 GOOD MORNING, and welcome to the third meeting of the net zero energy and transport committee for twenty-four. The first item on the agenda is to consideration of whether we should take items three and four in private. Item three is to consider the evidence we will hear on the Scottish budget and item four is to consider the correspondence relating to the circular economy bill. Are we agreed to take it that in private? We are agreed second item I have my papers in the wrong order. That's not a good start for the morning. I'm sure Cabinet Secretary's you won't have done the same. As you'll all be aware, we propose to run this session in two parts. The first is to put questions to you both on areas where you have a joint interest. Deputy First Minister, we will then also have questions for you specifically on measuring climate change impact on the budget. We'll then suspend briefly before taking further evidence from Mr Gray on matters relating to his ministerial portfolio. I suspect both sessions probably last about an hour. Before we move on to questions, I invite you both if you'd like to make a brief opening statement. Shona Robison, would you like to lead off on that? Thank you very much, convener. The challenges facing Scotland's public finances will be well-known to the committee. The pressures on the 24-25 budget can't be overstated, and in my view, as I've said before, represent the greatest challenge to any Scottish Government since devolution, where continuing to manage a wide range of pressures due to volatility from global factors such as the Ukraine resettlement, the impact of inflation, costs of living crisis and, of course, the on-going legacy of Covid-19. The UK Government's autumn statement delivered the worst-case scenario for Scotland. It contained a fiscal settlement that challenges the viability of public services across the whole of the UK. Our block grant funding for this budget, which is, of course, derived from the UK Government's spending decisions, has fallen by 1.2 per cent in real terms since 2022-23, and our capital spending power is due to contract by almost 10 per cent in real terms over five years. As I set out in December, we can't mitigate every cut that the UK Government makes, and we are at the upper limit of mitigation that can be provided within our devolved settlement and competence. While the UK Government has chosen to prioritise tax cuts over the investment in public services, we have made different choices. We have, at the heart of our budget, our social contract with the people of Scotland, whereby those who earn more are asked to contribute a little more, where everyone can access universal services and entitlements and where those who need an extra helping hand will receive targeted additional support. We have chosen to act to do everything in our power to protect public services. That includes a £6.3 billion investment in social security and more than £19.5 billion for health and social care, alongside record funding for local authorities and front-line police and fire services. Importantly, for the committee in 2024-25, we are also committing £4.7 billion in capital and resource for activities that will have a positive impact on delivery of our climate change goals. I look forward to hearing your questions. Neil Gray, do you want to make some comments on that? Indeed, convener, and good morning colleagues. As you will be aware, the Scottish Government is committed to a just transition by 2045. We are undertaking the necessary steps to reach the school within the context of the recent budget, which, as the Deputy First Minister has said, is challenging in many respects. However, there are also many opportunities before us that we are looking to secure. The projected economic benefits of Scotland's offshore wind are substantial. The First Minister's investor panel highlighted the sector as the single most important opportunity for attracting capital to Scotland and raising Scotland's wider investment profile. The supply chain development statement forecasts that £25 billion of investment is possible across the Scottish supply chain from Scotland projects alone. Our strategic investment in offshore wind will stimulate and support private investment in the infrastructure and manufacturing facilities critical to sectoral growth and wider economic growth. It will also support market certainty, helping to create a highly productive, competitive economy, providing thousands of new jobs, embedding innovation and boosting skills. Carbon capture and storage will play a critical role in supporting a just transition to net zero, with our unrivalled access to vast storage potential in the North Sea opportunities to repurpose existing oil and gas infrastructure and related skills and expertise. Carbon capture and storage also presents us with an economic opportunity to be at the centre of a European hub for this technology. Our hydrogen action plan sets out our commitment to support Scotland to become a leading hydrogen nation. We continue to engage actively with the sector and supply chain companies and we will work closely with the UK Government on the necessary policy and regulations coming forward. We will also continue to support hydrogen innovation through our hydrogen innovation scheme and the work on establishing the case for pipeline transportation of hydrogen from Scotland to Europe. We have been consistently clear that securing a long-term sustainable future for the Grangemouth industrial cluster is also of critical importance. We have committed to publishing a draft of the Grangemouth just transition plan this spring and have been working with the industry, the community and the public sector on this. The energy transition fund supports the north-east of Scotland's just transition away from reliance on oil and gas to renewables and it supports four main projects, the energy transition zone, the Aberdeen hydrogen hub, net zero technology, transition programme and global underwater hub. The budget means that we will continue to support those projects and, like the Deputy First Minister, I also welcome the opportunity to meet the committee this morning to discuss my area's responsibility within the budget before us in more detail. Before we go on to the questions, I think that Alison, I owe you an apology. I didn't say that you were the chief executive of Transport Scotland, probably because I knew that, but in case anyone else didn't know that, that is effectively what you're here representing. So, I apologise for not saying that and I'll go to the first set of questions which comes from Monica. Thank you, convener, and good morning cabinet secretaries and all of our panel today. I'll turn to the Deputy First Minister first of all, so thank you for your opening statements. You've set out the challenges and pressures both in a global context and also more domestic issues. I want to begin by asking how confident and certain are you that the spending decisions taken in the 24-25 budget set a course for meeting the interim 2030 emissions reduction targets for Scotland? So, thanks for the question. We have invested in 24-25 or we're committing £4.7 billion in capital and resource for activities that will have a positive impact on delivering our climate change goals. As you know, we are enhancing the way that we categorise Scottish budget spend, the dedicated climate annex, the budget outlines what is an enhanced taxonomy approach, but basically categorisation, setting out changes to the methodology to expand the use from just capital spend that was previously analysed to include resource spend, which I think hopefully provides greater transparency for this committee and others across Parliament in the spend alignment with the Scottish Government's climate objectives over its lifetime. It evaluates each spend line on its potential impact on either Scotland's emissions generation or its adaptation impact, and I think it will help us as we go forward to be able to compare not just budget to budget but the trajectory towards the targets. The detail is in an XG that sets out across Government in the various portfolio areas, but the cumulative £4.7 billion positive impact, I believe, will help us on our trajectory. We've got work to do, as every Government does. It's a really challenging target, as you know, and we will have to continue to consider not just the spend but the policies that we need to take forward as a Government, some of which are extremely challenging. All of this will be important to make sure that we deliver what we need to deliver. You would say in terms of the 2030 interim targets and the 2045 emission reduction targets that you are feeling confident? As confident as we can be that we are able to show and demonstrate where the spend, both in terms of capital and resource, is having a positive impact, but we can't rest on our laurels. It's a journey that has to accelerate. That means that we have to be able to demonstrate not just the spend but the impact of that spend and that we are able to accelerate the changes that need to be made. Those issues and challenges are not unique to Scotland. Every Government around the world is wrestling with the competing demands of the here and now, with the investment that needs to be made, whether that's in changing our transport system or in heating buildings that competes with other priorities. Those are really difficult challenges, but I think that that figure and the enhanced way that the budget is now presenting should give this committee and Parliament the ability to scrutinise that and to scrutinise the spending decisions that we are making. One example is obviously that the Government has really important targets on native woodland creation. It looks like you're cutting £33.6 million to Scottish Forestry. That's in addition to a 41 per cent cut to funding for woodland creation schemes. In terms of making the right impact, is that decision justified or do you have any concerns about that? We've tried across all the portfolios to focus on what will make the biggest difference. We've also taken into account not just the budget allocations but reserves that organisations might have. In terms of the nature, forestry and landscape restoration, we are going to invest £158 million in funding to make sure that we maximise the power of forests and land to help tackle climate change and protect nature. The funding will increase woodland creation, for example, and further protect and restore peatland. Within the biodiversity landscape and investments, we have chosen through the evidence base of where the advice is that will make the biggest impact. We are also investing £500 million in our natural environment to drive landscape scale change. Cabinet Secretary, I understand what you're saying, but I think that Monica asked a question on forestry planting, where you've cut the budget by 41 per cent. You didn't meet your planting target for last year. If you cut the budget by 41 per cent, are we really to believe that you're going to grow more trees this year or plant more trees this year? As I say, the Scottish Forestry budget takes into account some of the reserves that it has, which is a discussion that we've had with a number of organisations. Forestry and Land Scotland has reserves to make up the 41 per cent cut that you've put in the budget for planting trees. I'm struggling to see that, but tell me where I can find it and I'll look for it. We can certainly provide you with the information and the detailed discussions that have happened with that organisation in terms of its targets. We can provide you with that in terms of the follow-up. What I'm saying is that, in difficult times, we've had to prioritise where the impact will be best made in terms of where the resources go. Part of that discussion is looking at the reserves that organisations have. I'm not saying that it's a whole picture. I'm not saying that it replaces every pound. All I'm saying is that it's taken into account in terms of the funding that organisations have in order to deploy. Sorry, Monica, I interrupted you. No, no, that was very helpful. I'll hand straight back to you. It's okay. I'm sure you'll give me all the time back anyway. That's helpful. Others may want to ask about the use of reserves because there is a concern out there that reserves are being raided. I know that we have Alison every here from Transport Scotland, but we've had representations from SPT about the expectations on itch reserves. I believe they've set out in writing to the committee that the reserves that they hold are already allocated for infrastructure upgrading and other safety critical projects. Others may want to come on to that. I've got a few questions, convener. I wanted to go on, but we would welcome some of that detail in terms of the forestry reserves and how we're going to, at a time when Scottish forestry is approving a record number of, I think, schemes for woodland creation, but it looks like there's a big budget cut that's obviously a little bit jarring. Going back to confidence levels, how confident are you that the Scottish Government will be able to grow investment in low-carbon infrastructure to the £5 to £6 billion annually that the climate change, the UK climate change committee, suggests will be required by the end of this decade? Come to your first, Deputy First Minister. I'm going to bring Philip in just to address particularly the issue on the planting, which is a key pleasure. As much as anything, I'll draw attention to clearly there. Cabinet Secretaries are coming before committees in the round, and I know Mary Gougeon has already spoken about this to the Rural Affairs Committee last week. This is a tough budget settlement, so we are not necessarily going to be able to, we're going to have to make difficult decisions for in-year and in one particular year, but I think that the key thing is, particularly when you're looking at climate change and you're thinking about things like woodland and some of these other targets, you need to think about the wider period. Woodland has done very well. We have invested quite a lot