 Y Llywodraeth will take questions at the end of his statement, and so there should be no interventions or interruptions. I call on Richard Lochhead up to 10 minutes, minister. Presiding Officer, the UK Government introduced levelling up in 2020, signalling it as the central agenda for making the UK a fairer place to live and reduce inequality. The linchpin of this agenda, the levelling up fund, we were told seeks to improve everyday life across the UK. But after two rounds of funding, we see very little evidence that it's working. In fact, Bloomberg analysis released in January shows that only 3 per cent of Scotland is levelled up according to the metrics involved. That means 97 per cent of Scotland have felt little to no impact from the funding or the UK Government's intervention. So levelling up does indeed mean losing out for many of Scotland's communities. I want to lay out the evidence as to why that's the case. Firstly, there is the inept delivery of the fund that has left the most deprived areas without any awards. Secondly, there is the constitutional issue at the core of all of this, one that the Scottish ministers have raised time and time again, which demonstrates the disrespect that the UK Government has for Scottish devolution. This fund also exemplifies the UK Government's tendency to shift the goalposts for stakeholders, making decisions without consultation or advanced notice. The first of these occurred when they announced plans in their autumn 2020 spending review for the £4 billion levelling up fund exclusively for England, advising that consequential funding of £800 million would be provided for devolved Governments in the usual way. The usual way is, of course, via the Barnett formula for consequentials to allow expenditure in devolved areas. Through that, the Scottish Government expected to receive around £430 million, which we would have used in a manner that met the needs of all Scottish regions and supported work that promotes core policies such as community wealth building, tackling child poverty and regional economic development. Yet the introduction of the infamous Internal Market Act 2020 allowed the UK Government to backtrack at the last minute announcing in the 2021 spring budget without discussion with Scottish ministers that this fund would be UK-wide. The UK Government then kept the consequentials and used them to increase the fund to £4.8 billion and apply it directly in devolved areas. It is unacceptable and undermines the devolution settlement for the UK Government to use the powers that it has gifted itself through the Internal Market Act 2020 to bypass the Scottish Parliament and Scottish Governments in ways that could contradict and do contradict the devolved priorities of Scotland. It is concerning that, with approximately £80 million left for Scotland, we think that just under half of all our local authorities have yet to receive any support from this fund. Think about that for a second. £3.8 billion has been allocated from the levelling up fund by the UK Government and 14 councils in Scotland have not received a penny. It is the view of this Government that the remaining funding should be passed to the Scottish Parliament, as was initially intended, to enable targeted and focused support for those areas that are most in need of levelling up. Even though most of the fund, as I have just said, has been allocated, we could at least make the best of a bad lot. One of the most scathing criticisms of the levelling up fund came from the Conservative mayor for the West Midlands, Andy Street, who recently noted that this is just another example as to why Whitehall's bidding and Beggingbowl culture is broken. The sooner we can decentralise and move to proper fiscal devolution, the better. In Scotland, we could have used this funding in line with Scottish priorities. Recently published regional economic policy reviews, for instance, set out the trajectory for the future delivery of regional economic development and builds on the commitments made in the national strategy for economic transformation. We would seek to issue funding to regional partners in line with all the recommendations that were made by the experts who led that review. Those would deliver, for instance, the core strategic projects that matter to our regions, build capacity in our local authorities, support sectorial strengths, and create things such as intelligence hubs that have been proposed for every region. However, not only have the UK Government shifted the goalposts in the Scottish Government, removing expected consequentials without consultation, but it also treated our local authorities with the same disdain. Essentially, a note on the assessment and decision making process that is in quotations produced by the UK Government months after bids were submitted said that ministers had suddenly decided to take account of which local authorities had received funding in the first round, noting that that would help to maximise the geographical spread of investment across rounds 1 and 2. Put that in plain English, that meant that anywhere that was successful in the first round would not get funding in the second round, regardless of the quality of the bid that was submitted. However, at no point did the UK Government think to tell local authorities who had invested time and effort in creating bids that were not even going to be considered, so that lack of respect is astounding. Susan Aitken, the leader of the Glasgow City Council, confirmed in the article