Empowering Scotland: The Government's Programme for Scotland 2013-2014

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First published by the Scottish Government, September 2013
ISBN: 9781782568131 (web only)

E-book first published by the Scottish Government, September 2013
ISBN: 9781782568148 (EPUB)

Kindle e-book first published by the Scottish Government, September 2013
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The Scottish Government
St Andrew's House
Edinburgh
EH1 3DG

Produced for the Scottish Government by APS Group Scotland DPPAS14610 (09/13)

Published by the Scottish Government, September 2013

Contents

Chapter 1 Foreword by the First Minister

Chapter 2 Summary

Chapter 3 Working Together to Create a More Successful Scotland

Chapter 4 Next Steps Towards the Referendum

Chapter 5 Accelerating Economic Recovery and Creating More Jobs

Chapter 6 Creating a Fairer Scotland and Empowering Communities

Chapter 7 Mitigating the Impacts of Austerity on People in Scotland

Chapter 8 Summary of Year 3 Legislative Programme

Chapter 1: Foreword by the First Minister

The case for independence is based on a very simple argument. Decisions about Scotland should be taken by the people who care most about Scotland: those who live and work here. This is both democratically right and the best way to improve our country. After all, no one has a greater incentive to make the right decisions for Scotland than us, the people who will be directly affected.

The record of the Scottish Parliament provides ample evidence of the truth of this argument: taking decisions in Scotland works. Individuals, families and communities have gained from the decision-making powers of devolution.

But equally, the record of successive Westminster Governments - often, like now, Governments that have been rejected by Scottish voters - demonstrates the costs to people in Scotland when decisions are still taken in Westminster.

The Scottish Parliament has taken bold decisions to address the very real needs of the country, and has reflected the views and values of its people.

The ban on smoking in public places and the introduction of minimum alcohol pricing are designed to improve Scotland's health record. Free personal care for the elderly and action to tackle homelessness demonstrate our concern for the most vulnerable in our society. There are record numbers of police officers, to reflect communities' concerns about crime and fear of crime. The abolition of tuition fees protects the ancient and proud Scottish commitment to education. The end of prescription charges, charges for eye and dental checks, and bridge tolls, recognises that everyone in society contributes to our common public services, so everyone should benefit - bringing together all parts of our society in Scotland, not dividing us.

Our Programme for Government for 2013-14 is a strong programme of legislation and delivery designed to build on these successes. It sets out what we are doing to accelerate economic recovery and create more jobs; to create a fairer Scotland and empower communities; and to mitigate the damaging impacts of austerity on people in Scotland.

Our programme for the economy in the year ahead is focused on supporting an investment-led recovery; taking direct action to boost employment; enhancing economic confidence; and rebalancing the economy through supporting innovation, internationalisation, and a transition to a low carbon economy. There is clear evidence that this approach is working. Scotland now has lower unemployment and higher employment than any other nation in the UK. Youth unemployment has fallen by 2 percentage points over the last year, and we outperform the UK on all headline labour market indicators.

But decisions taken by Westminster are making this job harder.

The decisions to cut capital investment; to impose austerity; to pursue policies that will widen the gap between rich and poor are all working against the goals of creating a more prosperous and fairer Scotland.

The debate about independence is a debate about our democracy and the involvement of individuals and communities in the running of their own affairs. The Lerwick Declaration this summer made clear our commitment to subsidiarity and local decision-making. That is why we are introducing the Community Empowerment and Renewal Bill, containing a wide-ranging series of reforms which will help communities to achieve their own goals.

Our commitment to the principles of public service reform set out by the Christie Commission is undimmed, and we will streamline and modernise public bodies in justice, the historic environment, and food standards.

We remain deeply concerned about the impacts of the UK Government's social security changes on vulnerable groups across Scotland. We are investing more to protect the most vulnerable from these measures. We are also following through on our commitment to a Social Wage, providing direct support to households at a time when the UK Government's austerity programme is placing household budgets under financial pressure.

I and my team of Ministers believe that the UK Government's austerity policies are the wrong approach for Scotland, going too far and too fast in cutting public spending and services. Despite the evidence of the success of our approach compared to that of the Westminster Government, we are limited by what we can achieve with the current range of powers, and can only seek to reduce the impacts of decisions which are not in Scotland's best interests.

We introduced the Scottish Independence Referendum Bill in the Scottish Parliament on 21 March 2013. This sets out our detailed proposals for running and regulating the referendum in a way which will command the confidence of Parliament and the people of Scotland.

A vote for independence in the Referendum on 18 September 2014 will complete the decision-making powers of the Scottish Parliament and Government. Critical matters currently decided by Westminster - on the economy, taxation, welfare, international relations, and defence - will be decided in Scotland, by and for the people of Scotland.

The Scottish Parliament has repeatedly proved its ability to take the important decisions needed to improve people's lives and reflect our values. It is now time to extend the advantages of self-government - of democratic accountability and oversight here in Scotland, of governments that reflect the views of the people of Scotland - to all matters that affect us directly, day-to-day. Instead of simply mitigating the impacts of decisions which are not in our best interests, we will then chart our own course based on the needs of the people who live and work in Scotland.

The eyes of the world will be on Scotland in 2014, as we celebrate the world's sports-people in the Commonwealth Games and the Ryder Cup, and welcome the world back to Scotland for Homecoming. They will see a country with a growing confidence and sense of itself, and a Parliament which continues to demonstrate its purpose and connectedness to the Scottish people and their values.

The Rt Hon. Alex Salmond MSP
The First Minister of Scotland

Chapter 2: Summary

1. This Programme for Government sets out the Scottish Government's programme of legislation and other activity for 2013-14. During this period, the Scottish Government will hold fast to the clear overriding purpose which it has focused on since 2007: to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth.

2. Despite the challenging economic conditions, and the restrictions of the current constitutional settlement, there have been significant achievements towards that purpose in the last year.

3. This year, we will focus our work to achieve the purpose around three key themes:

- accelerating economic recovery and creating more jobs;

- creating a fairer Scotland and empowering communities; and

- mitigating the impacts of austerity on people in Scotland.

4. 2014 is also, of course, the year of the referendum on independence. Our Programme includes the legislative steps to deliver that referendum, and the publication of the white paper which will set out how independence would be achieved, and what it would mean for Scotland. Scottish Ministers believe that independence is fundamental to delivering the Scottish Government's purpose. Without powers over welfare and control of fiscal and economic levers, the Scottish Government and its partners can only seek to reduce the impacts of decisions which are not in Scotland's best interests.

5. A vote for independence in the Referendum on 18 September 2014 would complete the decision-making powers of the Scottish Parliament and Government, so that critical matters currently decided by Westminster - on the economy, taxation, welfare, international relations, defence - would be decided in Scotland. Like devolution, independence would empower the people of Scotland, through their political institutions, to improve their lives and society, and allow Scotland its own voice in Europe and the wider world.

Accelerating Economic Recovery and Creating More Jobs

6. Scotland continues to emerge from the toughest economic conditions in over a generation. To build on the positive growth witnessed over the past year and to help mitigate the impact of the ongoing uncertainty in global economic conditions on the Scottish economy, the Scottish Government's programme for the economy in the year ahead will focus on: supporting an investment-led acceleration of the recovery; taking direct action to boost employment and develop skills; enhancing economic confidence and promoting business development; and rebalancing the economy through supporting innovation, internationalisation, and a transition to a low carbon economy.

7. The Scottish Government will take forward further legislation during the coming year to support economic growth: the Budget Bill, Revenue Scotland and Tax Powers Bill, Conclusion of Contracts Bill, and Bankruptcy Consolidation Bill.

Creating a Fairer Scotland and Empowering Communities

8. The Scottish Government attaches great importance to its work to promote equality and tackle inequality, and to improve the life chances and outcomes of individuals and communities. The Community Empowerment and Renewal Bill will be introduced to remove barriers, promote good practice and bring consistency in a number of areas to help enable communities to achieve their own goals.

9. High quality public services continue to be a cornerstone of Ministers' ambitious vision for Scotland. They have the power to give Scotland's children the best start in life; to reduce the inequalities which people and communities face; to help develop Scotland's economy and create jobs; and to ensure sustainable use of Scotland's environment. Legislation to further improve public services will include the RCAHMS and Historic Scotland Merger Bill, the Food Standards Scotland Bill, and the Mental Health and Adults with Incapacity Amendment Bill. The Courts Reform Bill, Damages Bill, and Licensing Bill will continue the vital reform and modernisation of Scotland's justice system.

Mitigating the Impacts of Austerity on People in Scotland

10. The Scottish Government is taking action to reduce the impact of the UK Government's austerity programme on the Scottish economy and on vulnerable groups. The Scottish Government is following through on its commitment to a Social Wage, providing direct support to households across Scotland through measures such as the Council Tax freeze, free personal care for the elderly, and free tuition fees.

11. The Scottish Welfare Fund Bill will set out in statute Ministers' intentions for this new discretionary Fund to provide vulnerable members of the community with a safety net in an emergency, and the Housing Bill will protect consumers, improve housing quality and secure better outcomes for communities.

Chapter 3: Working Together to Create a More Successful Scotland

1. The Scottish Government's Purpose remains creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. There have been significant achievements towards this Purpose in the last year, despite the continuing challenges of the economic situation across the United Kingdom and beyond.

2. Scotland has many assets: a wealth of natural resources; world-class universities; and strong growth sectors in key areas of the economy. However, Scotland's greatest assets are its people. It is for them that the Scottish Government's Purpose is intended, and through them - and their skills, dynamism, and ingenuity - that it can be achieved.

3. Creating the conditions for Scotland's people to realise their full potential is therefore central to the Scottish Government's approach. Working in partnership with individuals and organisations across the public sector, the business community, and wider civic society, the Scottish Government is:

- investing in growth and jobs;

- supporting and reforming Scotland's public services;

- tackling poverty and inequalities; and

- supporting and promoting community empowerment and engagement.

4. The range of achievements and future plans set out in this Programme for Government demonstrate that the distinctive direction being taken by Scotland in addressing issues that face the country - a direction shaped by the values, needs and aspirations of Scotland's people - is delivering successful outcomes, relative to the United Kingdom as a whole and in their own right.

5. The achievements of the Scottish Parliament demonstrate the substantial gains for individuals, families and communities when decisions about Scotland are taken in Scotland. As a result of decisions of the Scottish Parliament, free personal care for the elderly has been introduced and maintained; students do not have to pay tuition fees; and communities are protected by a record number of police officers.

6. By contrast, in those areas where decisions are still taken by Westminster there have been costs for people in Scotland. Under the UK Government's austerity programme, Scotland's capital budget has been reduced by 26.6 per cent in real terms since 2010-11. The cumulative impact of capital cuts from 2010-11 over the 5 years to 2015-16 is worth £3.2 billion to Scotland's economy, damaging employment and growth prospects for the country. The Scottish Government has mitigated the effects of these cuts (as described in paragraph 16) by successfully financing additional infrastructure investment through a range of alternative mechanisms.

7. In addition, the UK Government is introducing a range of changes and cuts to the social security system, with substantial impacts on people and services across the country. Scottish Government analysis estimates that the UK Government's welfare reforms could potentially cost people living in Scotland up to £4.5 billion in the 5 years to 2014-15, with children and families among those being hardest hit. Again, the Scottish Government is working with partners, particularly in local government, to mitigate the effects of these cuts as far as possible within the powers available, but remains deeply concerned about the impacts they will have upon vulnerable groups across Scotland.

8. The objectives which are central to this year's Programme for Government are therefore:

- accelerating economic recovery and creating more jobs;

- creating a fairer Scotland and empowering communities; and

- mitigating the impacts of austerity on people in Scotland.

Details of how the Scottish Government is working to achieve these objectives across the full range of its responsibilities, using all currently available levers, are set out in Chapters 5-7.