historically, I think, in woodland creation. This year, this year is maybe a tougher settlement than others, because decisions had to be taken about where the priority needed to be. But going forward, we are very much focused on what is necessary for meeting that interim target for 2030 and that wider target at 2045. I guess in summary that there may not be an uneven kind of straight road of investment each year in the same organisation that will continue to grow. It will fluctuate. Capital availability is going to be constrained, so we need to think very carefully about, for example, where we may be able to lever in external funding to support some of our objectives, given that we're just going to have less capital availability. But keeping that ambition and making sure that we are able to show, as I think we have, the annex in the budget where our investment for 2425 is going to be focused, but that is going to be having to be set in the context of future years where that investment goes to make sure that we are on track to meet the targets that you've alluded to. Thank you. I want to ask about Scotland and Mr Gray. I think he touched on this briefly in his opening remarks. We know that previous in the Scottish Government pledged to use all the money raised through the Scotland auctions to tackle the twin climate and biodiversity crises. In September 2022, £56 million was utilised as part of the emergency budget review. Is it still your intention to reinstate that and when? Sorry, it's £54 million. That was part of the emergency budget review in 2022. The money that came in through the options on the Scotland leasing. In terms of the money that is generated from Scotland, we are using that to support the budget. At the moment, depending on where we end up with the path to balance for 2324, we will determine how much of the Scotland monies generated are able to be deployed in 2425. The Scotland resource has proven to be a really important resource in supporting the budget. What I'm not able to tell you at the moment is how much of that will be able to be utilised for 2425, because some of that is largely dependent on how much we need to draw down in 2324 in terms of our path to balance. Once I'm in a position to know that, after we've had the supplementary estimates and the spring budget, I'll be able to inform the committee of how much will be available for draw down in 2425, if that's helpful. I just want to better understand some of the figures. That £56 million, maybe Mr Gray, can help. What has that been used for so far? That was back in 2022. What happened to the £56 million? Any money that is drawn down from Scotland is used to support the budget, to support public services, essentially. The drawdown in 2324 will do the same. The drawdown in 2425, which was originally estimated to be about £350 million, would support the budget and would support public services. The issue that I'm raising about 2324 is that because of our path to balance challenges due to budget constraints, all the issues that we know are around the pressures on the budget in 2324, we've had to look potentially to draw down some of that Scotland-winning money for this financial year. That is the position of Scotland for this year and next year. In terms of 2223, I'm assuming that that drawdown would have been for the same purpose, but we can come back and clarify that if it would help. I would like to track that. There was media coverage just before Christmas, aside from the £56 million from 2022. Is it £750 million total that has come in from the leases? We know that within the current financial year there's been £310 million of that allocated. What's that going to be used for? Scotland's monies have been used to support the budget. In terms of path to balance for 2324, in terms of making sure that we can balance our budget, which we're legally required to do at the end of the year because of the volatility of the budget, pay deals being beyond what was budgeted for, and even though I set out some of the in-year savings, there is still a way to go in terms of the path to balance for 2324. I want to minimise any drawdown of Scotland because the more we drawdown in 2324, the less is available for 2425. I had set out at the medium-term financial strategy last May that we had anticipated having £350 million available to us in 2024-25 to support the budget. Any of that I need to use in 2324 to support achieving a balanced budget is money not available for 2425, so you can see why we want to make sure that we minimise any usage because that £350 million or whatever we end up being able to drawdown for 2425 is an essential part of the budget supporting public services. It looks like a lot of the Scotland auction money has been drawn down already. Some people have raised concerns, some people have a view that Scotland's seabed was sold off too cheaply in the first place and now feel that we're getting the worst of both worlds because the investment that was supposed to go into tackling the climate and nature emergency looks like it's just been absorbed into a general spending, so can you give a guarantee that moneys raised by Scotland's future auctions will be used for the intended purpose? The original pledge that was made to tackle the twin climate and biodiversity crisis, can you give that guarantee? I set out at the beginning of this session that we're investing in the 2425 budget £4.7 billion of capital and resource in positive action to meet our climate change goals, so you could argue that whatever amount of the up to 350 million of Scotland moneys, if it's part of supporting the budget, it's also part of supporting that £4.7 billion part of the budget that is tackling climate change. I guess my dilemma is in an ideal world with funding not being so constrained, would we want to create a different fund that is able to either pay almost like a sovereign wealth fund or something that would be very specifically geared to future action on climate? In an ideal world, yes, but when you're facing budget constraint, I think I would be facing questions across Parliament if I was sitting with 350 million either unallocated or being kept for tough times. I think that these times are the toughest and I'm having to use that to support the budget because it's not aligned to a particular part of the budget. The point I'm making about the £4.7 billion is that it supports that part of the budget as much as investment in the NHS or investment in Social Security Scotland because it supports the budget in general and without it, frankly, we would be having to make even more difficult decisions than we're having to make at present. Again, thanks for reminding us all about the context in which we discuss these matters. We know that there are many, many challenges but, Cabinet Secretary, you talked about the methodology and the importance of transparency in budgeting and being able to look line by line and see the impact. It's going back to the Government's original commitment to utilise the Scotland money to tackle the climate and nature emergency, not to deal with the NHS or public services more generally. Given my original question is about your level of confidence to meet interim 2030 and 2045 emission reduction targets, if we could take away that you just today can't give a guarantee that that Scotland money will be used for tackling climate and nature emergency only. The £4.7 billion that's in the budget... How does that £4.7 billion relate to the Scotland money? The Scotland money relates to the whole budget but it goes well beyond the £350 million in its entirety for 2425 from Scotland. The £4.7 billion of capital and resource that is going to have a positive impact on climate change goes well beyond the Scotland money that is being invested in the budget. We're going way beyond what the Scotland moneys would allow us to invest in climate change objectives. We're putting a lot of Scottish Government both capital and resource into tackling climate change well beyond the £350 million. The point I'm making is if you're saying when we set out the budget, do we allocate that £350 million only as part of the £4.7 billion? No, it's allocated to the budget per se in terms of presentation. I don't have it as an element making up the £4.7 billion but you could argue that it's part of the overall resource that allows us to put the £4.7 billion into our climate change action. I know there's a lot of questions so we haven't heard from Mr Gray but I'm happy to hand back to you. I may come in later if that is so clear. Absolutely and there's some supplementaries on this. I wasn't sure if you were trying to catch my eye. Bob has definitely caught it so he'll be after you if you were catching my eye or if I've misread you. I'll go straight to Bob. No, I had a question. Deputy First Minister, you spoke about leveraging external funds in the Scottish National Investment Bank has got a big role to play in that. We can see from the budget that the bank will have to invest has been reduced by 24.6 per cent in 24 or 25. The question was how does the funding to SNP actually work? Is it demand led that they are expected not to be needing more cash to invest or is there how much money they've got? Is it constrained by this budget process? I'll get all my questions in on once. I'll be happy to know. That's not only Scotland. It's on a supplementary question. Over the three years that SNP has been in operation, it's been given £638 million of taxpayers' cash. What are some assurances that the bank is spending our taxpayers' money correctly? I'm saying that because there's meant to be an advisory board in place that looks over the conduct and performance of the bank, and that still hasn't been established. What assurances can you give on that? Definitely answer those. I know that other people have questions on Scott Winn, so it's not over yet on that. On the Scottish Investment Bank. SNP's investment decisions are for SNP and we expect them to use their expertise that they have around the table, which is considerable in making the investments that will align with the priorities that we have and making sure, particularly in terms of net zero investments, that those are the priorities. In terms of the funding, they have traditionally relied on financial transactions because they can make good use of financial transactions. FTs are a bit limited on where they can be deployed, so traditionally affordable housing and SNP have been the recipient of FTs. Unfortunately, the FTs that we have had from the UK Government have declined significantly, and this year, I think, there are 24, 25 and a nation of 160 million thereabouts. So we've taken the decision to put all of the FTs to SNP for their investment programme. That is so. We would expect them to use that investment in the way that aligns with our priorities. If you're asking me, would we have wanted to give more money to SNP in an ideal world? Yes, but given the reliance on FTs, we're really not able to do that because we have less FTs to distribute. In terms of the advisory board, Neil, I don't know if it's in a hyn. It's still been worked upon and there'll be an update in due course. Sorry, what do you mean by due course? Because the bank's been established now for well over two years. It's part of the act that the advisory group would be established. I've been asking questions about it and still getting nothing. When we look at the budget process, every pound is a prisoner, I think we all agree on. Should this group be in place to monitor the bank's performance? There's still a very strong relationship between myself, other ministers, officials that work with SNP on analysing the work that they're doing. They give us regular reporting on their investments and the performance of them. The advisory board is a commitment that we hold and we will stick to it. As I say, the update will come in due course. So is it needed then if you think that the governance is good? Why is it needed? Obviously SNP is in a period of transition from its establishment only a short period ago to being going to a position where we hope that it will be self-sustaining. In that period, obviously there are points that we need to get established, including the advisory board. We do have a very strong relationship. I met SNP with the chair and the chief executive last week or the week before, where we discussed indeed the strategic priority that Scotland is and looking at how we can maximise that opportunity. So we have a very strong working relationship already, but as the bank develops and grows, we need to ensure that the oversight continues to be grown alongside that, and that's why the advisory board comes in. We're working on establishing that. You wanted questions on Scotland, did you? Absolutely. Deputy First Minister, you kept talking about the path to balance the budget in relation to the drawdown of Scotland's money. As I was listening to that, the expression just transition was floating about in my head. I wonder what people would say that I'm living in poverty today by having direct action taken by the Scottish Government to mitigate some of that poverty caused in the teeth of UK austerity. The use of that money drawn down given, and I should declare an interest, I'm deputy chair of the social justice committee, the 31.1 per cent increase in that budget. Deputy First Minister, if you think we could talk to the communities that I represent about a just transition and climate emergency, look at them now, if we didn't draw down some of that money to plug the gaps from UK budget settlements to help those living in poverty to the role they represent, surely there's got to be a balance in relation to this, and that's also part of a just transition. There's always in every budget that tension between investing in the here and now and the mitigation and supporting household budgets, cost of living crisis, supporting some of the most vulnerable £6.3 billion investment in social security, I think speaks to that, with the tension of investing for the future, and there's always a balance. So some of our budget clearly is for the here and now