that she had in Herald that bidders were not told about this in advance, resulting in huge expense to work up the detailed and labour-intensive proposal. Councillor Aitken wrote to the levelling-up secretary, Michael Gove, stating that in the weeks leading up to the decision, and I quote again, "...your officials were in dialogue with ours and at no stage was there ever any suggestion that places successful in round 1 would not be eligible for round 2 funding." By not making this clear from the outset, Scottish local authorities have wasted time, effort and money developing bids that were ultimately dismissed on the basis of geography rather than need. It is not for Scottish ministers, of course, to speak on behalf of councils, but it is not unreasonable to suggest that many of them would have entered different projects in round 1 had they known from the outset that they would only be getting a single bite of the cherry. So, while Scottish projects have received 9 per cent of all awards from the fund of the 29 local authorities that submitted bids in round 2, only 10 were successful. At a practical level, however, social sector consultancy NPC noted last year that Scotland only received 3.5 per cent of levelling-up funding, despite having 8.2 per cent of the population. Scottish local authorities, with the highest homelessness rate, received less levelling-up funding in 2022 than those areas with the lowest. The UK Government claimed that this fund is about reducing inequality, but it has made it about geographical spread and, of course, as I have said before, than even a fail to achieve that. We know that it is not really about reducing inequality when we see the full picture of the awards. Rural and peripheral regions in areas of deprivation have not been prioritised or targeted by the UK fund. While it is not all councils applied to the fund, possibly due to the convoluted processes involved, five of the least well-off council areas in Scotland received no award from round 2. Glasgow, North Ayrshire, Renfrewshire, Oflanarchshire and Western Bartonshire are all ranked in the top 10 most deprived areas according to the Scottish index of multiple deprivation, yet were overlooked for funding in round 2. In comparison, nearly £40 million was awarded to some of Scotland's least deprived areas. It is difficult to reconcile the rhetoric of levelling-up as the great reducer in equality with the clip provided, for instance, by the new statesman in which the Prime Minister was captured last year, telling Conservative activists that, I managed to start changing the funding formulas to make sure that areas such as Tumbridge Wells are getting the funding that they deserve. Felly, of course, Mr Soonak's own wealthy Richmond constituency was awarded £19 million. How does this reduce inequality when Scotland's most deprived areas, such as Mary Helen Postle Park, had projects rejected? Or even my constituency of Murray, which did not receive investment for their bid, which involved a similar sum for a similar regeneration package for which Sherry Pym's backyard was given a successful award. It is also worth noting that the biggest regional recipient is the north-west of England, which received £350 million. Of course, it just so happens to be the red wall where the Conservatives are most vulnerable to losing marginal seats to Labour. That is compared to the whole of Scotland, who in comparison was awarded £177 million, approximately half that amount. Even a cursory analysis of the fund exposes that this is not about poorer communities to being levelled up. It is clear that this fund is nothing more than a dash for cash, where political glad-handing takes presence over meaningful, strategic and targeted investment for our poorer communities. Leveling up should not mean losing out, but it does. Again, recent Bloomberg analysis shows that, in 2019, 597 of the 650 constituencies were behind London and the southeast, and at least six of the 12 levelling up metrics were analysed. As I mentioned earlier, in Scotland, only 3 per cent of all constituencies were shown to be levelling up overall. As we know, levelling up cuts across many areas of devolved policies, such as transport, justice, culture, skills and education. We fundamentally disagree with the principle of the UK Government making decisions in devolved areas. In 2021, as I said before, the UK Government changed its mind on plans to confine the fund to England and deliver extra barnoc consequentials to the Scottish Government. Instead, it kept all the funding and is issuing it in a manner that fails to reduce inequality in any meaningful way. If we control the funding, we do the right thing with it and support Scotland's priorities. We will now invite the Secretary of State for levelling up Michael Gove to a face-to-face meeting in order to discuss the future of the fund, setting our intention to deliver true devolution through investment and accordance with our aim to create a well-being economy for Scotland. The IMF is forecasting that the UK will be the only major economy to contract in 2023. The UK economy is fundamentally on the wrong path, with no real alternative and offer within the current system. Communities have been damaged by UK policies such as Brexit and other UK budget decisions. The UK Government must have all the remaining funding to the Scottish Government so that we can see meaningful support delivered to regions and regional stakeholders bringing together public, private and third sector economic