9. Scottish Ministers believe that the austerity policies of the UK Government are the wrong approach for Scotland, going too far and too fast in cutting public spending and services. However, within the constraints of the current constitutional settlement the Scottish Government is limited in the actions it can take, despite the clear evidence of the success of its approach compared to that of the Westminster Government (see paragraphs 14-15).

10. Without powers over welfare and control of fiscal and economic levers, the Scottish Government and its partners can only seek to reduce the impacts of decisions which are not in Scotland's best interests.

11. With independence, an alternative to the current UK Government's programme of austerity becomes possible. Future Scottish Governments would be able to focus all their efforts on making Scotland more successful and improving the lives of people in Scotland, using the full range of mechanisms at the disposal of other governments. Independence would give Scotland's people control of their country's natural, institutional and human assets to build a better society. That is why Ministers believe that decisions about Scotland's future should be made here in Scotland, and not in Westminster by a Parliament and governing parties with fundamentally different priorities to those of Scotland.

12. Chapter 4 details the progress made over the past year to put in place the means for people in Scotland to choose on 18 September 2014 whether Scotland should be an independent country, and outlines what could be achieved with the full suite of powers.

Achievements

13. By acting decisively to create opportunities and working in partnership to deliver them, Ministers have delivered tangible successes across the breadth of the Scottish Government's areas of responsibility.

14. During the past year, substantial progress has been made towards accelerating Scotland's economic recovery and creating more jobs:

- lower unemployment and higher employment than any other nation in the UK, with unemployment in Scotland currently standing at 7.2 per cent, compared to the UK rate of 7.8 per cent;

- youth unemployment has dropped from 21.1 per cent a year ago to 19.1 per cent, compared to the current UK rate of 20.9 per cent;

- the target of creating 25,000 Modern Apprenticeships per annum has been exceeded, with 25,691 people starting apprenticeships in 2012-13; and

- continuing significant investment (over £3.5 billion) in major infrastructure projects, including the Queensferry Crossing, the New South Glasgow Hospitals and the Scottish Schools for the Future Programme, alongside progressing a wide range of smaller shovel-ready projects.

15. Much has also been achieved to create a fairer Scotland and empower communities, including:

- more university places for students from poorer backgrounds, backed up by law through the Post-16 Education Act, with 727 additional places for students from poorer backgrounds agreed for 2013-14;

- the lowest level of recorded crime for 39 years;

- despite UK Government spending reductions, police officer numbers in Scotland have been maintained at more than 1,000 higher than in 2007, whereas the number of police officers in England & Wales has fallen to its lowest level for 11 years; and Scotland's crime clear-up rate is the highest for 35 years; and

- greater community ownership of land - setting a million acre target for community ownership, and increasing the Land Fund by a further £3 million.

16. Within the limits of the powers currently available to them, Ministers have continued to work hard to mitigate the worst impacts of the UK Government's austerity programme on people in Scotland:

- despite cuts to the capital budget, the Scottish Government is supporting more than £10 billion of infrastructure investment between 2012-13 and 2014-15 through a combination of conventional capital investment, the Non-Profit Distributing Pipeline, rail investment through Network Rail's Regulatory Asset Base, and by switching resource into capital budgets;

- investing more to protect the most vulnerable in Scotland from the UK Government's welfare reforms, including £40 million for Council Tax Benefit successor arrangements in partnership with local government, £9.2 million for the new Scottish Welfare Fund, and £7.9 million for advice and support services; and

- prioritising and protecting vital public services, including a real terms resource increase in the health budget, with Ministers categorically ruling out the disruptive type of reforms and upheaval being put in place in NHS England.

Delivering for Scotland

17. Through our programme of legislation and policy delivery for the parliamentary year 2013-14, the Scottish Government will maintain the pace of its efforts to accelerate economic recovery, create a fairer Scotland, and mitigate the impacts of austerity.

18. Scotland's approach to government is based on a culture of working in partnership, building consensus to take advantage of shared opportunities and tackle shared challenges. This enables the Scottish Government and its many partners to develop integrated approaches which focus on the outcomes that matter to people, rather than working within administrative silos. The following examples highlight how this approach is delivering for Scotland.

Transforming Scotland's Public Services

19. High quality public services have the power to reduce the inequalities which people and communities face, and develop Scotland's economy. The Scottish Government has taken decisive action not only to protect public services but to improve them, working in partnership with local government.

20. Learning from the Christie Commission in 2011, Scottish Ministers set a strong course, focused on four evidence-based pillars of reform: a decisive shift towards prevention; partnership between public services; greater investment in people delivering services; and a sharp focus on performance. Scottish Ministers' approach is underpinned by the Social Wage: protecting household budgets through free education, prescriptions, concessionary travel and frozen Council Tax bills; and helping to sustain demand in the economy.

21. Taken together, these pillars have provided the framework for a transformational cross-sector programme of reform delivering the improved outcomes that local people and communities value most. The Scottish Government remains convinced that this distinctive approach, forged in Scottish values and characterised by collaboration, will continue to strengthen and renew our public services now and for generations to come.

22. The Scottish Government is leading the transformation of Scotland's public services with a comprehensive set of flagship reforms, including the following achievements:

- establishing a single Police Service of Scotland and a Scottish Fire and Rescue Service to protect and improve local services despite financial cuts, create more equal access to specialist support, and strengthen the connection between services and communities;

- restructuring further education resulting in a smaller number of larger regional colleges - improving their ability to work with partners, align skills to the needs of local employers, and deliver more efficient services, saving around £50 million per year from 2014-15;

- introducing new legislation to drive the integration of health and social care to improve care for adults, particularly older people, providing a more joined-up service between health and social care and a more effective use of resources across the system.

Scotland's Digital Future

23. The Scottish Government aims to transform Scotland into a world-leading digital nation by 2020, as set out in Scotland's Digital Future - A Strategy for Scotland. Ministers are committed to: ensuring that there is a vibrant and thriving digital economy in Scotland; increasing digital participation by ensuring that individuals and businesses are capable and confident in using digital technology; and to giving people access to the public services and information they want, whenever and wherever they want them, ensuring that those services that can be delivered effectively and efficiently online are delivered online.

24. Working with a wide range of partners across the private, third and public sectors, the Scottish Government is putting in place a comprehensive programme of work to ensure that people and businesses in Scotland have access to:

- world-class digital connectivity with a hybrid of fixed and mobile networks that will support 'any device, anywhere, anytime' connectivity across the country;

- opportunities to enhance digital skills, and support in overcoming the barriers to digital participation;

- a business support framework enabling Scottish businesses to innovate and develop new markets, improve processes and create new, high quality employment opportunities; and

- digital public services that are capable of achieving both financial and carbon savings, and a positive customer experience.

25. To ensure that Scotland's Digital Future develops through wide involvement across Scottish society, the Scottish Government has launched Scotland's Digital Dialogue: a programme of discussion events, seminars and demonstrations to stimulate debate and test ideas about Scotland's Digital Future with key stakeholders and the general public.

Scotland on the World Stage in 2014: the Commonwealth Games and the Ryder Cup

26. In the Summer of 2014 Scotland will host the XXth Commonwealth Games and the Ryder Cup. The Glasgow Commonwealth Games will take place from 23 July to 3 August 2014, and will be the largest multi-sports event that Scotland has ever hosted. In September 2014, the Ryder Cup golf match-play competition will be held at Gleneagles - the first time in more than 40 years that the tournament has been played in Scotland.

27. Scottish Ministers are determined to ensure that people throughout Scotland are able to capitalise on these once in a generation events. The Scottish Government and its partners continue to build on the excellent foundations in place to deliver a lasting legacy for the people of Scotland as a result of hosting these events, as described in Chapter 6.

28. The benefits of the Commonwealth Games and the Ryder Cup will be extended still further through a wider programme of activity under the banner of Homecoming Scotland 2014. This will enable businesses and communities across the country to participate in showcasing and celebrating Scotland's assets to the world.

Homecoming Scotland 2014

Scotland's first Year of Homecoming in 2009 influenced more than 95,000 visitors to travel to Scotland and generated £53.7 million in additional tourism revenue. Building on this success, Homecoming Scotland 2014 will position Scotland on the international stage as a dynamic and creative nation. It will extend the benefits and opportunities offered by the Commonwealth Games and the Ryder Cup by presenting a year-long, co-ordinated programme of events designed to generate pride in the people of Scotland and welcome visitors around the world in a celebration of some of Scotland's greatest assets.

Homecoming Scotland 2014 aims to:

- generate additional tourism revenue as a direct result of Homecoming Scotland 2014 activities, with a target of generating a return of £44 million on an investment of £5.5 million;

- develop Scotland's event portfolio and build capacity in the industry;

- engage, inspire and mobilise communities across Scotland;

- engage with Scottish businesses; and

- enhance Scotland's profile on the international stage.

The event programme for Homecoming Scotland 2014 was launched by the First Minister on 27 March 2013. Its Signature Events include: Hogmanay 2013-14 and 2014-15, the John Muir Festival, Whisky Month, Battle of Bannockburn 2014, Edinburgh Festivals, Forth Bridge Festival 2014, the Ryder Cup Opening Concert and Highland Homecoming.

29. These are just some examples of what can be achieved through Scotland's approach to government of working in partnership to realise opportunities and tackle challenges, drawing on the assets of Scotland's people. With the full powers of an independent country, Scotland as a whole would be in a position to apply this approach in more ambitious and creative ways yet.

30. During the build-up to the referendum on independence on 18 September 2014, everyone in Scotland will have the opportunity to participate in the debate on what a modern Scotland should look like. The following chapter outlines why Ministers believe that independence is needed for Scotland to realise its full potential, and sets out the arrangements the Scottish Government is putting in place to ensure a fair, inclusive process.

Chapter 4: Next Steps Towards the Referendum

1. Last year's Programme for Government set out an ambitious vision for Scotland as a prosperous and successful European country, reflecting Scottish values of fairness and opportunity, and promoting equality and social cohesion. A Scotland with a new place in the world as an independent nation, participating fully in Europe and the community of nations, on the basis of equality, responsibility and friendship. This Programme for Government records the progress Scotland has made within the current constitutional settlement. This vision can only be fully achieved with independence: as long as Westminster retains control of key responsibilities, Scotland cannot take the necessary decisions to fulfil its potential or to take its place in the world.

2. The Scottish Government believes that political and economic power should be transferred from Westminster to Scotland because it is better for all if decisions about Scotland's future are taken by the people who care most about Scotland: that is, the people of Scotland.

3. The current devolution settlement puts under democratic control in Scotland vital public services such as health, education and justice. Devolution has provided Scotland with a measure of self-government, and has demonstrated that:

- Scotland is capable of self-government, making decisions suitable for Scotland and leading the way for the rest of the United Kingdom: this Programme for Government describes the gains for people and communities in Scotland in those policy areas where the Scottish Parliament and Government currently have the power to make decisions; and

- self-government is necessary to reflect the political choices of the people of Scotland, protecting public services in tune with their priorities rather than following the privatisation agenda implemented elsewhere.

4. Independence would complete the decision-making powers of the Scottish Parliament and Government, so that critical matters currently decided by Westminster - on the economy, taxation, welfare, international relations, and defence - would be decided in Scotland.

5. Just as the record of devolution shows that there are clear benefits from having the ability to take decisions, the evidence shows there are costs for people in Scotland from decisions still taken by Westminster. The current Westminster Government has imposed, or announced, a range of measures in Scotland despite the opposition of a majority of Scottish MPs. These include:

- the 'bedroom tax', which has cut housing benefit for people judged to have a 'spare' bedroom: the Scottish Government has pledged to scrap this in the first year of independence;

- cuts to Scotland's capital budget of 26.6 per cent in real terms since 2010-11, despite repeated urging from the Scottish Government not to take this course because of the damage caused to jobs and the economy;

- real terms cuts to many family incomes through the Welfare Benefits Up-rating Act 2013. It has been estimated that changes being introduced by the current Westminster Government could mean an extra 50,000 children in Scotland being brought up in poverty; and

- the decision to privatise the Royal Mail.