and the everyday and keeping people's heads above water, and I think if we weren't doing that we would be getting asked why. With balancing with some of the investments that are very much about the future and the climate change targets of putting in place the building blocks and the budget attempts to do that, so we've got the £6.3 billion investment in social security, but we also have £4.7 billion where you can attribute that capital and resource investment directly to having a positive impact on the climate change goals. Some of that is very much looking to the future, and some of that will be in the just transition area as well. So those are quite competing demands often that we have to wrestle with around the cabinet table. It was actually through the wider point that the communities we represent who are living in poverty, they have to make the lifestyle changes required to tackle the climate emergency as well, and if we don't support them at this time, the buy-in for most communities will be much more limiting than it otherwise would be, and it's also the right thing to do, but Scotland of course primarily is for that step change that we have to do in tackling the climate emergency, and we know that this is one-off moneys that have been spent, but the hope is that some of this offshore wind capacity becomes operational. There's a fees regime that the Scottish Government will then be able to activate. I'm just wondering what the latest thinking is of the Scottish Government when we can activate some of that further cash income to the Scottish Government when some of those fields might be operational and what the modelling work shows on that, and it could be five years away, it could be seven years away, but future Scottish Governments will have to think medium to long-term and some of the structural changes we have to make. So what is the latest Scottish Government thinking, and is there any modelling work at the type of income we might start to receive from those fees? So I'll hand over to Neil on that point. There are quite a lot of complexities around looking to the future beyond Scotland, but I'll let Neil come in. But your fundamental point about whether it's tackling full poverty and making sure that the measures taken to tackle climate change are not exacerbating some of those inequalities, so I'm very mindful of the discussions with the housing sector around moving to net zero heating systems. It has to be done in a way and is a red line for us as a Government that doesn't push more people into fuel poverty because those systems are more expensive to run. So we have to make sure that in every step we take that as one example that we are very mindful of those who could benefit the most if we get it right, but could also be at risk if we don't get it right. Thank you, Deputy First Minister. I'll be brief, convener. Mr Doris is correct that the opportunity for further income as Scotland becomes operational is substantive, not just in terms of the direct income that can come potentially to the Scottish Government, but also the reference that I made in my introduction to the huge economic multiplier that comes from the supply chain development. To support Scotland becoming operational as quickly as possible, we're prioritising in this budget and through the First Minister's commitment to £500 million over the next five years for the development of the supply chain. That helps to build the confidence for those developers to be able to go through the process of developing their sites and thereby maximising the opportunity that Mr Doris points to, which we hope we can do, and take as much from an energy deployment perspective, but also from an economic perspective from Scotland. I know that Governments hate timescales on these things, cabinet secretary, but I wouldn't do my scrutiny job properly if I didn't say, are we talking five years? Are we talking seven years? Are we talking 10 years? What's the best estimate, if you like, given the uncertainty out there in relation to when one of those fields would become operational? Obviously they're going to move at different paces and they're going to come into the process at different points. You've got a number of different projects in that leasing round. They have to go through the process of getting their grid position allocated. They have to go through the consenting regime, so it's difficult to pinpoint an exact timescale, particularly given that each one will move at different paces, not least because some are going to be floating, some are going to be fixed bottom, but we're certainly hoping that we can see these projects happening as quickly as possible. That's why we're allocating the funding that we are for the supply chain development so that we can see this moving. You can see some of that coming with the progress that's been made with Sumitomo as a public example, but there are many other examples that are discussions that are commercially confidential at this stage that we hope will be able to bring forward in this year as well. I am delighted that I don't have to deal with these complexities. Maybe a flexible timescale at some point in the future to the committee would be helpful for us to better understand. I'm happy to do that to satisfy Mr Doris's questions. Just before I ask some questions on Scotland, I just want to remind committee, I asked a question on woodland planting grants or made a comment, which Philip responded to saying that it had done well in the past, whether it's never reached its planting target in the past, but the point I want to make is that you as a committee know that I am a partner in a small farming partnership in Murray and I can categorically say that in the last 10 years, possibly longer even, but 10 years I haven't applied for a woodland planting grant and I don't intend applying for one in the next 10 years on growing crattle mortrees. So just so that that's clear, just go back to Scotland Wind if we may. The option agreement, all option agreements are time spanned so if they're going to take up their option, when have they got to take up their option by? That's going to vary and I'm happy to set out in more detail to the committee in response to the questions that come forward from Mr Doris and the timescales involved in that so that the committee can have confidence in that. Okay, so you would have a list of when the options would expire but you'd also know when each of the options, how much they're going to be worth because options are a percentage perhaps of the full value of the contract to the person who's or the person who's taking the option. So what is the total value of all the options, the £750 million that's been generated? What is the total value of that in income to the Government if they were all developed? Again, I'm happy to provide that and rating to the convener after this meeting. It's pretty fundamental if we're to understand what Scott Wind's going to come because £750 million is just a down payment of where it's going and we would need to know and I set the point that the Deputy First Minister has made about using that money to across the budget but it has been used across all of the budget. So my question is to, I'm not sure which cabinet secretary it is, I always get confused. The £750 million option payment that was paid to the Crown Estate is that capital or is it revenue? It will be revenue because the drawdown that we are using is resource drawdown. But I will come back to you if there's a capital element but the money I was describing earlier on available to the budget is resource. I'm sure you checked that because if it was a capital element by the law that's laid down it would all have to remain within the Crown Estate so you must be looking at it as partly revenue. As part of the agreement that was made with Crown Estate that a percentage of all revenue income can be maintained with the Crown Estate budget 9%, are you taking all of the £750 million or are you going to give some of the Crown Estate as to keep within the budget to deploy it as they see fit or not? That will be a discussion with Crown Estates in terms of their requirements. They incidentally do a very good job, I should put on record, and they have turned around the ability. Scottish Government has had a role here as well of us doing pretty poorly in the past from Crown Estates. The focus has been on the work that has been done and the use of the assets and the work that has been undertaken by Crown Estates Scotland has led us to the position of quite a transformation, which has been extremely helpful, not least to the budget support that now provides, but that's been a journey from a position very, very different. That's probably because they never had £750 million worth of income in one year. Their income has been mainly developed from agricultural leases and some property leases, which some are in Murray where I live and we're very grateful that the Crown Estates are providing tenancies to people. I think you're in a basic answer to your question. These are negotiations, but we'll make sure that Crown Estates Scotland is important to me that they're able to continue to do the good job that they are doing. Okay, we're going to move on to the next questions, but just for clarity what I've understood from that is you are going to say when the option payments are going to come, how much that £750 million is a percentage of the overall money that received, how much the overall money will be on an annual basis, and you'll clarify whether any of the money that's been generated by the Crown Estate will stay within the Crown Estate or whether it will be given or taken or entirely by the Scottish Government. That's £750 million. I'm sure the clerks will have made a note and will write to you, Deputy First Minister. The next questions come from, I think it's Mark Ruskell. Yeah, thanks very much. I'd like to rattle through some questions with you and your team, Deputy First Minister, about the joint budget review. If I could start just by asking for clarity as to whether it's yourself or whether it's the Cabinet Secretary for NZ that's ultimately responsible for that piece of work, because I think we've had correspondence from both yourself and from Ima Callum as well. I'll kick off. I mean, the joint budget review, and I've touched on this already, was really to take forward three strands of work that firstly to have the dedicated climate narrative in the budget document, which we have, to enhance the categorisation that we talked about earlier on, which, again, we have now, but it's still work in progress, more work to be done. Then the development implement of Scottish Government-wide net zero assessment. Essentially, that will be, I guess, what you could describe as an iterative process with the intention being to roll it out across the wider Scottish Government from late 2024, so later on this year, and then following roll-out there'll be a review to ensure it's fit for purpose. It's really trying, I guess, to select a broad range of policies from right across Scottish Government to pilot the methodology to go further than we have so far. I think that the benefit of that will be to be able to look at policies as they develop as to whether they are impacting positively in the way that they need to in terms of making their climate change goals. I think that those three strands taken together once completed will get us to a better place. In terms of the specific, I think that we're just wondering who ultimately is responsible for that within Government. Is that budget, and therefore it's yourself, DFM, or is it Mary McCallan? We have had correspondence from— We both signed the letter, so I guess portfolio lead is Mary McCallan, but my overarching role across the whole of Government to make that drilling down and more impactful analysis work better. I think that Philip was wanting to come in. Just to make that point, it's naturally should be between both cabinet secretaries, between the Deputy First Minister and the Cabinet Secretary. Deputy First Minister would naturally have that responsibility for such a fundamental way of looking at the budget and putting in place that process across Government. The Cabinet Secretary has naturally had that responsibility for ensuring that information informs the budget choices given the portfolio lead, so it's a fully shared responsibility. That's fine. That's joined up Government, right? Just then looking at those three areas of work then. The first strand was that narrative, which I think has been useful. The second strand was that taxonomy, that classification, and that's been expanded, so it's not just about capital now, it's about revenue as well. With that second strand, is that it now? Or is there going to be a further review of that? Is there going to be a further expansion of that kind of transparency? I think that it will be work in progress to make sure that as we go forward and are able to compare budget to budget, for example, it will be able to provide more of a monitoring of are we making the improvements that we need to make. The new methodology does evaluate each spending line on its, as I said earlier, potential impact either on the emissions side or the adaptation impact. Just to share with you, the capital and financial transactions funding position for £24.25 is £6.4 billion and it apportions around 42 per cent of spend to positive activities in absolute terms. That's around £2.7 billion for positive spend for climate. There's a lot, I guess, in what you would describe as in the neutral space, so if you take the size of the resource budget, £36 billion for £24.25, clearly most of that spend is on front-line services, NHS, social security, local government, et cetera. 