Scottish Government outlines ‘step change’ in infrastructure investment

The 2018/19 Programme for Government commits to raising Scotland’s infrastructure spending “to internationally competitive levels” and exploring new investment models for infrastructure projects. 

4 September 2018

In early September, the Scottish Government outlined its Programme for Government 2018/19 in a document entitled, ‘Delivering for today, investing for tomorrow’ - setting out its key objectives and spending commitments for the coming year and beyond.  

Specifically on the infrastructure sector, the Programme for Government includes a commitment “to raise Scotland’s infrastructure spending to internationally competitive levels” and to explore new investment models for infrastructure projects. 

Introducing the Programme, the First Minister said the infrastructure spending commitment would raise investment closer to being on a par with other G7 countries, which the UK has traditionally lagged behind.  

This is captured in a commitment to increase the annual infrastructure spend in Scotland by around 1% of gross domestic product by the end of the next parliament –  equivalent to an additional £1.5 billion per year compared with 2019-20 levels, and estimated at around £7 billion of extra infrastructure spend by 2025-26. 

The Programme states this will be “a step change in infrastructure investment that will deliver a long-term boost to Scotland’s economy”, and specifically references direct investment in housing, schools, hospitals, transport and digital infrastructure, with faster broadband, improved transport and low-carbon energy solutions singled out as a particular focus for infrastructure spending.

The Programme includes a clear focus on low-carbon investment, including £15 million allocated to add a further 1,500 charge points for electric vehicles, the creation of at least 20 “electric towns” across Scotland by 2025, and increasing the low-carbon transport loan fund from £8 million to £20 million to support individuals and businesses in switching to electric vehicles.

In addition, the Programme commits to providing support for 750 new, extended or refurbished nurseries through a £1 billion funding package that forms part of the Scottish Government’s wider commitment to double the provision of early learning and childcare.

The Programme for Government, and the First Minister’s statement, place an emphasis on infrastructure investment as being key to building and strengthening Scotland’s economy.

The detail around the infrastructure investment proposals will be set out by the Cabinet Secretary for Transport, Infrastructure and Connectivity over the coming months and, whilst the Programme for Government does not specifically highlight any investment models, it does flag the need to “continue to innovate in our models for investment”. 

The First Minister confirmed in her address that, in addition to traditional capital and borrowing, the Scottish Futures Trust would examine new profit sharing finance scheme’s, such as the Welsh Government’s mutual investment model.

Following last year’s announcement on the intention to establish a Scottish National Investment Bank, the current Programme for Government includes a commitment to introduce legislation in the coming year that will underpin the establishment and capitalisation of the Bank, with the aim that the Bank will be investing from 2020.  

The Programme also provides a commitment for the Bank to provide at least £2 billion of investment in its first 10 years.

A link to the Programme for Government 2018/19 can be found here.  

The First Minister’s address to the Scottish Parliament setting out the Programme for Government can be found here.