6. Independence is not just an end in itself, nor the end point of a process. Like devolution, independence will empower the people of Scotland, through their political institutions, to improve their lives and society and allow Scotland its own voice in Europe and the wider world.

7. Independence for Scotland will:

- guarantee that the people of Scotland get the government they vote for, reconnecting the political system with the voters, and reinvigorating public participation at national and local level;

- provide Scotland with its own voice in the world, representing Scottish interests and promoting Scottish values in Europe and internationally. Independence would also provide the opportunity to create a new relationship across the United Kingdom based on mutual respect between equals, and to work together and cooperate on matters of common interest;

- ensure any future Scottish Government can develop and deliver economic policies for Scotland's needs and circumstances. Scotland enjoys key strengths which are important for creating a resilient, secure and successful economy. We have some of the world's best universities, enough oil to meet our current needs six times over, a quarter of Europe's offshore wind and tidal potential, a world-class food and drink industry, cutting-edge life sciences and other key growth sectors. Scotland's public finances are stronger than the rest of the United Kingdom. For every one of the last 30 years tax receipts in Scotland per head of population have been higher than for the UK. Spending on social protection in Scotland takes up a smaller proportion of our national income compared with the UK and most other EU-15 countries. But vital fiscal and non-fiscal levers are in the hands of Westminster, which insists on a one-size-fits-all policy. This is despite the evidence that shows large economic disparities across the UK with jobs and wealth being increasingly concentrated in London and the South-East of England; and

- provide the means to build a more equal, cohesive society. The gap between rich and poor has been widening under Westminster control. This is to the detriment of individuals and wider society. Independence will provide both the policy opportunities and the incentives to address this situation.

8. The key gains that Scotland would be able to make with independence therefore include the ability to:

- develop economic policies suited to Scotland's needs and priorities, be it: setting a competitive rate of corporation tax; taking measures to encourage innovation; re-industrialising Scotland through green technology and engineering; cutting Air Passenger Duty which damages international business opportunities; or promoting Scotland's world-famous food and drink products;

- design a tax system that encourages Scotland's growth while ensuring robust public finances, including a stable and predictable regime for the North Sea oil and gas industry, in contrast with the numerous changes imposed by Westminster which damage investment;

- set up an oil fund to ensure stable public finances and so that future generations can benefit from Scotland's oil wealth;

- abolish unjust and expensive social security measures such as the 'bedroom tax', which are hurting the disabled and the vulnerable;

- ensure that Scotland's welfare and benefits system assists those able to work into employment, while assisting those who cannot work and treating with dignity all who require help;

- ensure pensions are protected and improved;

- close the growing gap between rich and poor through innovative approaches to government such as preventative spend, and joining up local services with the tax and benefits system to build on existing strengths of communities and individuals;

- encourage skilled workers to study and settle in Scotland, drawing on the attractions of our universities and Scotland's highly developed industrial sectors, such as energy, life sciences, and creative and digital industries;

- represent Scotland positively in Europe as a full member state, removing the risk of leaving the EU that exists as part of the UK; and

- remove from Scotland the Trident nuclear weapon system, which costs the UK around £2 billion per year to run (Scotland's 8.4 per cent population share of which is around £170 million), and the successor to which could cost the UK £100 billion to build and operate over its lifetime.

9. These and other gains would be made possible through decisions made by future Scottish Parliaments and Scottish Governments in an independent country. The range of choices open to an independent Scotland, and the debate between the options that the Scottish people can consider in future Scottish elections, will form an important part of the debate within the country in the lead-up to the referendum on 18 September 2014.

10. A vote for independence therefore has two consequences:

- ending the Parliamentary Union with Westminster, passing its responsibilities for affairs in Scotland to the Scottish Parliament, completing the partial self-government provided by the current devolution settlement; and

- allowing the Scottish Parliament and Scottish Government to develop and deliver policies to shape the country the people of Scotland want it to be.

11. By contrast, a vote against independence means both that Westminster retains its powers over Scotland, and that Scotland will be shaped in large part by decisions taken at Westminster, whether or not supported by the people of Scotland.

The Referendum Process

12. In January 2012 the Scottish Government launched a public consultation on its plans for running and regulating the referendum on independence. The consultation received over 26,000 responses from a wide range of individuals and organisations before it closed in May 2012. The responses, which were on a record level for a consultation on a constitutional issue, were analysed by independent researchers, and the report of the analysis was published in October 2012. The report showed support for the Scottish Government's proposals.

13. Over the Summer of 2012 the Scottish and UK Governments worked together to produce an agreement which put beyond any doubt that decisions on how the referendum should be run were for the Scottish Parliament. The Edinburgh Agreement, signed on 15 October 2012 by both the Scottish and UK Governments, confirmed that the referendum should:

- have a clear legal base;

- be legislated for by the Scottish Parliament;

- be conducted so as to command the confidence of parliaments, governments and people; and

- deliver a fair test and a decisive expression of the views of the people in Scotland and a result that everyone will respect.

14. Following the Agreement, an Order was approved by both the Scottish and UK Parliaments (and made by the Privy Council in February 2013) to enable the Scottish Parliament to legislate for a referendum to be held before the end of 2014. The referendum next year will offer the people of Scotland the opportunity to take the most important decision facing Scotland in over 300 years; and to determine what type of country they want Scotland to be in the future.

15. The Scottish Government has been clear from the start of this process that the referendum must be trusted and clear. The public consultation set out the Scottish Government's proposals, which were based on the existing, established rules in place for elections in Scotland and the rest of the UK. The widely endorsed proposals were designed to ensure that the referendum will meet the highest international standards of fairness, transparency and propriety. Subsequent discussions with electoral administrators, the Electoral Commission and other key stakeholders have confirmed the consensus which has built up over the process to be followed in giving the people of Scotland the right to determine Scotland's future.

16. The Edinburgh Agreement and Parliamentary Order confirmed that the Scottish Parliament should have control over the franchise for the referendum. The people who live in Scotland are the best people to make decisions about the future of Scotland, and so the franchise to be used at the referendum will be that which most closely reflects residency in Scotland. The Scottish Independence Referendum (Franchise) Act was passed by the Scottish Parliament on 27 June 2013, and sets out who is eligible to register for, and vote in, the referendum on independence. All those who can currently vote in Scottish Parliament and local government elections in Scotland will be eligible to vote, as well as those aged 16 or 17 on the day of the poll. The Scottish Government has long held the view that the voting age in Scotland should be lowered to allow 16 and 17 year olds to vote, and it is right that the franchise for the referendum should be extended in this way.

17. The referendum will therefore mark the first occasion in the UK when 16 and 17 year olds have been eligible to vote in a national poll. Young people have a significant stake in the future of their country, and the change to the franchise means that they will have the opportunity to participate in the most important vote to be held in Scotland in three centuries, and to have their say in shaping the future of Scotland.

18. The Scottish Government asked the Electoral Commission to test its proposed wording for the referendum question with the public. The question had been included in the public consultation and 64 per cent of those who responded broadly agreed with the wording. After testing the question with a range of voters and seeking the views of a wider group, the Electoral Commission suggested an amendment to the question which the Scottish Government accepted and included in the Bill.

19. The Scottish Government introduced the Scottish Independence Referendum Bill in the Scottish Parliament on 21 March 2013 and, subject to Parliamentary approval, it is expected to be passed in November 2013. The Bill contains the Scottish Government's detailed proposals for running and regulating the referendum in a way which will command the confidence of Parliament and the people of Scotland. The specific proposals are informed by best practice and by the views expressed during last year's public consultation process. Amongst other things, the Bill sets out:

- the date of the referendum: 18 September 2014;

- the wording of the question: 'Should Scotland be an independent country?';

- the rules and spending limits for campaign funding; and

- the detailed rules for the conduct of the referendum.

20. The Bill provides for the referendum to be overseen by the independent Electoral Commission, which will also be responsible for regulating the campaign rules, informing the public about the referendum, and reporting to the Scottish Parliament on the conduct and administration of the referendum.

21. The referendum will be conducted under the direction of a Chief Counting Officer, who will be the person who is the Convener of the Electoral Management Board and will be responsible for appointing local Counting Officers to run the poll at a local level.

22. The Scottish Government has set out the process that would take place following a vote for independence in the document Scotland's Future: from the referendum to independence and a written constitution.

23. The Scottish Government will publish its detailed white paper with positive proposals on the opportunities and gains of independence in the autumn. The Scottish Government has already published material on the referendum and its proposals for an independent Scotland, which can be found on the Referendum 2014 website (www.scotreferendum.com); further material, in addition to the white paper, will also be published in the run-up to the referendum. Other political parties, stakeholders, and individuals will have their own proposals for the policies to be pursued in an independent Scotland. The Scottish Government's white paper and other publications will inform discussion of the policy choices available to an independent Scotland, which is a central part of the national debate before the referendum and the 2016 Scottish election.

Chapter 5: Accelerating Economic Recovery and Creating More Jobs

1. The Scottish Government's Government Economic Strategy (GES) provides a flexible and adaptable framework to support sustainable economic growth in Scotland with opportunities for all to flourish.

2. By building a more dynamic and faster-growing economy we will increase prosperity, be better placed to tackle Scotland's health and social challenges, and establish a fairer and more equal society.

3. The priorities in the GES continue to lie at the heart of the Scottish Government's programme for 2013-14. Our programme features substantial investment in renewable energy, post-16 education, capital infrastructure, the digital economy, and innovation.

4. Scotland continues to emerge from the toughest economic conditions in over a generation.

5. Over the last year and up to the end of the first quarter of 2013, the Scottish economy grew by 1.2 per cent, compared to growth of just 0.3 per cent in the UK as a whole. Overall, and supported by the actions we have taken, Scotland's recession was shallower than in the UK, with output in Scotland now just 2.0 per cent below its pre-recession peak, whereas in the UK, output is still some 3.9 per cent below its peak.

6. Scotland also now has lower unemployment and higher employment than any other nation in the UK. Youth unemployment has fallen by 2 percentage points over the last year, and we outperform the UK on all headline labour market indicators.

7. As we look to the recovery, it is essential that we continue to prioritise our efforts towards: delivering long-run sustainable economic growth; boosting the resilience of our economy; taking advantage of the competitive advantage of our key sectors; growing Scottish exports; making best use of digital technologies; and investing in infrastructure, innovation and skills development to best prepare Scotland for the future.

8. It is clear, however, that the global recovery will remain fragile for some time.

9. It is vital therefore that we also tackle the legacy effects of the recession in areas such as the labour market - particularly amongst those groups or parts of the country most affected by the downturn - and the financial system where for many viable and growing small businesses access to finance remains restricted.

10. The GES sets out how the Scottish Government will make full use of the levers currently devolved to the Scottish Parliament to accelerate recovery, drive sustainable growth and develop a more resilient and adaptable economy.

11. However, the Scottish Government is clear that whilst we have had considerable successes using the powers that we currently have - for example in areas such as modern apprenticeship schemes, in attracting international investment, and prioritising infrastructure investments - we could do much more if we had greater access to the levers of growth. Under the current constitutional arrangement, for example, the Scottish Parliament controls just 7 per cent (rising to 15 per cent following the recent Scotland Act) of tax revenues in Scotland. With independence this would rise to 100 per cent. Independence would also give the Scottish Parliament powers over competition policy, labour market regulation, and product market regulation, all of which can help increase sustainable economic growth in the Scottish economy.

12. Independence is the key to unlocking Scotland's economic potential. With the economic levers of other normal independent nations we could use them, just as we have used our limited devolved economic powers, to boost growth and tackle inequalities.

Accelerating Recovery

13. To build on the positive growth witnessed over the past year and to help mitigate the impact of the ongoing uncertainty in global economic conditions on the Scottish economy, the Scottish Government's programme for the economy in the year ahead will focus on:

- supporting an investment-led recovery;

- taking direct action to boost employment and create more economic opportunity;

- enhancing economic confidence in Scottish households, and promoting business development; and

- rebalancing the economy, through supporting innovation, internationalisation, and a transition to a low carbon economy.