75 per cent of the total resource budget is categorised as neutral spend, so it's not having a negative impact on climate, but neither is it having a positive impact, but it's important to make that point when you bring in the resource budget, clearly the bulk of it is going to be on staffing and that's not going to have a positive or negative impact, so a minimal carbon impact from the resource side of things. In terms of going forward, I think as this is the first year, there's potential for improvements to be made for the evidence-based used and assessing impact, so I think we would see this as the start of a process, it's not the end journey, and you'll be happy again to revisit perhaps after the experience of this budget where we might make some further improvements. Okay, and I think you mentioned at the beginning there that Annex J, which is a pretty useful spreadsheet where you can find out those policies that are going to make a big climate impact and those that might make a negative climate impact as well, and I noticed Monica Lennon was talking about woodlands of woodland grants, that's listed in there as well, but just in terms of transparency though, I mean would there be a further level of information that could be provided, so what we've got is a broad categories of things that are positive for the climate, have a high impact, but if we were to drill down and say well look actually we do need to be prioritising for example woodland grants or something else, how would we be able to look at that and say well that's because we know it's going to result in this big impact and we can see the figures behind that, is there a level of more information that would be useful when it comes to budget negotiations or other scrutiny? So there will be in terms of the evidence base of what makes the biggest impact and I guess that's where you get into quite difficult decision making because you've got an array of things that make an impact to some extent but you only have a certain amount of money to deploy, you then have to make judgments about at this moment in time where is the biggest impact, it doesn't mean you won't revisit, so like Phillip's point about you know the budget returie isn't the straight line, it will be peaks and troughs but the destination is to plant more trees and to meet those targets so but with a certain years where you know there are real big challenges sometimes you have to prioritise other areas, Phillip. Just add on to that, you'll see the different strands build on each other, so strand three which is about testing out that more deeper dive getting into the the guts of new policy understanding what the implication of that are once we start testing out that methodology, get something that works, start rolling that out across government in the way that Deputy First Minister has outlined that would be informing over time those assessments and things going forward. How and the time scales obviously depends on you know the assessment the piloting of that but that's the intention so that that information is informs budget decisions within government, informs budget scrutiny by yourselves and by Parliament more generally. Yeah, I mean that was really my last question was about that third strand of work and that absolutely mainstreaming that net zero test across the whole of government making it integral to the budget process. I suppose I was I suppose a little bit concerned by the response that we had from from money McCall which seemed to suggest that it wouldn't be intrinsic to the annual budget setting process that net zero test but I don't know I'm getting a slightly slightly more nuanced position from yourself DFM ran that in that it's being piloted it's being extended across government but you know ultimately it needs to be there even though it's not the only consideration when it comes to spend. I guess I couldn't hand on heart say that it's all going to be fully functioning across every line every policy decision by the time of the next budget probably not because it's complex but I think we're on a journey that is very much about all stages so at the policy development stage as well as the the negotiations around you know it is a policy that is agreed amount of money are we going to spend on it so I think embedding that right from the start of you know when we're looking at policy what is the analysis in terms of the of the impact and being able to set that out. Yeah okay thank you I'm just looking around the committee I've got some questions for the Deputy First Minister which I've actually directed at you Deputy First Minister because I'm going to get a chance with Mr Gray in the next session to talk about the follow-ons on it so I want to just ask you about the I love this word reprofiling of the small vessels replacement programme reprofiling means cutting so what is it what is it going to what effect is that reprofiling going to have on the viability of Ferguson marine shipyard what's your assessment Deputy First Minister. So in terms of and this was that we talked about this a few months ago when we were looking at the outcomes of the small vessels replacement programme phase one the outline business case work which was presented at the end of 2023 and subject to approvals and procurement this could see the delivery of the seven new small vessels between 26 and 2028 the reprofiling was due to this stage at which the the the discussions had got to in terms of the details so the funding really follows where the contracts and negotiations are at and the reprofiling was due to the stages of the funding being deployed not being reached and when you set out you'll know this when you set out your funding profile it's based on what you think the time frame is going to be inevitably things change and that is what happened in terms of that transport Scotland gave assurances that it would have no impact on the kind of end point but it was about the profiling of the the resources that were going to be needed in what stages and that allowed us to make those in your savings it doesn't mean the pot is going to be any smaller by the end of the process far from it but the time frame of of when what is spent has has shifted because of where the contract negotiations were essentially that's what i set out a few weeks ago. So if CMAL's budget has gone down by 31% or been reprofiled which is the 30 million pound loss to that budget that's going to have no impact on when the small vessels come into service it will still happen in the same year if you don't start work this year it will still happen within the time frame that you've got. I struggle with that sorry. So what i've set out is subject to approvals and procurement so there's obviously a process there that requires procurement to happen and there are you know there are ifs and buts around that but all being well subject to approvals and procurement we can see the delivery of the seven new small vessels between 2026 and 2028 and you know that is the plan and you know if there are any changes to that of course we would bring bring that to the attention of of parliament but that is the intention and you know we'll be able to provide updates as soon as possible once we have those key planks of the process going forward and we'll happy to keep parliament updated. So what do you perceive is the risk to Ferguson Marine shipyard by losing potentially 30 million pounds in this year to build those vessels? Is that a risk or is that not a risk? I'm going to get a chance at Mr Gray afterwards. You will have made the decision as finance secretary. I'm looking for you for the answer to that if I may Deputy First Minister. Well the profiling of the funds that are required by Ferguson Marine are part of the negotiation with Ferguson Marine in terms of what is required when. There has been a lot of attention given to the funding profile of what has been required, what has been spent, I think probably more attention than many areas of of of Scottish Government investment. So you know when we and you know I'm doing nail bail to give more detail but when we negotiate with any organisation that is receiving public money that is a negotiation about what is required for that particular year to deliver what they're saying they're going to deliver. Now you know there is a history there of you know that has been quite challenging and no one's going to say otherwise but we are you know attempting to make sure we align the resources required with what is realistically going to be delivered in that financial year and that's the best answer I can. Mr Gray no doubt will answer that in the second session when we get to final question for you as part of reprofiling these small ferries project and cutting sea miles voted budget by 31 30 million what effect is that going to have on the harbors works that need to be undertaken to ensure that the very ferries that we've talked about being so delayed actually are capable of coming into service. I think there's problems at address and just this morning with this weekend with the pair. So how's that going to affect that? You're right to point to port infrastructure being really important and we may not be absolutely committed to the funding not just of the new vessels but the port infrastructure to support the ferry services and that's why the infrastructure investment plan set out funding of £580 million and why we've provided over £100 million in further funding to allow the purchase of new vessels for a little mint for example in terms of the infrastructure investment plan going forward. I guess two parts to that. One is there will be an update at the end of this month of the projects that are already in train and where they are in terms of any delays. There's then the next phase of the infrastructure investment plan which we will produce later this year. We would have liked to have tried to have aligned that with the budget but as you appreciate there are quite a lot of uncertainties given the capital outlook, the position with the spring budget in terms of where that leaves us with capital funding but we will set out the next iteration of the infrastructure investment plan. There's no doubt that the capital budgets going down is going to have an impact across the board but what we need to make sure is that where we're investing in new vessels clearly the port infrastructure has to be there to make sure that those new vessels have the correct infrastructure required for those vessels so that is an important priority. As we get the detail in terms of any changes, any amendments to the infrastructure investment plan you've mentioned one or two of the port infrastructure there are a number then we're very happy to provide you with that detail but the publication will be later this year and I think that that will all be decided on a CML board meeting which I think is at the end of this week unless I've got the dates wildly wrong and maybe Irelanders can look forward to drawing down some of the Scotland money to help with making sure that their ports are up to speed. Anyway that's all in the future thank you very much Deputy First Minister we are going to briefly suspend the meeting to allow you to move on to your next committee I think you're going to and so far I'd ask committee members to be back at 10 30 and I'm now suspend the meeting thank you. Welcome back and welcome back to Mr Gray who's remained in his table alongside Colin Cook the director of economic development and Susie Townan the deputy director for energy and industries and we're going to move straight into questions you're not getting another opening statement Mr Gray much so you might like to go straight to the deputy convener of Ben Maffers and Ben. Good morning cabinet secretary and to your officials thanks for being with us just focusing again on wind and particularly offshore in the current circumstances as well as other marine based energy with respect to your commitment to have the consenting times for renewables projects. What plans have you for improving the resource that local authorities need to reduce the amount of time taken to assess planning applications for new energy projects? That's within local authorities and I have some questions about other licensing bodies in due course. I appreciate Mr McPherson's question for clarity our commitment to halving the consenting time is for onshore wind it's part of the onshore wind sector deal where although we cannot mandate developers in this area we've got an agreement from them to consult communities at an earlier stage of the development and to come forward with a commitment on community benefit which is both generous and we ask them to be more strategic in the way that that community benefit is being derived and in return we are looking at how we can half the consenting time for onshore wind that's an important distinction because onshore wind is clearly from a planning consenting perspective at a far more advanced stage people are far more are far better versed in the processes for that both developers and planning officials and those from the regulated bodies than is the case for offshore wind or indeed other marine energy but I am also aware of alongside access to grid which is actually probably the biggest barrier to investment that we face for offshore renewables consenting is providing as much certainty as possible as one of the greatest asks of industry so we are looking at what we can do in that space to streamline that process whilst also making sure that we're balancing that streamlining with the need to ensure that we're taking environmental considerations seriously and in terms of what we're doing through this budget to try to ensure that planning authorities are able to deal with that the Deputy First Minister had made a reference in her budget statement to us looking to work with industry to improve the support that's available for planning authorities and that work is under early consideration as how we can move forward the planning processes in general not just for renewables but for all projects and supporting local authorities in that regard. I think both in professional services and within local authorities it's important to acknowledge the expertise and high level of skill that we have in Scotland that's been developed over a long period of time and that's actually one of Scotland's real assets and it's renewable development. Thanks for your answer there cabinet secretary and you spoke about offshore wind but the issue that I'm