actors so that we can tackle inequalities within and between their regions. That would be true. Respectful partnership working between all areas of government and not the top-down, pergrabbing and ineffective funds that we see right now. The minister will now take questions on the issues raised in his statement. I intend to allow around 20 minutes for questions after which we will move on to the next item of business, and I would be grateful of all members who wish to ask a question where to press their request-to-speak buttons now. I call on Jamie Halcro Johnston. Thank the minister for advance sight of that statement. Although I would have hoped, if not expected, that it might be a bit more than page after page of reheated grievance, it is certainly 11 minutes. None of us are going to get back. Because, while the SNP might not be able to find anything positive to say, this levelling up funding has been welcomed in communities across Scotland. Councillor Emma McDonald, the leader of Shetland Islands Council, said, and I quote, it is no exaggeration to say that this funding from the UK Government has saved Fair Isle as an inhabited island. There would have been no other way for us to sustainably fund such a project. This is a truly great day for Fair Isle and for Shetland, and we are grateful for the honest, open and productive dialogue that we have had both with the Scotland office and the department for levelling up housing and communities throughout the process. Presiding Officer, councils across the country applied for support, including some run by the SNP, and many welcomed the very fact that the additional funding on top of Barnett consequentials that the Scottish Government already receives was applied for directly by local authorities and not funneled through the Scottish Government's sticky coffers in Edinburgh. The Minister failed to acknowledge that the percentage of funding received by Scotland is actually higher than the Scotland's percentage of population as a country with net beneficiary of this UK support. Will the minister recognise that this ministerial miserabilism from the SNP is in stark contrast to the welcome that it has received in communities across Scotland? Does he accept that communities across Scotland don't care where the funding comes from, and if the UK Government is delivering support where the SNP ministers aren't, then it's for the Scottish Government to step up? Does he recognise that the Scottish public want to see their two Governments working together and working with local authorities on issues such as levelling up funding and on city and regional deals and on issues such as free ports? What they don't want is more of this nonsensical grievance mongering from SNP ministers. I think that the member's question gets the heart of the two key issues here. Firstly, he mentioned the Shetland award, and no one in the chamber of this Government blames local authorities for applying for funding that the UK Government makes available. However, of course, he will know that, in round 2, with the Highlands and Islands being identified by the UK Government in the lowest level of need, only Shetland got an award. The rest of the Highlands and Islands didn't get a penny. Indeed, Argyllin butte, the Western Isles, and my constituency of Murray, out of the £3.8 billion announced by the UK Government so far, out of both rounds, have not received a penny. How on earth can the member say that that is levelling up? The second point is about the UK Government and the Scottish Government working together. Well, this mess would have not happened had the UK Government been willing to work with the Scottish Government. The irony, of course, is that the UK Government changed its mind and used the Internal Market Act to change its mind and devolve the consequentials to this Parliament and to this Government and decided to directly allocate and ride roughshod over Scottish Devolution. Unlike the Green Free ports, the UK Government is not willing to work with the Scottish Government on this issue. If it had, we might have got this right, and we would not have been in a position where 14 local authorities in Scotland missed out on getting a penny from the £3.8 billion announced for so-called levelling up so far. I thank the minister for advance sight. There is a gap of around a third in terms of earnings per hour work between the lowest and highest performing cities in Scotland. Indeed, five local authorities in Scotland have actually seen a productivity decline in the last decade. I agree that everything up-fund is insufficient compared to structural funds that they replace, isn't transparent and bypassed evolution. Indeed, my colleague Chris Bryant described it as corrupt, and I would not disagree with that assessment. Beyond city region deals, there is no locust or structure, particularly in Scotland. I note the report on 19 December from the regional economic advisory group. It states that there should be enhanced structures and autonomy for regional economic development. When will there be a formal response to that, and will there be a clear plan for regional economic plans with investment to back it up so that we can close that gap between our lowest and highest performing cities? I mentioned in my opening statement that I live in recommendations. It is my recent review of working with the regional partnerships and taking forward regional policy. That is the way in which we would have approached this issue had that money been devolved to the