A Legislative Programme to Accelerate Recovery

The legislative programme for the coming year will contain a number of Bills that will support Scotland's economy and people:

- the Budget Bill provides Parliamentary approval for the Scottish Government's spending plans, allowing the allocation of resources to the Government's strategic objectives and delivery of the Purpose;

- the Scottish Welfare Fund Bill will establish a fund to provide discretionary local welfare assistance to vulnerable members of the community;

- the Revenue Scotland and Tax Powers Bill will establish Revenue Scotland as the tax authority responsible for collecting Scotland's devolved taxes from 1 April 2015 - an important first step in taking on greater responsibility for setting and collecting taxes in Scotland;

- the Conclusion of Contracts Bill will make it easier for companies to formally 'sign' and conclude contracts; and

- the Bankruptcy Consolidation Bill will update Scotland's bankruptcy legislation in order to ensure that Scottish bankruptcy law is readable, accessible and easier for both practitioners and those affected by the law to use.

Supporting an Investment-led Recovery

14. Capital investment continues to be a central element of the Scottish Government's approach to boosting growth.

15. It is widely recognised that capital investment has both short- and long-term benefits. The OECD's Economic Survey of the UK, published in February 2013, highlighted that investment in infrastructure can encourage both short- and long-term growth, especially in an economic downturn.

16. Capital investment by the public sector can provide an immediate stimulus to the economy, thereby protecting jobs and output when conditions in the wider economy remain fragile. It can also help retain vital skills and activity in key sectors such as construction which could, as a result of weak demand, be lost.

17. For example, it is estimated that each additional £100 million of public sector capital spending in 2013-14 supports around £160 million in output in the wider economy for that year. Furthermore, such investment is estimated to support around 1,325 full-time equivalent Scottish jobs, around 60 per cent of which are in construction.

18. Such investment also has substantial long-term benefits which may, in time, turn out to have an even more important impact on Scotland's economy. Investing in infrastructure creates new assets, such as new roads and schools, which in turn make the economy better connected, more productive and better skilled, thereby boosting Scotland's economic potential.

19. The Scottish Government continues to pursue a range of actions to boost such investment, including the economic stimulus packages announced in June and December 2012. These involved a wide range of construction and maintenance projects to supplement our long-term investment plans.

20. However, our actions are hampered by the unprecedented cuts the UK Government has made to our core capital budget. The Scottish Government's DEL capital budget is being reduced by 26.6 per cent in real terms over the period 2010-11 to 2015-16.

21. The Scottish Government intends to make best use of the financial transactions consequentials allocated at the UK Budget in March and the UK Spending Review in June. However, this funding can only be used to support loans and equity investment and must be repaid. The Scottish Government continues to make the case that financial transactions are no substitute for an injection of conventional capital funding that can boost economic recovery, and Scottish Ministers continue to make the case to the UK Government for additional capital funding, both separately and in collaboration with the other devolved administrations.

22. The Scottish Government has long argued for a different approach. Whilst we recognise the need to restore the public finances to health, this can only be achieved when there is sufficient growth in the wider economy.

23. Whilst we will therefore continue to press the UK Government to release more funds for capital investment, we will also continue to pursue a range of alternative innovative financing approaches to boost investment.

24. Over the 3 year spending period from 2012-13 to 2014-15, the Scottish Government will support more than £10 billion of infrastructure investment through the capital budget, the Non-Profit Distributing (NPD) pipeline, rail investment through Network Rail's Regulatory Asset Base (RAB) and switching resource into capital.

25. We will also continue to ensure that projects undertaken in Scotland are procured quickly and efficiently and are delivered on time and on budget. Scottish Futures Trust (SFT) is tasked with improving the efficiency and effectiveness of infrastructure investment in Scotland through collaborative working with public bodies and industry. The Scottish Government sets SFT a challenging target to achieve between £100 million and £150 million of savings and benefits annually across its work in infrastructure investment. In August 2013, SFT published its externally and independently validated Benefits Statement, announcing that it had delivered £132 million of net savings and benefits to Scotland arising as a result of its work during the 2012-13 financial year.

26. During 2012, nine of the major infrastructure projects included in the Infrastructure Investment Plan (published in December 2011), with a value of £644.5 million, were completed and brought into use. These included three transport projects: the Paisley Corridor rail improvements, the Fife Intelligent Transport System (part of the Forth Replacement Crossing Project) and the A96 Fochabers to Mosstodloch Bypass; four health projects: NHS Lanarkshire - Airdrie Community Health Centre, NHS Tayside - Mental Health Developments Project, NHS Lothian - Royal Victoria Hospital, and NHS Grampian - Emergency Care Central; and two prison projects: HMP Low Moss and HMP Shotts - Redevelopment Phase 2.

Investment in Scotland's Housing

The Scottish Government has made significant commitments in terms of housing investment. Ministers recognise the vital role of housing in providing people with a platform for getting on in life. As well as having a direct impact on the economy and jobs, provision of high quality homes contributes positively to neighbourhoods and has a positive influence on people's health, education and safety. This Government has pledged to deliver 30,000 affordable homes over the lifetime of this Parliament, including 20,000 social homes of which at least 5,000 will be council homes. In the first 2 years, 12,891 new affordable homes, including 9,926 social homes, have been delivered. Plans are in place over the next 3 years to keep this pledge on track.

Innovation is at the heart of the Scottish Government's approach. Action is being taken to attract private sector investment by using a modest level of public sector funding as leverage. This includes the pioneering use of government guarantees to support housing investment through the National Housing Trust initiative and other innovative financing approaches, which have so far secured approval for around 1,900 new affordable homes across Scotland. Scottish Government guarantees are also facilitating Homes for Scotland's 'MI New Home' Mortgage Indemnity Scheme, which is supported by 25 house-builders and three of Scotland's biggest lenders. A new £120 million 2-year new-build shared equity scheme will help first-time buyers and 'second-steppers' looking to move to another property.

The Scottish Government is also funding innovation within Scotland's Sustainable Housing Strategy. The Affordable Housing Supply Programme continues to provide £4,000 funding for new homes meeting required CO_2 emission and energy efficiency standards, while the £13.5 million Greener Homes Innovation Scheme will provide over 330 energy efficient affordable homes using innovative modern methods of construction. The Home Energy Efficiency Programmes for Scotland, introduced with a budget of £79 million in April 2013, are being used to maximise leverage of Energy Company Obligation (ECO) funding into Scotland. This should deliver £200 million of expenditure and make Scotland the most attractive place in Great Britain for energy companies to deliver their regulatory requirements to support energy efficiency improvements.

Tackling Unemployment and a Lack of Opportunity

27. The Scottish Government's focus throughout the economic downturn has been on supporting and sustaining employment, and this focus continues as economic recovery begins to take hold. This is particularly the case for youth employment, as young people have been the most exposed group in the labour market during the economic downturn. The Scottish Government remains committed to tackling youth unemployment, with the Minister for Youth Employment leading our 'All Scotland - All Government' approach. Scotland's youth employment rate remains higher than the UK rate at 55.0 per cent compared to 48.8 per cent. Youth unemployment fell by 14,000 over the year to April-June 2013, with the youth unemployment rate decreasing by 2.0 percentage points to 19.1 per cent. By contrast, the UK rate decreased by only 0.1 percentage points to 20.9 per cent over the same period.

28. Despite the recent good news, there is a substantial distance to travel before Scotland returns to its pre-downturn levels of youth employment. The Scottish Government remains committed to supporting young people into work, and ensuring that all of those who are out of work are able to access services to support them into work. The Scottish Government published Working for Growth - An Employability Framework for Scotland in September 2012, and the Scottish Employability Forum (SEF) has been reconstituted to support delivery of the Framework.

29. The Scottish Government will continue to focus on the 'Making Young People Your Business' campaign which asks employers to invest in young people through offering jobs or work experience. Planned investment in the coming year includes targeted support to encourage SMEs to recruit a young person through the Youth Employment Scotland wage incentive programme. This programme, part-funded by refocused European Structural Funds, provides financial incentives to small businesses to create up to 10,000 jobs for young people.

30. Through the Opportunities for All initiative, all 16-19 year olds in Scotland not already in work, education or training are being offered a learning or training opportunity. The school leaver destination survey illustrates that in March 2013, 89.5 per cent of school leavers from the 2011-12 academic year were in positive destinations up to 9 months after leaving school, an increase of 2.3 percentage points from 2010-11.

31. The Scottish Government has a firm commitment to provide 25,000 new Modern Apprenticeship opportunities in each year of the Parliament, and to ensure that these include higher-level technical and professional apprenticeships, developed in response to employer demand. The Scottish Government, through Skills Development Scotland (SDS), delivered 25,691 Modern Apprenticeship starts in 2012-13. SDS research shows that 92 per cent of those who complete apprenticeships are in work 6 months later - and most (nearly 80 per cent) are in full-time employment.

32. As the economic recovery begins to take hold, it is more important than ever to ensure that Scotland's workforce is equipped to take advantage of new opportunities. This underlines the importance of workforce skills, as reflected by the strategic priority they are given in the GES. Skills Investment Plans aim to match and anticipate the current and future skills needs within economic growth sectors. Skills Investment Plans for energy, tourism, and food and drink have been launched, and more are planned in this year for financial services, life sciences, and creative/digital sectors. Action Plans for enabling technologies including engineering and Information and Communications Technology (ICT), and for subsectors such as construction and chemicals, are also anticipated this year. Regional skills action plans are also now in preparation.

33. The Scottish Government worked with the Scottish Trades Union Congress (STUC) on last year's Women's Employment Summit, and its recommendations included policies to address occupational segregation and encourage more women to start their own enterprises. Related to this, the Scottish Government will use new powers in the Children and Young People Bill to increase the amount and flexibility of early learning and childcare, providing greater parental choice and removing some of the barriers that parents, especially women, face in returning to employment. A joint analysis of labour market trends published in June 2013 offers new insights into the demographic breakdown of Scotland's workforce, and provides a better understanding of just how well Scotland is doing in terms of employment.

Enhancing Economic Confidence and Promoting Business Development

34. The key to unlocking Scotland's economic potential is a strong recovery in the private sector. To help unlock this potential, the Scottish Government aims to ensure that Scotland has a competitive, supportive business environment that has the right infrastructure in place; is friendly to enterprise; attractive to entrepreneurs, inward investors and skilled migrants; and where key Scottish companies and sectors are seen as market leaders.

35. To maintain Scotland's position as the best place to do business in the UK, our business rates relief package will reduce business rates taxation by £560 million this year. As part of this, two in every five business properties across Scotland benefit from zero or reduced rates through the Small Business Bonus Scheme. The Scottish Government is committed to maintaining the Small Business Bonus Scheme, and to matching the English poundage for the lifetime of this Parliament. In addition, the Scottish Government is undertaking a thorough and comprehensive review of the business rates system, initiated through the publication of the consultation paper Supporting Business - Promoting Growth. The Scottish Government will shortly report on responses to its consultation, and outline a range of actions that this Government intends to take forward to improve the business rates system to support our national outcome of making Scotland the most attractive place to do business in Europe.

Enhancing Households' Economic Confidence

The Scottish Government's approach to enhancing economic confidence also emphasises providing security to households during difficult global economic conditions. Families have experienced significant pressure on real incomes, as wages have failed to keep pace with inflation in recent years. In recognition of the challenges faced by households, and as promised by Ministers in May 2011, the Scottish Government is continuing to implement its core economic and social commitment through the Social Wage. These measures include: no prescription charges, free higher education, and free personal care for the elderly.