going to raise is also relevant to port development for example I had this experience with the port of Leiths becoming a renewable hub and that project's well underway now and being consented but during that process there was some concern about the time taken from Marine Scotland to deliver the necessary consenting validations so in terms of the licensing operations team within Marine Scotland the Government considered how it's going to make sure that that's effectively resourced in the period ahead given how essential that is for consenting offshore wind and rightly you know we want to do this thoroughly and robustly and appropriately in terms of the environmental considerations but where projects are compliant we want those licenses to be issued as to me as possible whether that's for offshore wind for tidal energy I'm going to write to you shortly about NOVA innovation in my constituency which I know you've visited and they're looking to deploy in Orkney but are still waiting the necessary consenting along with other partners I should say. How do we improve this situation to make sure that we really maximise both the determination that there is by investors to make projects happen but also undertake the processes thoroughly and appreciate we're going to need to grow the skills base in this area that takes a bit of time but how do we make it happen? Again I thank Mr McPherson for his question first of all to acknowledge the first point that he made that we have a competitive advantage in the skills that we have across the system from our experience that there is an energy consenting engineering etc in general puts us in a very strong position there are areas obviously where we're talking about new technology and going into areas of the environment that we haven't considered before so some of this is going to take some time however I am keen to continue to work but not just for my responsibilities which include consenting some of these projects but also some of the responsibilities that my colleagues have for those bodies such as Marine Scotland, NatureScot and others that Mr McPherson referred to to ensure that they have the capacity, the skills and experience and the direction to ensure that we are balancing the consenting requirements we're taking sometimes competing environmental considerations looking at our climate change responsibilities but also making sure we're protecting seabirds for instance which are competing demands in some areas but taking those seriously and looking to provide as much certainty as possible for industry and as Mr McPherson puts it provide timious responses I am very well aware of Nova Innovation a phenomenal success story and a really strong brand that is becoming internationally recognised obviously won't be appropriate for me to discuss individual applications but in general terms I say that we would look to provide consenting in a timious fashion and to do so in a way that is demonstrably fair and compliant with the regime that we have set out. Thank you cabinet secretary and as we move further into this new year towards the spring the UK government's sixth contract for difference option round is something that's very important to the renewables industry in Scotland in terms of making sure that we maximise that opportunity and that involves timious consenting for those projects that are relevant and looking to benefit from that but also the contracts for difference option round A6 could be not just a huge opportunity to drive forward renewable deployment but also to move beyond the mishap quite frankly of AR5 so I know you've very engaged on this issue but just if you could set out to Parliament what the government is doing to impress upon the UK government that it needs to set an ambitious target and budget rather for the auction and make sure that Scotland can maximise the opportunity by having as many projects eligible for the auction as possible. Mr McPherson hits upon a critical area of decision making that's going to be coming down the tracks this year. I'm very pleased first of all that the strike price that has been set by the UK government is one that answers the industry's concerns and the reason why AR5 was such a missed opportunity particularly for offshore wind and we along with industry impressed upon the UK government the need to ensure that they got the strike price right I think we have agreement that they have taken that very seriously and have responded accordingly which I'm very pleased about and put on record once again that that has happened the UK government has taken that approach. The next challenge is as Mr McPherson sets out the overall quantum that is going to be available in AR6 and for us to make up for what happened in AR5 it's going to be important that the quantum is sufficient to be able to allow progress to be made particularly for Scotland but also for that some of the other technologies coming through that we did see in AR5 as a result of offshore wind not being there so some of the projects on marine energy such as wave and tidal that we see all come through for the first time there is another element that is going to be a difficult balancing act because we need to make sure that we are fairly balancing can be the interests of ensuring we get price at a good level but also that we are encouraging the economic opportunity that comes from developing the supply chain so non-price factors being part of the consideration of AR6 and I hope that there will be continued engagement between UK ministers and myself and Gillian Martin energy minister but also at official level as well so we can make sure that this massive opportunity that we have both offshore wind Scotland is being right up there as being as I said from the investor panel's perspective the top economic opportunity for inward investment investment of capital but also the other areas of marine energy to ensure that we take our opportunities they are grasp them and ensure that there is the much more benefit to our people. Thank you and I feel reassured from your answers because 2024 is a huge year of opportunity if AR6 is right and the consenting processes can be somewhat improved there's huge potential to build on and rightly in just a few moments ago and in the first session cabinet secretary emphasized the huge opportunities for the supply chain across the country from the port of Leith to the north of Scotland but could you provide a bit more detail on how the newly 70 million for offshore supply chain support will be spent just to bring that figure to life as I know this is designed to leverage private investment which is looking for opportunities to engage in our renewable sector and just in your view I appreciate this will need to be a general figure but what would you consider a good ratio of private to public investment leveraged from these funds? I appreciate Ms McPherson has a direct interest in the port of Leith I would say that there are other ports available and there's going to be plenty of work to go around all of them but the port of Leith has obviously huge opportunities given its location its geography it's also its capacity and the fact that it is a green free port to be able to take advantage of the opportunities that are coming from developing a Scottish renewable supply chain. There are a number of areas that I wish to pick up upon there the developing the supply chain a Scottish based supply chain for our renewables industry in general but offshore wind in particular is one of the greatest economic opportunities that we have I take it incredibly seriously it's why the First Minister came forward with the £500 million commitment which has been welcomed by industry as not just giving certainty but confidence to investors that we are taking this issue seriously I'm going to be looking to develop upon that with colleagues on coming forward with the green industrial strategy by this summer which is going to take the decisions and set a pathway for how we develop the supply chain what it looks like what areas we'll be looking to prioritise I think if we've got that right we're not going to be pleasing everybody we're going to have to prioritise where the public funding goes and that will be partly considered through the green industrial strategy there is also the strategic investment model that Gillian Martin took forward last year which again has a huge amount of potential within it including port, harbour infrastructure and other elements to come through which enable some of the supply chain opportunities to be realised so we're working on that collaboratively across government as Mr McPherson would expect and also with industry partners to ensure that we are getting this right to maximise as I say the economic opportunities that come through here but also to facilitate and enable the developers to come forward particularly for Scotland at the earliest opportunity just on that racial point that question do you have a I don't have a figure to consider that I don't have a figure in my head obviously there are the likes of SNP and Scottish Enterprise and other investors have have to consider this and some have stringent targets upon this I'd be happy to give a more considered view back in writing as part of the further information that I have committed to in the previous session thank you cabinet secretary and I do I do think it's important for Parliament to keep in mind this the huge opportunity to unlock private investment with public investment and that that's of course part of the intention of the government just before I allow our colleagues to come in on these issues given the the prominence that has been emphasised to me by by some in the renewable sector and I'm sure the cabinet secretary as well of the considerations around berwick bank I appreciate the cabinet secretary won't be able to speak about a process that's under consideration by by consenting bodies but I just wondered if you wanted to touch on that proposal at all just given the the significance in the scale first of all I would like to re-emphasise the point that Mr McPherson made around the importance of private capital in us realising our renewables ambitions it's quite frankly not going to be possible for us to be able to achieve scotland or indeed develop a supply chain without private capital which is why we're taking the investor panel recommendations so seriously it's why we're coming forward with the green industrial strategy to give clarity and focus to potential investors around what our ambitions are put up a big saltire internationally to say come and invest here in scotland scotland is open for business we need that private public collaboration if we are to achieve what we want to achieve so we want to make sure we're coming forward with the investable propositions make sure scotland is a destination to do business in and that's why we're looking to bring clarity as best we can with the documents that we're coming forward with this year I can't comment on a live application it would be completely inappropriate for me to do so as Mr McPherson has alluded to except to say that that process is on going thank you I think that was a nice try of Mr McPherson I think is what you're being told there Bob you've got some questions then I've got Mark Rassill wants to have some follow up and some and Sam from Monaco so if you go go first and then followed by Mark thank you cabinet secretary just reminding a little bit it was in the Miss McPherson line of questioning about speeding up consents and local authorities to to go quicker in relation to that I'm I'm conscious for larger projects I've decided at a national level the energy consumption it would would deal with a lot of that and I see from my briefing that the fees regime should make the running of that unit cost neutral how do we make sure that it's cost neutral for local authorities and that they're appropriately staffed with the correct expertise to to to speed up that process because a lot of upfront costs I would imagine to let resource local authorities to do that so how does this budget secure the investment in local authorities that they'll undoubtedly need Mr Doris is absolutely right and part of the reason why I am so interested in what the deputy first minister has committed us to look at around support for the planning functions that local authorities are responsible for is precisely that point that we're going to see some local authorities who are going to have to deal with large complex planning applications in the energy in some cases in the energy in some cases in infrastructure space and you know I'm looking at what might be possible to support planning authorities in that space that there is no direct commitment as yet it's in a discussion on a consultation phase around what might be possible but I'm very cognisant as the government is around the need to ensure that we are providing as much certainty as possible to potential investors whether it's in the energy space or otherwise and ensure that our planning processes are fit for that not just in NPF4 but also from a resource perspective that they're able to deal with this and I hope we'll have more detail on that coming as these considerations continue. That's what's on going cabinet secretary but I'm just minded though if there's a principle for the energy consent unit that ultimately that will be cost neutral and the running of that is there an anticipation that whatever funding mechanism is worked out with local authorities including obviously fees regimes underpin some of that as well that that should also be cost neutral to local authorities. I believe that that is part of the consideration already I'm not entirely familiar with how this is set up but I'd be happy again to come back to Mr Doris alongside colleagues on ensuring that he has clarity on that question. I think my colleagues would welcome that I suspect. Can I also ask about and again the exchange with Mr Macpherson in relation to how other public bodies may be financially supported and I think during your discussions NatureScot was mentioned, MarineScotland was mentioned and I'm