To infrastructure and beyond: Scottish Government unveils £33bn Infrastructure Investment Plan

The Scottish Government published its Infrastructure Investment Plan (IIP) on 4 February 2021. This follows the consultation on the draft plan (Draft) published in September 2020, discussed in our previous article. The consultation attracted 147 responses, the majority of which were in favour of the approach set out in the Draft. The IIP now confirms a five-year plan for £33bn of capital investment that will support 45,000 jobs and build healthcare facilities, schools and local facilities across Scotland.

Strategic plan and vision

The IIP sets out a clear vision for future infrastructure: “to support and enable an inclusive net zero emissions economy”. This vision is underpinned by three themes: (1) enabling net zero emissions and environmental sustainability; (2) driving inclusive economic growth; and (3) building resilient and sustainable places. The IIP links these themes to Scotland’s National Performance Framework and the UN Sustainable Development Goals.

The IIP recognises that these themes are not independent from each other: for example, investing in a project which contributes towards net zero emissions could then also improve opportunities and outcomes in the place in which that project is based. However, the IIP states that the Scottish Government will “seek to prioritise investments which deliver positive outcomes across more than one theme.”

Expanded definition of infrastructure

The Scottish Government already adopts a wider definition of the term “infrastructure” than in all other jurisdictions within the UK: for example, by including digital and social infrastructure. The IIP confirms an expanded definition of infrastructure by including “natural infrastructure”, something which was supported by 95% of respondents.

The IIP appears to affirm the International Institute for Sustainable Development’s definition: “Natural infrastructure is an area or system that is either naturally occurring or naturalised and then intentionally managed to provide multiple benefits for the environment and human wellbeing.” The IIP recognises various benefits of investment in nature-based solutions, such as encouraging outdoor activity and enhancing tourism value.

Consistent portfolio coverage from 20221-22 to 2025-26

We highlighted some key investments in our previous article.

Since the Draft was published, a further £2bn has been added, with new funding announcements including £110m for digital public services transformation, £50m for Active Freeways, and £60m for climate adaptation of the trunk road network.

A new common investment hierarchy

The IIP also confirms the ways in which the Scottish Government intends to apply and incorporate a new Scottish Government-wide hierarchy into decision-making processes relating to public sector infrastructure investment over time. From highest to lowest, the hierarchy is as follows:

1. determine future need;
2. maximise the useful life of existing assets;
3. repurpose and co-locate;
4. replace, create or build new assets.

The IIP states that, in practice, implementing this hierarchy will mean that each step will be considered, in turn, before a decision on the approach to be taken is made: for example, something new might only be built if there is still a demonstrable service need for a facility, and an existing asset cannot be repurposed. The IIP states that this does not preclude new assets; rather, this approach considers future infrastructural requirements including the use of digital platforms and technology, and the suitability of existing assets. The Scottish Government estimates that, including capital spending on maintaining and enhancing assets and major equipment, it is already investing over £450m in maintenance in 2020-21. The Scottish Government will work towards doubling this figure over the next 5 years.

Commentary

The IIP certainly shows the Scottish Government’s commitment to infrastructure investment.

The hierarchy is particularly interesting as it confirms that, in the future, a higher proportion of investment will be directed towards the maximising existing assets; therefore, we are likely to see a bigger focus on maintenance.

Another point to note is that the Scottish Government’s long-term vision for infrastructure is aligned with its plans to mobilise private investment alongside public investment. These plans will be set out in more detail in the forthcoming ‘Investing with Purpose: Scotland’s Private Capital Investment Plan’, which will set out the Scottish Government’s strategy to attract internationally mobile private capital. When you consider the IIP, this forthcoming capital investment plan, and the Green Investment Portfolio published in 2020, it is clear that Scotland is taking its net zero goals very seriously. It is certainly an exciting time to be in Scottish infrastructure.

The full IIP can be found here.

Article co-authored by Innocent Maramba.