Tax policies, which include freezing Council Tax, continue to help Scottish households through the current economic climate. The Scottish Government's Council Tax freeze deal has saved families in the average Band D property £479 over the 5-year period 2008-09 to 2012-13. In 2013-14, the Scottish Government made available up to £450 million funding for local government to freeze the Council Tax in 2013-14 and 2014-15, freeing up even more capital for families to spend on consumer goods and investments.

The Scottish Government is continuing to deliver an approach to public sector pay that operates within tight constraints but provides for a 'no compulsory redundancy' approach, supporting thousands of public sector jobs and giving confidence to households across Scotland; and will continue to implement the Scottish Living Wage over the remainder of this Parliament.

36. The Scottish Government is committed to delivering change in the culture of regulation in Scotland, and ensuring that regulation is consistent, proportionate and effective. The Regulatory Reform Bill has been introduced to further improve the way regulations are applied in practice across Scotland. The Bill will streamline and make regulation more effective, and includes powers to encourage consistency through national standards and systems and a duty on regulators to contribute to sustainable economic growth. The Scottish Government will also review the legislation and procedures governing Scotland's interests in mineral and other natural resources, and consult on the development of provisions for inclusion in a future Bill. We will shortly introduce the Procurement Reform Bill, which will establish a national legislative framework for sustainable public procurement that supports Scotland's economic growth. Framed within EU procurement law, the Bill will help to accelerate improvements in the procurement system and to ensure that doing business with the public sector is simpler, more transparent, and more accessible to suppliers, especially SMEs.

Revenue Scotland and Tax Powers Bill

The Revenue Scotland and Tax Powers Bill will establish Revenue Scotland as the tax authority which will be responsible for collecting Scotland's devolved taxes from 1 April 2015 - an important first step in taking on greater responsibility for setting and collecting taxes in Scotland.

The Scottish Parliament has passed legislation which will replace the current UK Stamp Duty Land Tax with a more progressive Land and Buildings Transaction Tax. It is also currently considering a Bill to introduce a new Scottish Landfill Tax, which will replace the existing UK landfill tax. The new devolved taxes are expected to come into force on 1 April 2015. The Revenue Scotland and Tax Powers Bill will put in place powers, duties and other provisions which will apply to both Revenue Scotland and taxpayers of devolved taxes. For example, Revenue Scotland will be under a duty to provide information and guidance to taxpayers; and taxpayers will be required to ensure that they declare and pay the right amount of tax. The Bill will also include arrangements for resolving tax disputes quickly and efficiently, and for effectively combatting avoidance of devolved taxes.

The legislative framework provided by the Bill will apply to all devolved taxes. It will not, however, apply to the Scottish Rate of Income Tax (SRIT) which the UK Government plans to introduce in April 2016. SRIT is the rate of income tax payable by Scottish taxpayers to be set by the Scottish Parliament in respect of income tax which is not devolved and will therefore be administered by HM Revenue & Customs (HMRC).

37. In contrast to the UK Government, which abolished its Regional Development Agencies, the Scottish Government has retained its Enterprise Agencies, Scottish Enterprise (SE) and Highlands & Islands Enterprise (HIE). These bodies provide substantial support to companies, and work closely with them to help them realise their growth ambitions. They work most intensively, through their account management programmes, with those companies that will make the biggest difference to Scotland's economic performance. In 2012-13, SE had 118 offers of Regional Selective Assistance accepted, totalling £43 million. These offers secured planned capital expenditure of £216 million and are expected to create or safeguard 4,766 jobs. SE's equity funds have invested £197 million and leveraged a further £391 million through private sector partners. HIE has invested in energy infrastructure across the region with developments at Nigg; Wind Towers (Scotland) Ltd at Machrihanish; Arnish Business Park; European Marine Energy Centre (EMEC) and Scrabster Harbour; and has also signed a contract with BT for a £146 million project to roll out next generation broadband across the Highlands and Islands.

38. In addition to the support provided through the Enterprise bodies, this Government continues to support local authorities in delivering local economic development. This includes their management of the local delivery of the Business Gateway service, and ensuring a greater focus on economic development in the new Single Outcome Agreements. Business Gateway assists, on average, around 10,000 new businesses to start-up each year, while providing a wide range of advice and support to existing businesses. Four Enterprise Areas comprising 15 strategic sites in some of Scotland's most dynamic industries are now open for business.

39. Access to affordable finance is vital to ensuring that viable businesses are able to grow and support employment, and to facilitate greater levels of investment in the economy. Business investment remains considerably lower than pre-recession levels, whilst there are continued challenges in the demand for, and supply of, finance. Evidence from a range of sources, including the Scottish Government SME Access to Finance survey, and lending statistics from the Bank of England, highlights that securing access to affordable finance remains an issue for many SMEs.

40. The Scottish Government's powers are limited in this area. However, where possible, action is being taken to address constraints in the supply of finance. The Scottish Government continues to work in partnership with banks, through SE and HIE, to help companies improve their chances of securing funding. Action continues to be taken to encourage greater levels of private sector investment and growth, building on Scotland's strong Business Angel Community, and the Scottish Government is considering the business case for the creation of a 'Scottish Business Development Bank'.

41. Through the Scottish Investment Bank, the Scottish Government is continuing to deliver equity investment schemes, utilising European Structural Funds and leveraging private sector investment, increasing both the number of deals and number of active private sector investors. The Scottish Loan Fund (recently increased to £113 million), introduced by the Scottish Investment Bank, supports growth and exporting companies to access loans from £250,000 to £2 million. To date it has distributed £21.5 million, with the potential for this to increase to £30 million.

Conclusion of Contracts Bill

The Conclusion of Contracts Bill is intended to make it easier for companies to formally 'sign' and conclude contracts. In doing so, the Bill will promote business and economic growth, consistent with the Digital Scotland agenda, and will modernise Scots law in this area.

The Bill will implement the recommendations contained in the Scottish Law Commission's Report Formation of Contract: Execution in Counterpart. The main provisions of the Bill will:

- make it possible for the parties to a contract to sign separate copies of the contract and exchange them to create a valid contract rather than having to meet together to sign the same document; and

- provide a mechanism to enable documents created on paper to be delivered by e-mail or fax for contractual purposes.

Bankruptcy Consolidation Bill

The Bankruptcy Consolidation Bill will update Scotland's bankruptcy legislation in order to ensure that Scottish bankruptcy law is readable, accessible and easier for both practitioners and those affected by the law to use.

The Bill follows a programme of consultation and engagement with stakeholders and an extensive programme of legislation to make changes to bankruptcy law (via the Bankruptcy and Debt Advice Bill), as well as regulatory changes to the successful Debt Arrangement Scheme, Protected Trust Deeds and the rules for corporate insolvency in Scotland. The Scottish Government has worked with the Scottish Law Commission in preparing the Bill.

Rebalancing the Economy

42. As recovery begins to take hold, the Scottish Government continues to support the conditions that will underpin sustainable economic growth within the Scottish economy over the longer term. This means continuing to focus our attention on improving the drivers of growth identified in the Government Economic Strategy - Productivity, Participation and Population Growth - while ensuring that growth is consistent with Solidarity, Cohesion, and Sustainability.

43. Efforts around supporting an investment-led recovery, tackling unemployment and lack of opportunity, enhancing economic confidence, and promoting business development play a part in this. However, they are not sufficient in and of themselves. Supporting innovation will help build the firms and sectors of the economy that have the potential to drive future growth. Supporting internationalisation will help Scottish companies take advantage of emerging opportunities in global markets. Finally, the transition the Scottish economy must make to being a low carbon economy lowers costs in the future: both in terms of future costs of carbon and lost growth opportunities as other countries embrace low carbon objectives.

Supporting Innovation

44. Innovation performance in Scotland has traditionally been mixed. Scotland has a world-class research reputation, while Scotland's expenditure on Higher Education Research and Development (HERD) as a percentage of GDP ranked first compared to the other countries of the UK and among the top quartile of OECD countries in 2011. Investment by business in R&D has traditionally not been as strong, with Scotland being ranked in the fourth quartile of OECD countries that reported Business Enterprise Research and Development (BERD) expenditure as a percentage of GDP in 2011.

45. However, there has been a significant increase in Scotland's BERD expenditure in Scotland over recent years, with expenditure rising by 15.7 per cent in real terms between 2007-11, while UK expenditure increased by only 1.2 per cent over the same period. The Scottish Government is aiming to build on the success of the HERD sector and recent improvements in BERD, and ensure that this investment pays off for the wider Scottish economy. It is therefore increasing the HE Research Excellence Grant by 2.5 per cent in 2013-14, and taking forward a co-ordinated range of actions to support better linkages between universities and businesses to strengthen innovation and commercialisation across Scotland. These include:

- committing a minimum of £45 million annual expenditure in each year of the 2012-15 Spending Review to SMART: SCOTLAND - the banner under which a range of support for innovation and entrepreneurship sits;

- the Scottish Funding Council investing £30 million over the next 2 years to support the development of a number of Innovation Centres, where businesses and universities will work together to drive innovation in and across Scotland's key economic sectors;

- developing a co-ordinated approach to knowledge exchange, building on the success of Interface, a uniquely Scottish model that matches businesses with academics to encourage the utilisation of the world-class knowledge and expertise which resides in Scotland's universities and research institutions;

- funding Creative Scotland's support for creative industries, including the £500,000 Digital R&D Fund for Arts and Culture in Scotland, in partnership with the Arts & Humanities Research Council and Nesta; and

- supporting Easy Access IP, which allows intellectual property not being used by universities to be released free of charge to companies via quick and simple agreements.

46. The Scottish Government will continue to support engagement in UK and European R&D and innovation programmes, building on recent successes such as: the Technology Strategy Board's Offshore Renewable Energy Catapult in Strathclyde University; the headquartering of Fraunhofer UK Research limited in Glasgow, and the establishment of the UK's first Fraunhofer Research Centre in Applied Photonics; and participating in the European Innovative Medicines Initiative, the biggest ever investment of its kind in Scotland for researching new drug treatments.

Investing in High Speed Broadband

The Scottish Government aims to transform Scotland into a world-leading digital nation by 2020, as set out in Scotland's Digital Future - A Strategy for Scotland. Over £410 million of public and private funding is being invested in two of the largest and most complex broadband infrastructure projects in Europe to deliver next generation access to communities in those areas where the market will not go. These projects will close the digital divide and lay the foundations of a world-class digital nation, ensuring that 85 per cent of Scottish premises have access to fibre broadband by the end of 2015-16 and around 95 per cent by the end of 2017-18.

HIE awarded a contract to BT in March this year to roll out next generation broadband across the Highlands and Islands. The project will involve 800 km of new fibre on land across a particularly challenging landscape and 400 km of sub-sea cables to provide 19 crossings to remote islands, and is one of the biggest sub-sea engineering projects BT has undertaken in the UK. The total project value is around £146 million, with the Scottish Government's broadband fund having invested around £120 million.

Around £157.6 million of public sector funding is being invested in the Rest of Scotland project to deliver fibre broadband to over 600,000 homes and businesses in 130,000 postcode areas. Initial priority will be given to rural small- and medium-sized businesses to encourage economic growth in hard-to-reach areas. The public sector contribution has been strengthened with additional funding from 14 local authorities who are investing £51 million to increase coverage, meet local priorities and address the digital divide in their areas. The funding package includes Scottish Government broadband funding, £50 million from Broadband Delivery UK, and a £106.7 million investment by BT.

Internationalisation

47. As an open economy, international trade and investment is vital to Scotland's future economic performance. The GES set an ambitious target for Scottish businesses to deliver a 50 per cent increase in the value of international exports by 2017, over and above exports of oil and gas or to the rest of the UK.

48. This target is highly ambitious and challenging to achieve. Meeting this target will be strongly influenced by the competitiveness of Sterling and the economic performance of key trading partners such as the European Union and the USA. However, substantial progress is being made. According to the Global Connections Survey, Scottish international exports have increased from £22.3 billion in 2010 to £23.9 billion in 2011. This represents an increase of 7 per cent between 2010 and 2011, which is broadly in line with the average annual growth estimated to be required to meet the export target. However, economic conditions in other countries have created significant headwinds, with recent data on manufactured exports for the first quarter of 2013 showing an annual decline of 1.4 per cent in Scottish manufactured exports outwith the UK.

