Meeting of the Parliament 30 January 2025
The budget theme pursued by the Net Zero, Energy and Transport Committee this past year has been on whether major public spending decisions are in line with the balanced pathway to net zero modelled by the Climate Change Committee. Our scrutiny has been of the big-picture variety in many big spending areas of energy and transport. Budgets are about tough choices; given that I have six minutes, that applies to this speech, too, so I can run through only the main areas that the committee discussed.
Turning to the energy portfolio, one of the headline commitments is the increase in offshore wind supply chain funding from £10 million to £163 million. We have seen genuinely impressive progress in offshore wind in recent years, but there is still a feeling that it is an opportunity partly missed, with not enough value added domestically, especially in manufacturing.
We would like to know what Scotland’s percentage return on that investment is. If that investment is good news, the other side of the coin is the use of ScotWind revenues for general spending. I will not use this speech to enter into the debate on whether the Scottish Government had no choice but to dip into the fund. I will simply say—I hope that I am being objective—that it was not good news. It communicated a skittishness rather than consistency in the Government’s long-term financial commitment to growing the green energy sector. In January, the acting cabinet secretary expressed what I understood to be a commitment to replenish that funding source. The committee will be watching to see what that actually means.
This session of Parliament began in 2021 with big questions about the roles of industrial-scale electrolysis and carbon capture technology in the energy transition. Four years on, we are no wiser, which I have to say is frustrating. On the Acorn project, I recognise that decisive movement is needed on the UK side. However, the £80 million publicly committed by the Scottish Government remains unspent. The cabinet secretary gave us the reasons for that, so I will just leave that there.
As for green hydrogen, the Scottish Government must ensure that its commitments match up to the ambitious rhetoric. There are indeed technical challenges in scaling up production and establishing network capacity in the area, in respect of which seed funding could make a real difference. The Scottish Government’s announcement earlier in the parliamentary session of £100 million of support for the sector sounded impressive, but the vast majority of it is still unspent. That raises questions. Are the obligations in respect of the strings attached to the funding too onerous? Is there a problem with finding projects worthy of funding? I am keen to understand better what the blockers are, given that we all want a flourishing green energy industry. I hope that the committee can consider that further before the end of the session.
Transport accounts for more than a third of Scotland’s emissions. There is a job of work to be done to accelerate the switch over to electric vehicles and to get people in their hundreds of thousands to exercise a positive choice to use buses, trains, bikes and, indeed, their own two legs. Does the budget communicate that urgency? To take one strand, the Bute house agreement promised that 10 per cent of the transport budget would be allocated for active travel by 2024-25. That would translate to £320 million in the 2025-26 budget, but the amount this year is only £188.7 million.
On public transport, this financial year has seen the end of reduced fares for peak travel. Buses remain Scotland’s most used public transport, but uptake has declined by 25 per cent since 2006. The Government has allocated £440 million to concessionary travel, but there is less than £50 million for the network support grant that helps to keep less-used services running—we risk losing more routes.
On electric vehicles, the Scottish Government has committed to 24,000 new public charging points by 2030. The number of charging points currently stands at somewhat more than 6,000, so, as anyone can see, meeting that target will be particularly challenging.
A recent SPICe blog on the budget highlighted that, across its responses to committees, the Government had described itself as “committed” no fewer than 56 times, but that details on delivery were sometimes very sparse. That echoes the Climate Change Committee’s comments last year that the Scottish Government lacks a credible delivery plan for its climate ambitions.
I understand that money is tight, and that is true across the UK. Barring economic growth and a bigger tax base, all budget decisions look big and tough. That is a daunting and difficult backdrop for a just and fair transition to net zero. The forthcoming climate change plan, which we will finally see in September 2025, presents an opportunity for serious thinking about how the Government can deliver the change more smartly and bridge the gap between ambition and delivery; it will need to make sure that it puts enough financial resources into the plan to ensure that that happens.