sure there are there are various others and there's something in our briefing pack that talks about not really being clear about how much funding could be realised for those organisations until we've got a better idea of the pipeline of projects that that are coming forward. Are there maybe some upfront costs that are required for these organisations so that they are prepared for this, what we hope will be a full some pipeline of projects coming forward and I suppose it's back to the question in the earlier session. What is the latest update you can provide the committees to what this pipeline of projects looks like? Some of that has come forward through, in terms of the pipeline of projects, some of that has come through the strategic investment model, the SIM. Some of that will also feed through into the work of the green industrial strategy. From that, in terms of an energy generation perspective, there's also the opportunity for significant expansion of the likes of the transmission infrastructure network, which is not just an economic opportunity but also an energy necessity if we're to realise our climate ambitions, our realising the opportunity of our renewable energy capability but the electrification of the country. In terms of the resource for likes of Nature Scotland, Marine Scotland and other statutory bodies, that is obviously constantly under review, depending upon their requirements and discussions will be on going with relevant ministers and cabinet secretaries around those allocations, whether they're appropriate, and looking ahead to future pipelines of work, ensuring that they have the capacity to be able to respond to that in a timuous fashion. It's budget scrutiny, of course. The note that I have in my briefing pack is that we need to wait for industry to bring forward a pipeline of projects and be clearer about that before we can identify additional resource for various public bodies. Is that just a budget reality? It's going to be both. Both are going to be under consideration, the current resource requirements for those bodies as well as looking at the future. Some of that is going to be getting clarity from industry around some of the projects that are going to be coming through. I reference the transmission infrastructure as an example, but there will be others around the energy supply chain, around energy development itself, where we would obviously be keen to get as clearly possible a timeline from industry about when they expect to be able to come forward with that. Some of that is also going to be dependent on factors out with their control and out with our control, one of which being, as I said earlier, one of the greatest potential barriers to our renewable energy capability, which is access to the grid, both for energy development but also offtake from the grid for particularly energy intensive supply chain developments, as an example. Those are key considerations. I know that UK ministers and regulatory bodies are cognisant of that and understand the need to accelerate investment in the grid to ensure that we are able to respond to the opportunity that we have before us. Thanks, Bob. Mark, I think that you have some questions and then Monica. Yeah, it was just a follow-up about that pipeline in relation to on-shore wind projects. Because I remember reading in the draft energy strategy last year that it appeared to be quite clear how we are going to meet that 2030 target for doubling on-shore wind. About half of what we needed, slightly more than half of what we needed, was already in the planning system and slightly less than half of what we needed had already been consented. I am just trying to understand what that big bulk of work is for planners that we do not understand at this point. If that holds true, then pretty much everything that we have already in the system is going to meet the target. I do not know to what extent the on-shore wind pipeline has developed in the last 12 months since the on-shore wind sector deal and whether we are seeing far more applications coming forward or whether there has been a reduction. It seemed that there was certainty in the draft energy strategy about what was coming down the pipeline. I am just interested in your perspective or Susie's perspective as to whether that has changed in the last 18 months. Clearly, the on-shore wind sector deal has been fantastic for the industry. It has been a major thing that the Government has put forward. I expect Mr Ruskell to be correct. I would need to go away and check to see what the update is with regards to the proportion of our 2030 target that is either in train that is in the planning process or in delivery from where the draft was to where we are now. I am happy to look at whether there is an updated figure on the proportions. His assessment of the importance of the on-shore wind sector deal is also correct. The industry has welcomed it. It is not just important for industry and the development of on-shore wind. It is also critically important for communities so that we see demonstrable benefit and for people to have voice on those projects. The on-shore wind sector deal, in spite of the fact that we do not have the power to enforce it upon developers, commits the industry to consult with communities where there is going to be an application at a much earlier stage. It means that there can be potential mitigations or changes to the way that the layout of the application comes forward so that it answers the community need. It also critically commits the industry to the Scottish standard on community benefit, which is £5,000 per megawatt generated. We cannot mandate it, but it is committed to and is an important leading principle that we have. We are looking to work with industry through SOEC and various bodies to ensure that community benefit is also strategically deployed. We are seeing the maximum economic regeneration and economic development coming from that finance so that communities who have energy and infrastructure on their doorstep can see demonstrable impact for having had that. I declare an interest in that front. I have a substantial wind energy projects in and surrounding the community that I represent in the urgent shots. I can already see some of the flow of money coming through from that and the community having a real agency over how that is deployed, which is incredibly welcome in what we need. The only thing that I would add to that is that community benefit is obviously a hugely important part of the just transition. Previously, oil and gas supply chain companies are now moving into being much wider energy supply chain companies and they need that flow of projects in order to make that transition. It is important in economic terms as well. I think that there is more information about how that pipeline is shaping up than that. I think that the point is that anything that can be shared with the committee in advance is always helpful, as a result of the session through the class. Monica, you have some questions as well. Thank you, convener. I will go back to Ben Macpherson's important question about resource for our planning authorities, given that there is an imperative to speed up consenting for our new energy projects and that the planning profession is really important for growing the wellbeing economy and achieving that just transition that we all want for workers and communities. I will declare him a former member of the Royal Time Planning Institute for Scotland, but I am quite worried by recent data from RTPI Scotland. I think that what you said out, cabinet secretary, is quite optimistic in terms of what the budget might be able to do to address the question that Mr Macpherson asked, but we know that in planning authorities we are losing staff, we are losing budget and RTPI Scotland is saying that their latest analysis of data about planning resources in Scotland shows that the public sector workforce, this is for planners, is at the lowest level in five years. The recent figures that we have for 2022-23 show that we have a head count of 1,205 public sector planners in those planning authorities. In terms of the budget that you are proposing now, will that figure increase? First of all, I recognise the interest and the role that Ms Lennon has played in this front and her understanding of the situation. What I am keen to do is to see and to express on those people who are making career choices, the importance upon the planning system in us realising our economic goals. There are going to be huge projects and opportunities coming forward where planners are going to play a central role in ensuring that our economic opportunities are realised. As she rightly points out, the wellbeing economy can be progressed, so my encouragement to people considering what career path to choose would be to look at planning as being an area where you can make a real difference in shaping our society and ensuring that we are delivering for communities. First of all, planning authorities are funded through the resource that is provided to local authorities in general and it is for local government to determine their own allocation to their own planning departments. However, the second point that I was making in response to Ben Macpherson was around what more we might be able to do to provide support to planning authorities and to ensure that we are able to provide as much certainty as possible on the speed of some of the decisions being taken so that we can provide certainty to not just potential investors but also communities where we have planning applications in. I cannot give an overall figure about whether or not this is going to go up and down because some of that is going to depend along upon local decision making as is correct, as is the way it should be. However, we are looking at what more we can do to support a faster process happening in planning and there are discussions on going about to what extent that would require resource, whether it would require other interventions to provide support to local planning authorities. I think that it would be worrying if we saw a further reduction in the planning head count but I just wanted to briefly touch on the fact that we do welcome previous committee that the Scottish Government has committed to widen access to planning profession through the introduction of a planning apprenticeship, which we have seen work in England. The other thing that has been done in England, if I look at my notes here, is that last year they brought in a £5,000 bursary to encourage people to come into the planning profession through the master's route because we know in Scotland as well that it is getting harder to find an entry point into planning as an undergraduate. This was part of the levelling up scheme, so you talked about putting a saltire in the ground. Is there anything that is going to signal not just a sentiment that planning is a workable profession but are there any incentives coming forward to make sure that we have a pipeline of planners to do this work that you are so committed to? First of all to acknowledge the initial point that Monica Lennon made around any further reduction in the planning head count would be worrying. It would be very difficult and challenging for us to be able to realise what we are wanting to from an economic perspective in terms of getting through the applications that we need to if we saw a further reduction. That is why we are looking at what might be possible and the suggestions that Ms Lennon has suggested will be part of the considerations that we are taking forward to see if there is anything more that we can do beyond the appeal that I made in response to her first question about the central importance that planners play and giving voice to the great work that our planners do but also whether or not there are any other incentives and supports that can be provided to planning authorities to provide greater certainty on how quickly we can process some of those applications. I apologise for going back on something that I raised earlier, cabinet secretary, but it was great to hear that commitment that considerations will be on-going as to whether further resources are required to assist local authorities with their planning processes. I just wanted to get an indication for yourself if that is also the case within the Scottish Government and its agencies, particularly Marine Scotland and NatureScot, if more resources are required in those bodies in order to speed up the process and provide a greater number of individuals with the necessary expertise. Is that something that is on your mind? As I said, local government has agency and decision making powers on the level of investment that they make in their planning departments. First and foremost, we are obviously looking to make sure that there is an encouragement to ensure that there is a protection of planning budgets to ensure that those local authorities also reap the economic rewards that come from having a good planning system and taking advantage of the investment opportunities that come through there. In terms of the Scottish Government's own resource, that is under constant review around the human and financial resource that is committed to our consenting regimes. We have got a direct commitment for having the consenting time on onshore wind. That is part of the onshore wind sector deal, so we will need to ensure that that is reflected in the human resource committed to ensure that that can be realised. It does seem from my experience that those agencies are under some pressure even now, so I am glad that that is your consideration going forward. I would say that all public bodies are under significant pressure from a financial and human resource perspective. I do not think that any aspect of the public sector is going to be immune from that given the budget challenges not just this year but a decade and a half of austerity. The impact that that has is cumulative and is going to be felt by public bodies not just here in Scotland but across the UK. We are looking to do what we can with the very challenging financial settlement that we