49. Partnership working across both the private and public sectors is key to delivering this target. The Scottish Government, through its trade and investment arm Scottish Development International (SDI), is working alongside SE and HIE to increase the volume and value of international exports from Scotland as well as the number of exporters. The role of business organisations, the industry leadership groups, and initiatives such as Smart Exporter, the Scottish Investment Bank, and International Projects, are key in providing targeted support to firms looking to export into foreign markets.

50. The Scottish Government is determined to build on Scotland's strong recent inward investment record. Scotland's International Trade and Investment Strategy has set a target of 25,000-35,000 planned jobs through the attraction of inward investment between 2011 and 2015. SDI and its partners are on track to achieve this, with SDI support having created or safeguarded over 33,000 planned jobs in Scotland since 2008. The Ernst & Young UK Attractiveness Survey 2013 shows that Scotland remains an attractive target for Foreign Direct Investment (FDI). Scotland accounted for 16 per cent of UK FDI job creation and was close to topping the UK table for a third consecutive year. Scotland secured 76 inward investment projects from outside the UK in 2012, a 49 per cent increase on the previous year, and the highest number of projects from outside the UK since 1997.

Attracting New Investment to Scotland

Through engagement with other countries and the business sector in London, including Ministerial visits across Europe, the Middle East, Asia and the Americas, Scottish Development International (SDI) has been able to emphasise the range of expertise and resources that Scotland has to offer, and to attract new investment to Scotland.

Planned inward investment from projects announced in 2012-13 amounts to around £500 million, attracting over 7,000 planned jobs to Scotland. This includes investment from companies such as Blackrock International, Hutchison 3G, GlaxoSmithKline, Daktari Diagnostics, Wipro, Aker Subsea, Capgemini and Samsung Heavy Industries.

Sony Pictures' television series Outlander, to start filming in September 2013, is Scotland's biggest ever film or television inward investment, and will commission 200 Scottish-based crew, and over 2,000 extras.

51. The GES and the Purpose continue to drive the Scottish Government's strategic engagement with other countries. Over the past 4 years, this Government has published new or updated plans setting out the detail of how it will engage with Europe and the EU, China, India, Pakistan, South Asia, Canada and the United States of America across a range of policy areas, as well as trade and investment.

52. This Government also remains committed to tourism as one of Scotland's key growth sectors, and is working closely with the tourism industry on the industry-led tourism strategy Tourism Scotland 2020. VisitScotland will continue to support the Scottish tourism industry to maximise growth through working with a wide range of partners to maximise tourism opportunities, and is delivering key Scottish Government initiatives such as Homecoming Scotland 2014. Together with the Commonwealth Games and the Ryder Cup, these events will act as a catalyst for the tourism sector in a year in which 'Scotland Welcomes the World'. They provide an unprecedented opportunity to showcase Scotland on an international stage, build an economic legacy through a focus on business and export promotion, and capture Scotland's image and place in the world.

Transition to a Low Carbon Economy

53. The Scottish Government's ambition to capture the opportunities from the transition to a low carbon economy is a central part of the GES. Scotland's opportunity lies in its competitive advantages: Scotland can become a world leader by capitalising on its abundant natural resources and its academic and engineering excellence. As Scotland adapts, new exportable skills and jobs will be created in the services and manufacturing sectors to support the transition. It is estimated that there could be up to 130,000 jobs across the low carbon economy by 2020.

54. Renewable energy lies at the heart of the Scottish Government's strategy to grow a low carbon economy. Department of Energy and Climate Change figures show that private sector investment announcements between January 2010 and April 2013 for projects in Scotland equate to investment of over £13 billion.

55. The renewables sector goes from strength to strength, with the sector already employing over 11,000 people in Scotland. In the last year, three marine renewables projects in Scottish waters secured UK Government and European Commission funding; and consents were granted for the world's largest wave farm - a development by Edinburgh firm Aquamarine Power - off the north-west coast of Lewis, and for the development of the European Offshore Wind Deployment Centre in Aberdeen Bay. This year also saw the European Marine Energy Centre (EMEC), the world's only accredited marine energy laboratory, celebrate 10 years of real-sea experience.

56. The Scottish Government, working with SE, HIE and SDI, aims to build on these successes and capitalise on Scotland's advantages (including the location of the Green Investment Bank in Edinburgh) to help growth in the sector. The Renewable Energy Investment Fund (REIF), based on £103 million of Fossil Fuel Levy funding and designed to help lever additional funds, is aiming to complete a large number of investments in 2013-14. The £70 million National Renewables Infrastructure Fund is supporting delivery of the National Renewables Infrastructure Plan, and will help to attract major infrastructure investment in key projects in Scottish ports. The Energy Skills Challenge Fund, delivered by SDS, will provide at least 1,000 transitional training places in 2013-14 to those with relevant transferable skills and experience to allow them to take up vacancies in the energy sector, while the Low Carbon Skills Fund, managed by SDS, makes funding available to Scottish SMEs to support training around sustainable energy and reducing resource use.

57. The transition to a low carbon economy also requires broader action around energy efficiency and resource use. The progress review of the 2010 Energy Efficiency Action Plan, published in May 2013, confirmed that we are more than halfway towards achieving the 12 per cent absolute reduction in final energy consumption by 2020 against the 2005-07 baseline.

58. Resource Efficient Scotland, which has simplified the Scottish Government's information, advice and support services, will assist business, the third sector and public sector to implement energy, material resource and water efficiency measures that translate into cost savings, increased competitiveness and reduced emissions. The Scottish Government set out the draft Heat Vision Statement for Scotland in January 2013, with a commitment to develop a Heat Generation Policy Statement, and to produce Scotland's first Heat Map by Summer 2014. The Scottish Government is also taking further steps to deliver the ambitious Zero Waste agenda, including issuing a resource efficiency strategy, and working with stakeholders to shape the next set of actions to create a zero waste economy.

Creating the Conditions for Delivering Sustainable Economic Growth

59. The GES provides a flexible and adaptable framework to support the Scottish economy. This allowed the public sector to quickly mobilise resources to help the Scottish economy weather the economic downturn, and now assist in accelerating recovery. It also guides the public sector's efforts to help build the foundations for long-term sustainable economic growth.

60. The priorities in the GES continue to inform policy and spending decisions to deliver long-term sustainable economic growth. The Scottish Government is focused on creating the conditions for sustained growth in the private sector, investing in public services, and ensuring that there are opportunities for all of Scotland to flourish.

Chapter 6: Creating a Fairer Scotland and Empowering Communities

1. Tackling the inequalities that have existed in Scotland for decades is critical to creating a more successful country. To achieve that goal, the conditions must be established to make the most of the talents that too often lie dormant in all of Scotland's communities.

2. High quality public services continue to be a cornerstone of Ministers' ambitious vision for Scotland. They have the power to give Scotland's children the best start in life; to reduce the inequalities which people and communities face; to help develop Scotland's economy and create jobs; and to ensure sustainable use of Scotland's environment.

3. Ministers are proud of Scotland's public services, and believe the people of Scotland place a high value on them too, recognising the role they play in creating a strong economy and a fairer society. The Scottish Government is leading the transformation of Scotland's public services with a comprehensive set of flagship reforms, taking decisive action across the range of its responsibilities not only to protect public services but to improve them.

4. Empowering communities to work with local service providers to design and deliver innovations that improve outcomes for local people is at the heart of the Scottish Government's approach to public service reform. It is the responsibility of those in the public, third and private sectors to work together to recognise and support those community assets.

5. Ultimately, it is only with the full range of fiscal powers and the confidence that comes with being an independent nation, that we will be able deliver a fairer, more empowered and just country, where everyone regardless of their background can make a full contribution.

6. However, this chapter shows that within existing powers, the Scottish Government and its partners have done much across the range of its current responsibilities to make Scotland a fairer and more empowered society, and ambitions for the next year remain high.

Empowering Communities

7. Scotland's people are its greatest asset, and their role is critical to achieving better outcomes for the country. The Lerwick Declaration this summer made clear that this Government believes that the people who live and work in Scotland are best placed to make decisions about Scotland's future. This commitment to self-determination, subsidiarity and local decision-making underpins the Scottish Government's approach to encouraging all of Scotland's communities to flourish and prosper.

8. Scotland has a rich heritage of volunteers and community groups like development trusts, housing associations and community councils, all of whom contribute a great deal to their local areas. Scottish Ministers recognise the need to do more to enable these groups and people to take independent action to achieve their own goals, and to work in partnership with the public, private and third sectors to deliver a range of improved social, economic and environmental benefits for the local area.

9. That is why the Scottish Government has announced proposals for a Community Empowerment and Renewal Bill that will remove barriers, promote good practice and bring consistency in a number of areas to help achieve this aim, building on the wide range of existing work described in this chapter (see for example paragraphs 43-45).

Community Empowerment and Renewal Bill

High quality public services have the power to give Scotland's children the best start in life, to reduce the inequalities which people face, to develop the economy and create jobs, and to ensure we manage the environment sustainably. However, to truly have the public services that local people most value we must empower communities, freeing them to take independent action to achieve their own goals and enabling them to work in partnership with the public, private and third sectors to deliver a range of improved social, economic and environmental benefits for their local areas.

The Community Empowerment and Renewal Bill will set out measures designed to: strengthen joint working and accountability in Community Planning Partnerships; strengthen community voices in shaping and delivering outcomes; make it easier for communities to take on public sector assets; streamline the community right to buy; bring clarity to the common good and allotments; and make it easier for local authorities to recover costs in respect of dangerous and defective buildings. The Scottish Government will consult on a draft Bill and detailed policy proposals shortly.

Transforming Scotland's Public Services

10. Scotland's public services cannot be transformed without bringing together the skills, knowledge and expertise of all those involved in public services, including the vital contribution that local people and communities can make. The collaborative ethos that has characterised the Scottish Government's approach to government since 2007 is at the heart of its approach to reform.

RCAHMS and Historic Scotland Merger Bill

The RCAHMS and Historic Scotland Merger Bill will support the ability of Scotland's historic environment to make a strong contribution across a wide range of policy areas through the creation of a single lead body for Scotland's historic environment.

This will be achieved through combining the functions of Historic Scotland (which currently carries out many of Ministers' responsibilities) and the Royal Commission on the Ancient and Historical Monuments of Scotland (RCAHMS) to create a new non-departmental public body (NDPB).

The Bill will include provisions to ensure the new body has the remit and capacity to play the key role in investigating, recording, caring for, protecting and celebrating our historic environment, and in doing so support and enable partners, stakeholders, communities and individuals to play their vital parts in these endeavours. The creation of the new lead body is a key element in a sector-wide collaborative strategy, and a significant contribution to public service reform. Public consultation on both the merger proposals and the strategy took place between 8 May and 31 July 2013.

11. The Scottish Government is working closely with local government and other public sector partners, along with the third and independent sectors, so that services are designed and delivered in a way that is close to the people they are designed to serve.

12. Community Planning lies at the core of the transformation of Scotland's public services. It provides the foundation for the partnership working necessary to deliver public services that are responsive to the people they are designed with and for. The Scottish Government and the Convention of Scottish Local Authorities (COSLA) joint Statement of Ambition on community planning provides a clear agenda for making community planning much more effective in responding to the needs of communities.

13. The Scottish Government is taking forward that agenda through:

- the establishment of the National Community Planning Group to provide strategic leadership and direction;

- proposing legislation in the Community Empowerment and Renewal Bill to strengthen Community Planning Partnerships (CPPs), and ensure all partners play a full role in partnership working and the delivery of local outcomes; and

- guidance on new Single Outcome Agreements centred on the needs and priorities of local communities, on public services working together to achieve shared outcomes, and on making the decisive shift to prevention.