Scottish Parliament. We have worked with local partners, local authorities and got this right and made strategic intervention to address tackling inequalities and support local economic development in Scotland. However, there are a number of measures that we are taking. For example, we have the £325 million place-based investment programme, which includes the regeneration capital grant fund. We have got many other measures in place where we work with local partners and identify local priorities. However, many of those issues are reserved. Here, we have had the £349 million that we could have allocated in line with Scotland's priorities if the UK Government had not overridden devolution and allocated it directly, missing the targets and making a mess of the levelling up agenda. I welcome the opportunity to ask about levelling up in this chamber. As it is one of the central tenants that I understand, the UK Government's fund seems to be that it should bypass the Scottish Parliament entirely and avoid the inconvenience of democratic oversight. That is, of course, contrasts with decades of EU structural funding, which was allocated by co-ordination between the European Commission, the Scottish Government, local communities and delivered, for example, through the leader programme. Does the minister share my concern that Westminster has encroached on devolved responsibilities and failing to engage directly with communities? Emma Harper's Correctness is another example of the UK Government's aggressive approach to the constitutional settlement in the UK and readying roughshod over Scottish devolution, ensuring utter disrespect to this Parliament and the Scottish Government. One prime example of that is the fact that, if you look at European funding, which I think member referred to, it identifies, for instance, Scotland's rural areas and more remote areas as being areas of need whereby the UK Government, taking over the fund, changing its mind over devolving the fund to Scotland, decided that those areas are not in need. Those areas have the lowest need in Scotland, which is an outrageous position. As a result, much of the funding is missed out of those areas that are most in need in Scotland. Jamie Greene, to be followed by Kenneth Gibson. I feel sorry for the Government benches today. They've all clearly got out of bed on the wrong side this morning because not one of them has got anything positive to say about this fund. I know that my constituents on the west coast are pleased to have over £100 million invested in Inverclyde, North Ayrshire, Renfrewshire and Bartonshire. It's hardly Tory heartland, is it minister? Will he answer this question, though? We are still wheeling from the lack of support for our free port bid, and there is a clear lack of strategy from the Scottish Government over our marine infrastructure. Aside from that welcome at UK Government investment, we would like to see a clear direction of travel from this Government over how it's going to properly invest in our marine infrastructure underutilised by this Government. We want to see a strategy and we need it soon, minister. As I've said in previous answers, we will continue to work with regional partners rolling out some of the funding that I've already mentioned that's available from the Scottish Government, and indeed we will continue to make representations to the UK Government that their funds take into account strategic priorities in Scotland as well. When the member mentioned the welcome that some of the projects have been given in his part of the world, can I reiterate that no one blames local authorities for applying for funding that's made available by the UK Government? What we're saying here is that this was sold as a levelling up agenda and he has not been able to say when he was asking his question how these awards supported the levelling up agenda. There's many different funds with many different objectives. The purpose of this was to tackle inequalities across the country, target areas most in need and deliver a levelling up agenda, and clearly in most cases it's absolutely failed to do that. Kenneth Gibson to be followed by Pauline McNeill. Thank you, Presiding Officer. Not only is the UK providing less funding than Europe, the Institute for Public Policy Research has calculated that the UK Government's failure to inflation-proof levelling up funding has cost communities over half a billion pounds. Has the minister been advised as to whether or not the UK Government will rectify the shortfall and fill the inflation gap caused and part by the UK Government's own economic incompetence? Kenneth Gibson again highlights an important point, but I have to tell him we've had no feedback as of yet from the UK Government as to the future of the levelling up fund or taking into account any inflationary pressures or any other factors. As I said again in my statements, we are asking the levelling up secretary for a face-to-face meeting to discuss the future of the fund. I do suspect that they've been so embarrassed by the negative response to the fund throughout the UK, including from prominent members of the Conservative Party that there may be some doubt in the future. I don't know, but we wait to hear formally from the UK Government about its future. Pauline McNeill, to be followed by Claire Adamson. The minister rightly lamends the failure of Glasgow to receive funding despite the economic need that it clearly has in the sound of awards. However, how many pleadings does the Scottish