have been given to prioritise that best we can to have maximum impact, but we are not going to be able to mitigate everything and every challenge that comes as a result of a decade and a half of austerity. I appreciate that the growth in off-shore and marine renewables is moving at a pace that is perhaps out of kilter with the time required to build up the expertise, so there is a challenge there, but I am glad that it is something that you are focused on making a difference. Mr MacPherson's assessment is correct. I am moving on to hydrogen now, cabinet secretary. There was a hundred million pledged for the sport of green hydrogen during this parliamentary session, and it looks like only 7 per cent of that has been allocated so far. Can you set out how the rest of that money is going to be allocated? We have had to take incredibly difficult decisions because of the financial settlement that we have received and, in particular, we are going to, as the Deputy First Minister set out, we have seen a reducing capital budget from the UK Government, reduction in financial transactions from the UK Government and a real-terms cut of almost 10 per cent coming forward in future years. That has had a direct impact on what we are able to spend. It goes without saying that we cannot spend what is not there, so I have had to take a very difficult decision, and that has been prioritising our commitment to offshore wind supply chain, which I believe will help to catalyse some of the projects that will see hydrogen continue to be developed. There is also the hydrogen innovation scheme that continues its operation, and we are continuing with the Scottish Industrial Energy Transformation Fund, which also has the potential to look at decarbonisation of heavy industry, including through the generation of hydrogen. There are still huge opportunities available, and hydrogen is incredibly well placed to take advantage, particularly of green hydrogen. There is a huge market for that. We know that there is significant interest, particularly from Germany for a fixed link. Hydrogen is absolutely going to play a critical role, and I want to see its development happen as quickly as possible. However, where we are faced with falling budgets having to take difficult decisions, I have had to prioritise the offshore wind supply chain. You are saying that, cabinet secretary, from that 93 million that was still due to be spent during this parliamentary session, that is not now going to be spent. Is that a way? No, I have not said that. There is still an opportunity going forward in this parliamentary session for hydrogen investment to come through and the hydrogen fund to be there. What I am saying is that, for this particular budget, I have not been able to prioritise money against that budget line, and that is because I have chosen to prioritise ensuring that we kick start the offshore wind supply chain commitment, the £500 million commitment from the First Minister, partly because I believe that some of that will help to catalyse hydrogen projects, but also because there are other routes by which we can see continued hydrogen innovation happen, the hydrogen innovation scheme and the Scottish Industrial Energy Transformation Fund being two examples. In late 2022, reading the Scottish Government website, it said that the next tranche of hydrogen investment would be early 23. I am not sure if that happened or not. In September, in a response to a question, it said that the next tranche of hydrogen investment programme up to the £90 million will launch later in 2023, so I presume that that did not happen as well, Cabinet Secretary. From what you are saying just now, because you have had a difficult budget, which I understand, you have had to re-proutise. Does that mean that there will not be a next tranche in the upcoming budget term? That is correct. Okay, thank you. Thanks, Cabinet Secretary. I have a few questions, actually. As a result, I should actually say that last week I had a very interesting visit to hydrogen works at Heriot-Watt University, which I did on behalf of the committee. Some of the things that you have said this morning echoes exactly what they said that private investment is needed, and it appears that private investment is there. Some of the problems with hydrogen going forward in the future is grid connection. My question to you, Cabinet Secretary, is part of the option agreement that you have done with Scott Wind. How much of that electricity that is generated offshore as part of Scott Wind have you stipulated should go into electrolyzers, not into the national grid, to allow hydrogen to be developed in Scotland? That is definitely an option and something that we are exploring as being an option for the Scott Wind developments. There is complexity there, as I assume you are aware, convener, that at the moment the technology is nascent in terms of offshore electrolysis, so you would still be transferring the electricity onshore at the minute in order to see that electrolyzer capability happen. However, there is work under way by some of those developers, by some in the industry to see whether or not offshore electrolysis is possible and can be pulled forward. That would be of particular interest to me because of the interest in Germany for a fixed pipeline between Scotland and the continent, which I believe has a huge potential to see hydrogen production and investment continue and would take the pressure off the need for onshore transmission infrastructure of electricity into the grid. There is a win-win situation there, but your assessment is correct that we are going to need significant private investment. That is part of the reason why we are trying to do with our finances and the finances that are available to us is to try to catalyse some of that so that we can de-risk some of those investments using the public finance as best as possible. That is why the green industrial strategy coming forward before the summer is going to be so important in pointing the direction of travel where our supply chain finance is going to be directed so that we can give certainty to the industry. I do not want to prejudge that in terms of where the work on the green industrial strategy is going to come out, but I think that you would be surprised—I certainly would be surprised—if Scotland was not right at the top of the priority list there. I am interested that there is an option to put it in the option agreement, but that option has not yet been exercised. The option agreement is for a project that is significantly far away at the moment to allow the energy to catch up or the electrolyzation of the power to hydrogen offshore. I think that it was very much a clear message that I got on behalf of the committee that the Scottish Government can kickstart private investment by making sure that there is the incentive to do it by ensuring that a percentage of the power goes to hydrogen and not purely to the national grid. It does not have to go straight to the national grid from offshore. It can go onshore through different supply routes to electrolyzation plans. There are also UK Government interactions here as well. I am keen to see more work done on the transportation storage and the regulation that is required for hydrogen to come forward again so that we can provide certainty to the industry around what the expectation is going to be, but also to see if the UK Government is as committed as we are to seeing that fixed link, because that is what is going to make the difference. If investors and developers know that there is that market and a route to market, that makes a substantial difference in terms of their investment decisions. A fixed link is going to be a transformational element there. There are going to be differences of opinion on this as to what hydrogen, particularly green hydrogen, is going to be used best for. I think that the opportunity that we have before us in terms of industrial decarbonisation, in terms of the decarbonisation of transport, the potential for the decarbonisation of energy, as well as the export potential makes green hydrogen a big opportunity to come forward, largely going to be dependent on how we get on with the development of Scotland as well. I would just make the observation, do not worry too much about the fixed link to Germany. I think that the Highlands would say that they would prefer pipes over pylons, so maybe there is scope there. Listen, I think that that is a very fair point and one that I am very cognisant of. The issue is how we use it and where it can be deployed and what is possible from it and do not underestimate the opportunity that comes from an export of some of that hydrogen, because it also catalyzes the wider hydrogen industry that allows some of the other offtake to happen. I am not going to come back with a comment on that, but Mark Ruskell is. Interesting discussion there and I suppose the question that follows on from that is where you see green hydrogen right now within the context of this year's budget. Are the market opportunities there near market or are we still looking at real far market opportunities? I suppose looking at the hydrogen innovation scheme and just what has been funded already, there are some really useful, interesting feasibility studies there for quite small scale application of green hydrogen, but it feels to me a lot of that stuff is about demonstrating it, demonstrating its value and it does not feel like the full commercial opportunities are here, right here, right now. So maybe that goes back to your comment about offshore wind and strategically what is that focus and what is that focus then for green hydrogen perhaps in a longer term. I think that Mr Ruskell is right that the investments that we have made so far are around demonstrators but also testers as to the viability of some of these potential uses. I am thinking of the work that has been done in Orkney by EMEC to demonstrate the green hydrogen being able to power the harbour infrastructure for the ferries there while they are dockside, or indeed investments that have been made in Fife around the demonstrator for the potential for green hydrogen to be used for an alternative energy supply. The potential that we have for green hydrogen is massive, particularly for industrial decarbonisation but also potentially for export and for transport decarbonisation. There is a difference of opinion pretty widely across industry as to whether or not green hydrogen or hydrogen in general is going to be best used and deployed for alternative household energy consumption. But I think it is important that we continue to invest in those demonstrators to demonstrate whether it is viable. Work with some of the organisations that have an interest here such as the gas grid and its regulators and see what is best deployed or what green hydrogen is going to be best deployed for. Some of that work, some of that thinking is going to come through in the green industrial strategy but also the energy, the completed energy strategy and just transition plan will also I believe feature some of this work as well. But for this year's budget the focus is offshore wind building up the capacity and supply chain and that's where the jobs are going to come from. Yes, yes, from a hydrogen space but although I go back to the fact that the hydrogen innovation fund and the Scottish industrial energy transformation fund is also going to be continuing so there are still routes by which we're going to be investing in hydrogen projects. Right, okay. Thank you very much, Jackie. You've reached very patiently for your questions. Sorry, Susie. We're really pushed for time so briefly, very briefly. Just to say there is an additional fund that's also continuing to support hydrogen which is the energy transition fund which supports work on the Aberdeen hydrogen hub but also to the NZTC on the hydrogen backbone project. Okay, noted I think would be the answer. Jackie. Thank you, convener and I'm nothing but patient. I'm going to ask a couple of questions regarding the carbon capture and storage and I think it would be remiss of me as a northeaster if I didn't take the opportunity to ask you about the ACORN project. Are you able to give the committee an update on the latest development on where we are with the ACORN project and I'd quite be interested to hear your views on what the impact has been with the project in regards to the delay from the UK government in approving the project in the first instance, if any. I think Jackie DeBarn recognise how considerable interest in this area as there will be across this committee and wider across Parliament. I had a really productive meeting with the Scottish cluster at the end of last year and their planning and working continues on the development of CCUS. I think the encouragement not just from the cluster but from government is for the UK government to move forward at a greater pace so that we can realise the opportunity from a net zero but also an economic perspective. Our assessment is that our GDP could increase by 1.3 to 2.3 percent which is a substantial amount through the utilisation of CCUS but for the UK government to come forward in a much faster way on confirming track 2 status and the industrial emitters included etc etc because that allows us to ensure that we have those strategic discussions with the cluster around where we can provide support. I've spoken previously about the commitment that we have there but also so that we can ensure that we are reaching our net zero ambitions for 2045 because carbon capture is going to play an incredibly important role in that and if we miss the opportunity of which there's going to be great competition around the world for some of this capital then it will be to our detriment not just from a net zero perspective but from an economic perspective as well. In regards to the support, I think 80 million has been pledged by the Scottish Government for CCS support in Scotland. Can you maybe outline some of the conditions that are needed to be met before that pledge is released or has it started being released? Mr Barsh, correct. We