14. Scotland is leading the way on making the shift to preventative approaches, which prioritise early intervention to prevent risks to the individual and society from materialising later. In addition to reducing demand for public services, this approach will help to tackle the cycles of inequality and disadvantage that blight the life chances of so many people. The catalyst for this has been the £500 million invested in three Change Funds over the Spending Review period 2012-13 to 2014-15. These focus on:

- giving Scotland's children the best possible start in life;

- supporting older people to enjoy full and positive lives in their own homes or in a homely setting; and

- working with people serving sentences in the community or short-term custody so that they can fulfil their responsibilities as citizens and move away from offending.

15. The radical programmes these Change Funds support are together embedding the ethos of prevention. This can be seen in projects such as mentoring programmes set up in prisons, and family nurse partnerships giving support and increased confidence to new mothers. A key challenge for the coming year will be for these approaches to spread and become the default option across all public services.

16. The Scottish Government has recognised the key role of the third sector in enabling early intervention. It has invested in and developed with the sector a number of partnership initiatives to support the sector in making its contribution, in areas such as reshaping care for older people and work with children and families.

17. In addition to the Early Years Change Fund, the Scottish Government has announced £30 million in funding to the third sector, in the form of £20 million through the Third Sector Early Intervention Fund, and £10 million through strategic funding partnerships.

18. Shifting the focus of Scotland's public services to prevention and shaping them around the needs of people and communities is central to the Scottish Government's approach to reform, and no-one is closer to local people than the third sector. The Public-Social Partnerships model is empowering communities, the third sector and public sector to create practical local solutions. The Scottish Government is backing this innovative model as part of its approach to maximise the vital contribution the third sector can make in creating person-centred services which meet multiple and complex needs.

Promoting Equality and Fairness

19. The Scottish Government sees equality and social justice as central to its vision for a fairer Scotland. As such it attaches great importance to its work to:

- promote equality and human rights;

- recognise and engage the talents and assets of Scotland's people in all their diversity;

- tackle prejudice, discrimination and inequality; and

- focus energies on improving the life chances and outcomes of individuals and communities.

20. In this time of spending pressures, the Scottish Government has maintained significant levels of support and funding to strengthen the third sector, building social enterprise and entrepreneurship, supporting volunteering and developing the infrastructure at both a national and local level. In particular, the Scottish Government has continued to invest in:

- Just Enterprise, delivering a programme of work that promotes the ongoing growth and sustainability of an enterprising third sector in Scotland through provision of business support and learning and development services;

- Ready for Business, enabling greater opportunities for the third sector to be involved in the design and delivery of public services; and

- supporting the 32 Third Sector Interfaces to ensure that the third sector is effectively represented at each Community Planning Partnership.

21. The Scottish Government also continues to invest in frontline support across Scotland, such as supporting rape crisis centres and a network of workers supporting children and young people affected by domestic abuse. The Scottish Government is supporting a range of projects to promote equality and address inequality, and to challenge the attitudes which fuel hate crime, sectarianism and intolerance. It is ensuring that Scotland's work to promote and protect human rights is captured in reporting on progress to implement international human rights conventions, and is working with the Scottish Human Rights Commission to support their development of a Scottish National Action Plan on human rights.

22. In addition, over the past year the Scottish Government has put in place a number of specific interventions which will advance equality in Scotland. We have:

- organised a very successful Women's Employment Summit in September 2012, resulting in the creation of a Strategic Group on Women and Work, to take forward workstreams to address the specific issues affecting women's access to employment and participation in the labour market;

- introduced the Children and Young People Bill, which will increase the amount and flexibility of early learning and childcare to 600 hours for 3 and 4 year olds and for 2 year olds who are looked after or under a kinship care order from August 2014;

- introduced the Marriage and Civil Partnership Bill to allow same sex couples to marry in Scotland, and enable transgender people to remain in a marriage or civil partnership once they have transitioned;

- initiated work to develop a Violence Against Women Strategy for Scotland involving key partners;

- established the Early Years Collaborative to make Scotland the best place in the world to grow up in by improving outcomes and reducing inequalities for all babies, children, mothers, fathers and families across Scotland, to ensure that all children have the best start in life and are ready to succeed;

- introduced a robust set of duties in May 2012 to support public bodies to deliver on equality and to improve outcomes for people in Scotland;

- undertaken a refresh of the refugee integration strategy, which will build on the progressive approach taken by the Scottish Government to the integration and support for asylum seekers and refugees to date;

- initiated work to develop the Scottish Government's approach to race equality with communities and stakeholders, with a view to publishing the statement in Spring 2014;

- created an Equality Evidence Finder web resource to increase access to the wealth of data and evidence on equality; and

- undertaken equality analysis and assessment of the Scottish Government's spending plans and published an Equality Budget Statement to accompany the draft budget.

23. During the year ahead, the Scottish Government will also take forward development of a Lobbying Transparency Bill, and in doing so will seek to build cross-party and stakeholder consensus.

Education and Lifelong Learning

24. Education is the most important foundation in life. For children in the early years, Scottish Ministers want to make Scotland the best place in the world to grow up. In Scotland's schools, they seek to provide the best possible education backed by an exceptional teaching workforce. In Scotland's colleges, they want people to have opportunities to develop skills that help them get a job, get a better job and develop their career. For universities, they seek excellence and ambition, while ensuring that education in Scotland is always based on the ability to learn, and not on the ability to pay.

25. The Scottish Government has put in place a clear and coherent framework for progress across all these areas and, over the last year, this has continued to deliver as described below.

Early Years

26. The Scottish Government and its partners are taking a different approach from other parts of the UK to supporting the early years. It is built on a common set of principles: that services should be child-centred; that the needs of a child are addressed in the round; and that early intervention reaps considerable benefits.

27. The Scottish Government and its partners are working towards building a high quality, universal system for all children, where the most vulnerable benefit most; and where this is achieved in a manageable, affordable and sustainable way. This approach is based on a significant shift to preventative spend, and on closer partnership working.

28. Over the last year, significant progress has been made:

- The Children and Young People Bill has been introduced - this will provide the legislative framework to improve levels of care and support to children and families, and add momentum to the implementation of the Getting it Right for Every Child (GIRFEC) approach;

- the Scottish Government has provided a £270 million Early Years Change Fund with NHSScotland and local government;

- a Play Strategy has been delivered to ensure that the value of play is recognised throughout society - and a National Parenting Strategy, supported by an £18 million investment, to encourage agencies to work together to support families across Scotland;

- the Children's Hearings System has been reformed, with the new system having gone live in June 2013; and

- the Early Years Collaborative - the world's first national, multi-agency quality improvement collaborative - is now working across Scotland to give children the best start in life.

Early Years Collaborative

The stated ambition of the Early Years Collaborative (EYC) is to make Scotland the best place in the world to grow up, by improving outcomes and reducing inequalities for babies, children, mothers, fathers and families across Scotland, to ensure that all children have the best start in life and are ready to succeed.

We know there is strong evidence about costs and outcomes of current and desired practice, but much of this is not being used in daily work. In other words, there is a gap between what we know works and what we do.

The EYC helps organisations to close that gap by:

- creating a structure in which partners can easily learn from each other and from recognised experts in areas where they want to make improvements; and

- supporting the application of improvement methodology to bridge the gap between what we know works and what we do.

The tests of change being undertaken by Community Planning Partnerships cover a wide range of themes: for example, increasing the uptake of healthy start vitamins; increasing the number of children who have a bedtime story read to them; and speeding up permanency planning for Looked After Children.

29. Over the year ahead, the Scottish Government will:

- by August 2014, use the new powers in the Children and Young People Bill to increase free and more flexible provision of early learning and childcare from 475 to 600 hours per year for 3 and 4 year olds, and looked after 2 year olds - an increase of 45 per cent from 2007, and benefiting around 120,000 children in Scotland;

- publish an action plan for delivering the outcomes of the National Play Strategy;

- continue to prioritise investment in the first years of life - where actions will have the biggest impact - and preventative spend at the earliest point where problems emerge. The Scottish Government's Early Years funding and the Third Sector Early Intervention Fund will work to improve life chances, building capacity within the third sector to deliver vital services to those who need them most;

- embed early intervention and prevention work, including targeted measures for looked after children and young people, children and young people at risk of going into care, and young people who offend;

- through the Early Years Collaborative, make further progress towards stretching and specific targets to reduce stillbirth and infant mortality, and to improve child development in the early years; and

- publish a revised Child Poverty Strategy in 2014, building on the current approach and continuing to focus on improving household incomes and children's life chances. This will involve the Ministerial Advisory Group on Child Poverty in shaping the way forward, and build on a range of actions including commitments to increase childcare provision and create employment opportunities.

Schools

30. Ministers have an ambitious plan for success in Scotland's schools. Over the last year, the following progress has been made:

- record highs in the number of school leavers achieving sustained positive destinations: 85.9 per cent in March 2013;

- halted the decline in teacher numbers since 2007, and lowered teacher unemployment to monthly levels below that in each of at least the last 4 years;

- continuing Educational Maintenance Allowances, which were scrapped in England, and extending the free school meals entitlement to more children and young people from low income families than ever before, benefiting around 17,000 extra children; and

- ensuring that 89 per cent of all primary and secondary schools are meeting the target level of PE provision per week to all pupils - up from 85 per cent in 2012 and 10 per cent in 2004-05.

31. Curriculum for Excellence is the Scottish Government's long-term plan, taking Scottish education in a different direction from other systems in the UK. Through Curriculum for Excellence, children are not merely being provided with the knowledge itself - but, rather with the capacity to acquire knowledge and to learn and re-learn.

32. The Scottish Government has worked with its partners, both nationally and locally, to ensure that Curriculum for Excellence has been successfully implemented on schedule across Scotland, and there is already evidence from inspection reports and performance surveys of its success. The Scottish Survey of Literacy and Numeracy shows high levels of performance in both literacy and numeracy. For example, the 2012 survey shows that more than 90 per cent of pupils are within or above expected reading and writing levels. The first group of learners began their senior phase of Curriculum for Excellence in 2013.

33. Over the coming year, the Scottish Government will:

- continue to improve the level, focus and frequency of evidence used by education staff to improve standards and drive up attainment. This includes launching the Senior Phase Benchmarking Tool by August 2014, which will enable teachers, schools and local authorities to assess, and improve on, their pupils' achievements against four priority national measures;

- take forward a range of activity to better engage parents in their children's learning. This includes the redesign of Scottish Schools Online to provide parents with an easy-to-navigate site for accessing all relevant information about their child's school, and to enable useful and relevant comparisons to be made with other schools;

- continue to work closely with teachers to provide the support they need to deliver Curriculum for Excellence with confidence. This includes progressing the recommendations made in Teaching Scotland's Future relating to improving the quality of the teaching workforce and building leadership capacity across the education system, including through establishing a national leadership college for education;

- drive forward work to create the conditions in which all young people will have the opportunity, by 2020, to learn two languages in addition to their mother tongue (the '1+2 model'). This new model for language learning aims to ensure that young people are attracted to learning modern languages and that they become confident and competent linguists, well equipped with the skills and capacities needed to flourish in the 21st century global marketplace; and

- consult on proposals to legislate in line with the manifesto commitment to introduce an entitlement to Gaelic medium education where reasonable demand exists. The aim of this is to strengthen Gaelic medium education in Scottish schools, and to increase the number of people learning, speaking and using the Gaelic language.

