ask you, do you have a benchmark in the banking sector that you measure yourself against in the bank and at what point do you think it would be reasonable for the Scottish Government to be setting a target rate of return? That's a very good question. We're working on both of those things at the moment. It is, as I was saying earlier, a dynamic area in terms of return targets for particular types of investments, but it's a component part into the broader issue of target rate of return. We're working on a paper for ministers at the moment on target rate of return. It's quite a technical subject, so we're being very thoughtful about that, but we will have recommendations for Scottish ministers by the middle of the year, and we will produce a detailed paper to deconstruct what our thinking is on that, which the committee probably will find interesting. One last point. The actual decision on target rate of return is for ministers, but, as we are the technical experts, we ought to try and advise ministers as to what we think is right. In your 21 annual accounts, just over 80 per cent of the bank's assets by value is held in investment with no quoted market rate price. Is that a point in time where that figure is so high? Do you see that going forward? Obviously, this all feeds into how difficult it is to measure your return when there's no market for what you hold. Is that a target again around that figure? Most of our investments will be unlisted because that is where the market failure is. In listed markets, there's less evidence of any market failure, so I think that most of it will be unlisted. However, there are benchmarks for innovation-type investments, infrastructure investment returns, so we can benchmark the individual types of return, both in a development bank context and in a private sector context. Those benchmarks should help to guide us in what the ultimate target rate of return should be. Thank you very much. I have no more questions, convener. Thank you. I'd now like to invite Liz Smith if she would like to ask a question. Thank you very much, convener. Mr Watt, I know from having met you before that when it comes to very large sums of public money, which obviously is something held by the bank, that you agree wholeheartedly that there should be full accountability and transparency about how that money is spent. Particularly in terms of the way that the public is made aware of the objectives of the bank and the direction of policy that you have said publicly and privately is extremely important. Just as a point of clarity, can I be absolutely clear whether in the last year the board was made aware of any disagreements between the then chief executive and Scottish Government ministers about the direction of policy or the objectives of the bank? If there were any disagreements, what they were? There have been no disagreements about policy or the direction of the bank that I am aware of that are relevant to your question. Can I ask if there have been any disagreements at all unrelated to policy and the direction of the bank which the board was made aware of in the last year? No. In terms of whether the board was made aware of any concerns between the former chief executive and Scottish Enterprise, was the board aware of any concerns there? No. The chief executive worked with Scottish Enterprise. As you and I talked about earlier, we need to work out how each organisation works together. We are the new kid on the block, so we have had lots of discussions to make sure that we are aligned with Scottish Enterprise, but there are no issues that are covered by the normal discussions that you would expect us to have. Absolute clarity, there has been no disagreement to the knowledge of the board about any of the operations of the bank and the way of engagement with other stakeholders. Not that I am aware of, no. You said in the minutes of when you were speaking to the Enterprise and Skills Board in August 2021 that part of the role of SNIB is to solve the lack of private sector investment in certain projects. You were very interesting in the responses to Fiona Hyslop's line of questioning on the same issue. Since that time, which was obviously six or seven months ago, have your fears been slightly elated? Is it becoming more attractive to the private sector in terms of putting their money in? Just generally, to progress in Scotland, this is a matter of degree, so it is difficult to take a point-in-time view of it. At the time, investment in low-carbon was very much high appetite for the private sector. I do not think that anything that has happened since then has changed that. Where we are going are things that are very early stage or where there is a very specific gap. More generally, markets tend to be risk averse during times of heightened geopolitical risk. It is conceivable that there will be a lowering of risk appetite in the private sector because of the events of the past few months. How do we learn about those things? We learn about them from how we experience projects. I am not sure that we have seen a spike in demand. It is probably too early, so I would have said until this point that there has probably been not much change since what I said in August last year, but that might change now. What do you feel SNIB has to do to be more attractive in helping the private sector to become engaged? I think that we need to demonstrate that things that the private sector might think are too risky are not as risky as they think. There was a really good example of this with the green investment banks investment in offshore wind. The green investment pioneered offshore wind, and now it is all done by the private sector. I would like us to find areas where we can show that it can be done properly, and then I would ultimately expect us to step back and let the private sector get on with it. That is why we need to operate at the highest professional level as investors so that we can demonstrate that. I would like to find ways in which we could pioneer something in domestic heat. I do not have anything on the stocks that will do that, but if we could pioneer something in domestic heat that could be perceived to be investable by the private sector, that could be a phenomenal win, but we are not there at the moment. That is very helpful. My final point is how often does the board meet? The board has four regular meetings a year. It also has a board off-site, and it meets on an ad-hoc basis whenever we decide that we need to meet. It probably will meet around 10 times a year or something like that. That is minited, is it? If we have a call, that might not be minited, but normal board meetings are all minited. Can I ask about the business plan? When will this year's business plan be published? Can we expect it to be significantly different from the current business plan? The business plan should be published before the start of the next financial year, so by the end of March, the plan should be published. It will not be significantly different, but we will probably have a bigger emphasis on stakeholder engagement and outward facing. It is time for us to be more outward facing. We have our internal house in order, so now we should be going out more aggressively into the wider world. That brings us to the end of the evidence session. Thank you to witnesses for speaking to us this morning, and I move to private session.