have that long-standing commitment to continue to support carbon capture is triggered by the decisions that are taken at UK Government level as I'd set out previously around the furtherance of the track 2 but also particularly on the industrial emitters that are going to be included and that's why we continue to engage with the UK Government on making progress there and encourage them to do so in a timuous fashion so that our commitment can be realised but also so that we can realise our obligations to meet our net zero targets not just ourselves but the UK net zero targets as well because the Scottish cluster is going to play a very important role for the UK to meet its net zero ambitions as well not just the central role that it will play for Scotland's ambitions so we need to see faster progress there and I'm sure it's something that the committee will be interested in exploring progress with the UK ministers as well. I think we heard from the UK minister before that the Scottish cluster was vital for them to meet their net zero targets. I would concur. Back to you, convener. Thank you very much, Jackie. Douglass, I think you've got a question. Yeah, thank you. Just to follow up on something that Jackie had said. In terms of £80 million that's been committed, is there any of that in the 24-25 budget? No, there isn't a budget line there. Mr Almondson would be correct to that. That commitment will obviously not be for a single year, it will be for negotiation dependent on what is the requirements of the cluster and is going to be triggered when the UK Government takes its decisions around track 2. Okay, and moving on. Can I just check as well obviously the closure of the Gravings Bikes Refinery is a big short but that doesn't affect the ACORN project is all is that? Correct. No, it has no bearing. It has no bearing on the viability of the ACORN project. Even if we move to an import terminal, there will still be and the refinery is obviously just one part of the Grangemouth cluster. There are significant industrial emitters on the wider cluster at Grangemouth and even if we move to an import terminal as opposed to a refinery, there is still going to be flaring that will need to be captured, so that has no bearing whatsoever on the viability of the cluster's application. You mentioned other emitters, so has that been worked on on analysis on how many large emitters Scotland has to make sure that the ACORN project is still viable or is that work that's ongoing? It's there. The Scottish cluster has that work in hand. We've also done our own work and I can again pass on further information around the industrial emitters that we're aware of, the work that needs to be done in order to see that decarbonisation happening. I'm happy to provide that further information to the committee. Okay, thank you cabinet secretary. In terms of, obviously, ACORN is going to be important to the north-east so is the just transition funding. I noticed that that next year is going from £50 million down to £12 million. Can you give us a little bit of the impact that will have? Will that £12 million be for projects that have been approved already and the funding was maybe multi-year or will that £12 million also be used for new projects coming forward? Forgive me, convener, that the just transition fund is out with my area of responsibility, but I'd be happy to make sure that the committee can be furnished with further information as to any impact assessment that's been carried out and indeed the further work that we're doing to ensure that we invest in the just transition. On behalf of the committee, it is out with your funding. You mentioned just transition in your opening speech, so there's obviously confusion on all points. Douglas, have you got anything else? Just that working with industry is going to be key going forward as well, cabinet secretary. I've noticed that a letter from the chief executive of Ethica that went to the First Minister talking about energy transition. He states in here that Rosebank's £8 million investment is welcome but also disappointed that no Scottish minister has given any sign that the jobs are likely to be supported in Scotland by this project are welcome. He also goes on to say that the domestic oil and gas production fallen by 70% from its peak pre-evolution and they've explained many times to ministers and officials so it's disappointing to hear the language of unlimited extraction still used by the First Minister and other senior ministers and he also says without support for oil and gas a human capital and supply chain will be lost to the booming energy sector opportunity overseas thereby slowing down the energy transition. Do you accept at that that comments that basically the narrative that the Scottish government is using towards oil and gas will in fact slow down our energy transition? I'm sorry, I'm going to say that slightly with the budget scrutiny but I'll allow you to briefly come out. I'm happy to give a brief response. First of all without referencing any particular project, the central importance that the traditional oil and gas companies will play in securing our energy transition is clear. I've already stated we cannot make that just transition happen without private capital. A large amount of private capital is going to come from energy companies who have traditionally been involved in oil and gas. We're also going to need the skills, expertise and volume of people that have been working on oil and gas to transition to renewable energy. I absolutely very much welcome and value the work that those workers have done to date and appreciate the ongoing investment that is going on from traditional oil and gas companies into new energy technologies and it would encourage them as the First Minister and I did at an offshore energy UK round table last Monday to move faster and to show where they are making those investments so we can see that it's demonstrated. There are various projects that are ongoing from traditional energy companies in oil and gas in renewable energy that demonstrate the just transition happening and the movement of workers from the oil and gas industry into renewables that demonstrate that the just transition is happening. My keenness is to see that happening quicker for it to happen as quickly as possible and we'll work with anybody that will help us realise that goal. I think we've taken up Mr Lumsden as far as I'm going to allow you to take it in this session and just looking around I've got a couple of questions but if there's nothing else I'll go straight into those. Mr Gray 801 and 802 how much have you put aside for paying for them next year? There's a specific line in the budget I can't remember the exact 42.5 million that has been set aside for this financial year. Is that all that's going to come out? Are you confident that the meeting I think taking place at the end of this week is going to ask for more money? I certainly hope not and the visit that I had to the yard and the meetings that I've had both with the chair and the chief executive and indeed with the shop stewards and the senior staff has emphasised that there is a need for us to deliver these vessels as quickly as possible. I don't want to see any further delay but also the importance upon ensuring that there is financial probity and ensuring that we are bearing down on costs and I don't want to see a further cost over and obviously I cannot guarantee that depends what comes through at the meeting at the end of this week but I've stressed upon the board, the chief executive, the financial situation that the Government is in that we've all heard and been pouring over today that the availability of further resource is limited and they need to be ensuring that they're bearing down on costs and we've pushed as hard as I can and the First Minister has on not coming forward with any further cost overruns. So just on that basis is 42.5 million, what's the Government paid for 801 and 802? What's the total cost? So I'd be happy to provide the full figure once the meeting has been had at the end of this year. Obviously the figure that we're giving for this year, the 42.5 million, is recognising the fact that 801 is at an advanced stage and so is a reduction from what we invested last year and the updated cost to complete figure I think is 130 million for 801 and 110 million for 802. It would be very helpful for the committee to understand those figures and have them post the meeting including all the costs that were pumped into the yard to keep it open. On that basis how much are you giving to the yard next year or this budget year to allow it to compete for further contracts or are they just getting the 42.5 million and then you're cutting them loose? No that's a separate discussion that's underway. There was an application for capital investment to see the yard updated and to be able to allow it to be more competitive. We want to see greater productivity at the yard to allow it to compete on its own merit for further work. There are various strands of work on going to try to secure further work and there are specific conversations happening to update the business plan and the financial model around potential further capital investments to be made to ensure that they comply with substantive control and those discussions are on going and we're working directly with them on ensuring that they can be compliant. So I think they asked for 25 million and the business case wasn't justified so you didn't give it to them. I think that was my understanding. It was around that figure and it didn't comply with what we would expect from a commercial market operator test which is what it fell at that first legal hurdle that we have to have a consideration on for substantive control. Is there any money in the budget for the yard or is it just something you're going to draw down from Scotland? No that's going to be a discussion to be had based upon the finalised plan that comes forward from the yard and then we'll have a consideration over whether we can finance it and where that finance would come from. So I'm asking where that money is coming from. That's what I'm saying that's going to be a separate consideration. It's not in the budget. It's not set out in this budget. No it's going to be a separate consideration based upon whether we can, whether the substantive control rules will allow us to based on what comes through and then we will seek to find finance to allow that to happen. So the reprofiling of the small vessels project that the Deputy First Minister talked about which removed about 30 million from the budget that might have gone to Ferguson Marine might have kept them afloat but that's not going to happen is it? I don't think that is a correct assessment no. The crucial factor in the small vessels program again direct award is only allowed in very limited circumstances and we also want to bring up the productivity of the yard in order to allow it to compete for future work such as a small vessels program. Those considerations are on-going but the critical factor therein is whether or not we can legally come forward to direct award and that is not something that I have a direct responsibility for as you'd appreciate. So you can't do a direct award is what you're saying? No the 25 million that they needed will they said at that stage they needed to get the yard fit for the future means that they probably couldn't guarantee on any work from the government post that? No no I think you're conflicting two issues there with respect. One is getting the yard fit to compete for future work and another is whether or not we can do a direct award. Those are separate considerations. I understand that. Yeah the first consideration on whether we can legally come forward with a direct award that is going to be considered as part of the procurement process. The second element on whether or not we can invest into making the yard more productive that those conversations are on going with the yard to ensure that their business plan that comes forward passes that first hurdle of the legal test around the commercial operator test around whether or not we would pass subsidy control rules and then it's about whether or not it's the right investment to make whether we'd want to do that we then find the finance to to come forward but remain I remain the government remains committed to Ferguson Marine to delivering Glen Sannocks and Glen Rosa in as speedy a time as possible because we've got island communities who are in desperate need of these vessels coming on stream and we also remain committed to doing everything that we can to ensure the future of commercial shipbuilding on the Clyde which Ferguson Marine is going to be central to. So if they asked for 40 million you'd consider that would you? We would consider it alongside the assessments that we have to take around whether or not it passes subsidy control whether or not it passes the commercial market operator test and whether we think that that would help them to be productive to win future work on their own merits. Okay and it's not in the budget and you have no idea where it's coming from? I said we would if we come forward with a plan that we think passes those tests allows us to invest then we would look to find that money to ensure that we can invest in the yard but you have no idea where it's coming from? It would come from within the Scottish budget somewhere but it's but we're dealing with hypotheticals based on a business plan coming forward based on whether or not that passes a subsidy control test and whether or not we think that is a prudent expenditure we have to make sure we get through those hurdles and there was at least a stage of hypotheticals. Okay seems a lot of ifs there thank you anyway the committee is going to take further evidence on the budget next week when we'll hear for the cabinet secretary for transport net zero and just transition and the cabinet secretary for rural affairs land reform and the islands on matters relevant to our remit that concludes our part of the public meeting and we will now move into private session.