Government need to hear from Glasgow business leaders about also being left behind by that and the rejection of the Clyde freeport bid with the highest levels of deprivation across the region? Does the minister agree with me and business leaders in Glasgow that Glasgow has strategic importance to the economy and it should be compared to cities such as Manchester? Is the Scottish Government going to recognise that we need a plan to enhance existing funding and support the failings of levelling up? Pauline McNeill is perfectly correct. On the importance of the city of Glasgow strategically to the whole of Scotland and the Scottish economy, I absolutely agree with that point. I think that she makes the Scottish Government's point for us in that we would like to do more to help the city of Glasgow, but when £349 million is supposed to be devolved to the Scottish Parliament and Government, we could work with Glasgow City Council and others to help the city's future, but then the UK Government changed its mind and decided to allocate it directly and reject some of the most important applications in those areas with the most need in Glasgow, then I hope that she appreciates the challenges that we face dealing with making sure that the resources go to the right places. Clare Adamson, to be followed by Willie Rennie. A significant proportion of the so-called levelling up money seems to have gone to wealthy areas in England such as the Prime Minister's constituencies. Meanwhile, post-industrial areas at Ravenskig, in my constituency, betrayed for decades by Conservative Governments, continued to be overlooked. Minister, I believe that this was a missed opportunity to write the wrongs of the past, and would you join me in inviting the Tory benches who have been talking about grievance all afternoon to come and speak to my constituents in Motherwell, and explain to them why they have been let down by Tory Governments yet again? I know that the members have rejected the Conservative Party at the ballot box for decades now, and I have no doubt what is over that set to continue in the years ahead, given their track records in that part of the world also. I can reiterate again that we would have liked the UK Government to have stuck to its word and devolved the funding, so we could have worked with the members' local authority and regional partners to deliver the funding that has been most effective and makes strategic interventions to tackle inequality and support local economic development. I get that the minister is upset that he has been ignored by the Conservative Government, but isn't he a little bit embarrassed that it has taken a UK Conservative Government to fund the lifeline ferry to the ferry out, which should have been funded by the Scottish Government years ago? However, why should councils be stuck in the middle between two feuding Governments and their inability to agree with each other? The reason why the Shetland Islands and our communities have to deal with two Governments is because Scotland is not independent right yet, and if we were, we would simply be able to get on with things and do the right things for Scotland with the powers of an independent country. I can always say to the member that he talks about one specific project, and he hails that project, and the local authority clearly, as I said before, at every right to apply for funding that is available. However, does he think that it is right under a levelling up agenda that the £27 million ferry and infrastructure for the ferail was the only project supported in the whole of the Highlands and Islands, which Europe and this Government and others think is one of the areas with the biggest need in Scotland for tackling inequalities and local economic development, but the UK Government deemed as the area with the lowest need? As the minister has mentioned, and it is worth mentioning again, out of the whole of the Highlands and Islands, only one of many bids was successful in this round of the UK Government's levelling up funding decisions. Given that my constituency previously quite rightly benefited enormously from EU structural funding, does the minister believe that the UK Government's watered down replacement for EU funding is equitable and for purpose, or does it just demonstrate again how far removed the UK Government is from the needs of rural and island communities? The member highlights how his own constitution has been missed out and deemed by the UK Government as an area with no need for levelling up so far, out of £3.8 billion allocated by the UK Government, not one penny, has gone to Allister Island's constituency so far. Of course, he is quite right to raise. That is not the first example of his part of the world being missed out. European funding is going to be in decline, and another broken promise in the UK Government to match European funding following Brexit. Of course, now we see what is happening for the levelling up fund. According to the UK Government, there is no need for levelling up in Allister Island's constituency. That is why we will make representations to the UK Government for the remaining £80 million or thereabouts that we believe is still remaining on the table that should have been before coming through consequentials if the UK decides not to hold on to that and allocate under its own warped formulas. I welcome the minister's call to devolve the remaining levelling up funding to the Scottish Government so that we can spend it on our own priorities. Round 2 of the funding yielded nothing for Highland Council and very few successful builds, as we have heard, in the wider region among the projects that missed out were plans to improve Portree harbour and improvements to the NC500 and harbours at Wick and Ullipool. Indeed, the vital area of transport connectivity is excluded from evaluations for Scottish projects. Does the minister agree with me that the current scheme is vulnerable to Tory cherry picking and fails to address rural inequality, especially in relation to transport links? Of course, I agree with the member for a couple of reasons. Firstly, the Scottish Government, as you know, was carved out of the process by the UK Government in allocating this fund. One reason that we made to the UK Government as to why devolved responsibilities should be taken into account and respected is the issue of transport with features heavily in the levelling up fund, but the UK Government refused to take into account or speak to the likes of Transport Scotland in looking at the strategic priorities that it has and the metrics that it uses for determining how to allocate transport funds. As a result, many wrong decisions were taken by the UK Government and the priorities of our local communities, particularly in the more rural communities, as Arlene Burgess mentions of the Highlands and Islands, were completely ignored. Alexander Stewart falls by Audrey Nicholl. In the statement that you indicated, minister, that this would have had better impact if delivered by the Scottish Government working with local government and communities. The reality is however, minister, that Scotland received 9.2 per cent of levelling up fund compared to 8.2 per cent in the rest of the UK per head of population. 18 out of 32 local authorities benefited from those funds, all welcoming the money that they are going to receive. Therefore, how can the Scottish Government maintain that Scotland is losing out when it is receiving more funding per head of population? The member may do well to remind himself that this was called a levelling up fund, not a dash for cash for those local authorities that could put the quickest applications together because they were given a limited window for which to apply for the money. As a result, we have the mess that we are dealing with now. It should have been a strategic intervention working with the Scottish Government and the member's local authority and regional partners, so we could have actually tackled inequality and support local economic development. The levelling up agenda has failed the whole of Scotland. As the minister highlighted in his statement, many local authorities, including Aberdeen City Council, invested a significant resource into preparing a comprehensive bid for round 2 funding, only to be told that, at the very last minute, they were not, in fact, eligible. Does the minister agree with me that the shambolic state of affairs should be rectified by the UK Government as a matter of urgency by refunding the significant costs incurred by councils that prepared unsuccessful bids? Does he further agree that the UK Government must provide urgent clarification on the criteria to be set for future funding rounds? Yes, I think the way in which local authorities were not informed about the change of rules shows utter disrespect to local authorities like Aberdeen and others who were unaware that those that had been successful in round 1 would not be considered for round 2. Given the tight financial constraints that all local authorities in Scotland and the Scottish Government face, it is a terrible thing to do at the time when every penny counts and public services are under such pressure to sit back and allow local authorities to waste, in some cases, hundreds of thousands of pounds applying for funds where the rules have been changed but they have not been told and, as a result, they did not have a chance of being successful. Paul Sweeney Thank you, Presiding Officer. Whilst it is certainly the case that the way in which this has been managed has been deeply regrettable and frustrating, particularly for Glasgow, the people's palace still remains derelict. No funding from Edinburgh for Glasgow's museums yet Edinburgh's museums are given national funding. The M8 is crumbling and that project for the levelling up funding remains as critical as ever. These are projects that have been business cases developed and are ready to go. They are shovel ready to quote the Deputy First Minister, so can the Scottish Government look to collaborate with Glasgow City Council to raise funding, perhaps through local government bond issues, or investigate other ways in which we can capitalise these projects, because they are needed as badly as ever? I can remember the people's palace from my youth and I am interested in the member's question, but I suggest that she writes to the cultural secretary about what options the Scottish Government may have or not given the current financial constraints that we all face. Quite simply, a lot of the investment decisions in Scotland are dependent on decisions taken by the Westminster and the levelling up fund is yet another example of where the wrong decisions are taken and where the devolution settlement in Scotland and, indeed, the other devolved administrations have been completely ignored and the UK Government has chosen to ride roughshod over Scottish democracy. That concludes a particular ministerial statement. There will be a brief pause before we move on to the next item of business.