34. Raising attainment in our schools, particularly for those from more deprived backgrounds, is an overriding priority. We will achieve this through:

- more effective leadership at every level in the education system;

- using improvements in class sizes to help address inequalities in educational outcomes;

- more effective interventions in raising attainment. Education Scotland is taking forward a new programme for a nationally co-ordinated initiative for school improvement partnering. This will partner schools or clusters to work with each other to tackle the effects of disadvantage on educational achievement. The Self-improving Schools Partnership Programme is an aspect of a solution-focused approach to Scotland's attainment issues. The scheme has been designed to allow schools and partner agencies to work together to promote an even deeper understanding of their collective responsibility to Scotland's children and young people;

- improving the evidence and data available to the education system - at different levels, and of the right kind at each level - to support positive change. This includes a review of Scottish Schools Online, combining this with other information to parents to improve the accountability to the public of schools' performance, in line with the sorts of information and evidence that parents find useful, as shown by the consultation on the Schools Handbook;

- better engagement with parents, other agencies and the community if the education system as a whole is to improve how it reaches towards eradicating the inequity in educational outcomes still found in Scotland; and

- innovation to support improvement in our existing system, involving partnership with COSLA and the Association of Directors of Education in Scotland (ADES) to create a guiding coalition to deliver such innovation.

Further and Higher Education

35. Scotland's colleges and universities are key to achieving sustainable economic growth, and securing the country's long-term economic prospects by providing a highly skilled workforce and world-class research base.

36. Scottish Ministers believe that education should be within the reach of all, and that educational opportunity should be based on the ability to learn, not the ability to pay. Therefore, in contrast to other parts of the UK, Ministers have maintained their commitment to free higher education for Scottish students, and are providing Scottish students with the best package of student support in the UK.

37. The Scottish Government has increased funding for universities by 15 per cent over this Spending Review period and, in its last budget, delivered an extra £61 million to colleges over 2 years, setting a funding floor of £522 million for the sector. Resource budgets for colleges are now higher than in every year under the previous administration, while college restructuring is set to deliver savings of around £50 million per annum from the end of the next academic year.

38. Achievements over the last year include:

- successful passage of the Post-16 Education Act, providing a legislative framework for new governance arrangements in colleges and universities, and for widening access agreements;

- delivering 119,448 funded FTE places in Scotland's colleges in academic year 2011-12: 3 per cent over the commitment of 116,000;

- setting in train an unprecedented programme of college mergers: Edinburgh College and the Scottish Rural University College in 2012; Ayrshire College, Glasgow Clyde College, West College Scotland, and Fife Colleges already in 2013;

- providing for a record high number of young people to attend full-time courses at colleges;

- continuing to make good on Ministers' commitment to restore free higher education - benefiting 125,000 students, and saving them up to £27,000 compared with the cost of studying in England;

- providing for record numbers of full-time students to study in Scottish universities in academic year 2011-12, with the expectation that those numbers be maintained in the year ahead;

- delivering on the commitment to give the poorest students a minimum income of £7,250 per year in maintenance support from academic year 2013-14;

- for the first time, a commitment to providing full tuition-fee funding for part-time students with an income under £25,000 a year, for academic year 2013-14; and

- improving the college estate: Inverness College's £50 million new campus is in construction, and is the first new college delivered by the Non Profit Distributing (NPD) model. Further investment will see construction work begin on college estates in Glasgow and Kilmarnock in the upcoming academic year.

39. During the year ahead, the Scottish Government will:

- implement the Post-16 Education Act, including making necessary secondary legislation, strengthening college and university governance, and delivering further progress through Widening Access Agreements to ensure that more students reach their potential, regardless of background;

- complete college mergers, improving choice and quality for learners and employers, and delivering estimated annual efficiencies of around £50 million from 2014-15;

- put in place a national bargaining structure for college sector pay;

- oversee further improvements in the college estate through NPD investment in Glasgow and Kilmarnock; and

- establish more innovation centres within Scotland's universities, and provide an additional £13.8 million to support continued research excellence and the international standing of universities.

Rural Affairs and the Environment

40. This Government's vision for Scotland is of a nation where people value the natural environment; have access to the services to thrive wherever they might live, and where every effort is made to ensure growth and opportunity exist across all of Scotland.

41. Scotland is rich in natural resources; they are central to our identity as a country and as a people. They underpin the growth of thriving communities and Scotland's rural economy: with the industries of tourism, farming, fishing, and food and drink, as well as new opportunities in renewable energy.

42. The Scottish Government is committed to ensuring that Scotland's natural resources, both on land and in our seas, are sustainably managed so that they continue to provide benefits for current and future generations.

Empowering Scotland's Rural Communities

43. Empowering rural communities throughout Scotland helps to develop strong, resilient communities where people have a greater say and more responsibility for their own futures, and so that they can derive maximum community benefit. The Scottish Government has taken action towards this by:

- promoting community benefits from commercial renewables and aquaculture schemes in 2012, which saw around £6 million distributed to communities, mainly from onshore wind - providing support for schemes ranging from community transport to youth groups;

- continuing towards our 2020 target for 500 MW of community/locally-owned renewables. There is now more than 200 MW of community and locally-owned renewable generating capacity across Scotland, an increase of 39 per cent on the previous year;

- supporting in 2012-13, through the LEADER scheme, over 300 projects, to the value of over £6 million that are providing community benefit (approved by Local Action Groups);

- incorporating 12 proposals from communities and other organisations in the network of Marine Protected Areas, which will be implemented in the Marine Acts;

- pledging £2 million over 2012-15 to support food education in schools, to ensure every Scottish school pupil understands more about the food they eat and how it impacts on their health and on the environment. As part of this pledge we have launched a £1 million teacher-driven food education fund for schools, to help our young learn about the food journey from plough to plate over 2013-15; and

- establishing a £1.2 million Community Food Fund (which will operate from 2012-15) to promote food tourism, farmers markets, food festivals and other local food events.

44. In the last year, four communities have successfully purchased land under the Land Reform (Scotland) Act, bringing the number of successful purchases to 16 since 2005 (of which 10 have occurred since 2007). In June 2013 the First Minister announced a target of doubling, to a million acres, the area of land to be under local control by 2020, as well as a further £3 million towards the Scottish Land Fund for the year 2015-16, which will bring the Fund to £9 million over the years 2012-16.

45. Over the next year, the Scottish Government will:

- improve LEADER support to communities through a more coherent approach to Local Development Strategy (LDS) development and delivery, with the potential to combine the use of Rural LEADER with other European funding sources such as European Maritime and Fisheries Fund (EMFF), European Social Fund (ESF) or European Regional Development Fund (ERDF);

- continue to make the case that with the powers of independence, Scottish control of the Crown Estate will benefit local communities and Scotland as a whole;

- ensure the Climate Challenge Fund continues to support communities to develop and implement their own projects for reducing emissions - a total of £68.6 million will be made available by 2015. The Climate Challenge Fund has been refreshed to help applications from disadvantaged communities and young people, and include projects which have a revenue-raising aspect. Since 2008, £48.3 million has been awarded to 578 projects across 421 communities, supporting community groups to reduce the carbon footprint of their community through community building efficiency improvements, sustainable/active travel, provision of energy efficiency advice, and community grow-your-own projects;

- respond to the Land Reform Review which is due to report in April 2014, with early findings on urban right to buy and adjustment to existing rural right to buy provisions being brought forward within the Community Empowerment and Renewal Bill;

- start the Review of the Agricultural Holdings legislation within 18 months of the Agricultural Holdings (Amendment) Act coming into force on 12 September 2012;

- support development of the Rural Parliament: it will be for communities themselves to decide on the role and remit of this, with the aim that it will enable communities in rural areas to have a stronger voice and shape local and national policy; and

- take forward the 'Think Local' programme of work to develop the local food agenda in Scotland: £1 million will be spent in the next 3 years on building support for food producers and suppliers who promote Scottish produce.

Securing Scotland's Natural Environment

46. Scotland's natural environment is a key asset, offering abundant resources, attractive places to live, work and spend leisure time, as well as providing a significant, positive contribution to our sense of well-being and the quality of our lives. A number of actions have been taken over the last year to secure Scotland's natural environment:

- continued implementation of the better environmental regulation programme through the introduction of the Regulatory Reform Bill, which provides a more risk-based and proportionate approach to environmental regulation and enforcement in Scotland;

- publication of Low Carbon Scotland: The report of policies and proposals, which shows how Scotland will meet its world-leading emissions reduction targets out to 2027. Scotland's emissions of greenhouse gases continue to decline faster than the EU15 average;

- publication of the 2020 Challenge for Scotland's Biodiversity, which aims to connect people to the natural world and involve them in decisions about their environment. This includes encouraging communities to manage and improve their local environment;

- establishment of two Land Use Strategy pilot projects in Aberdeenshire and the Scottish Borders, aiming to help guide future decisions about how land resources are used. The projects are being led by the respective Councils who will work closely with local stakeholders to see how a wider perspective on land use can benefit the local economy, environment and society;

- in late 2012, Chalara die-back in ash trees highlighted tree health concerns. This is one of a number of tree health threats which have the potential to cause serious economic and environmental damage to Scotland's woodland resource. The Scottish Government has established a Scottish Tree Health Advisory Group to develop action plans to deal with these threats;

- securing better integration of forestry with other land uses through the Woodland Expansion Advisory Group (WEAG). All 24 recommendations of the WEAG's report - including the commitment to create 100,000 hectares of new woodland over the next 10 years - were accepted. Forestry Commission Scotland is developing best practice guidance on the purchase of farm land for woodland creation and is working with stakeholders to review responses to the consultation on guidance about tree planting on agricultural land; and

- the Aquaculture and Fisheries (Scotland) Act received Royal Assent in June 2013 and aims to ensure that farmed and wild fisheries continue to be managed effectively, maximising their combined contribution to supporting sustainable economic growth with due regard to the wider marine environment.

Climate Challenge Fund Case Study: Shettleston Community Growing Project

The Shettleston Community Growing Project (SCGP) in Glasgow has received Climate Challenge Fund (CCF) grants to provide a resident-led initiative to grow food locally and improve diets, while raising awareness of issues around reducing food miles and food waste, recycling and energy consumption.

In the period 2010-11, an award of £172,769 was provided to the group for the transformation of 2,071 square metres of derelict land into 52 individual growing spaces and seven greenhouses. Staff delivered workshops on composting, healthy eating, cookery, recycling and energy efficiency in the home. A food miles information pack was developed in partnership with local schools. A further CCF award of £80,440 was provided in the 2011-12 period for the roll-out of the project to the wider Shettleston and East End community. As well as developing further satellite sites for food growing and a gardening tool re-use scheme, the new funding allowed it to reach out to local organisations and the business community, encouraging carbon reduction through activities and events aimed at decreasing the extent of car use and the promotion of eco-driving.

The benefits of this community growing space allowed the community to come together to grow, prepare, cook and consume their own food, as well as learning how to improve their diets and learn new skills. The growing spaces also enabled the community to experience the mental and physical health benefits of gardening.

As a legacy, locals now have access to a community growing space, community cohesion and better diets. Carbon emissions have decreased as food is grown and consumed locally, while the community has learned to compost, thus reducing waste. The tool recycling scheme has also reduced new products being purchased and decreased car use. The experience gathered through these projects has also led the group to develop a further CCF project focused specifically on community energy efficiency, for which £190,098 was awarded.

47. Over the next year, the Scottish Government will:

- take decisive action to reduce the number of carrier bags in circulation, to promote reuse and help reduce litter by introducing charging for bags from October 2014, with retailers donating the proceeds to good causes;

- finalise Scotland's Climate Change Adaptation Programme, setting out how we can respond to the threats and opportunities posed by the changing climate;

- work with local government, businesses and industry to examine the feasibility of a national deposit-return scheme to reduce the littering blight on Scotland's landscape and accelerate Scotland's progress towards becoming a zero waste nation;

- participate in the EU Review of the Plant Health regime to ensure it is strengthened to manage the increasing risks of pests and diseases to crops, forestry, gardens and wild plants;

- continue to support the Land Use Strategy pilot projects as they develop, and fully evaluate both pilots in order to inform future decisions about how we manage our land resources in Scotland; and

- use the recently enacted Aquaculture and Fisheries (Scotland) Act 2013 to further support the sustainable development of aquaculture and recreational fisheries in remote and rural areas.

Sustaining and Growing Scotland's Rural Economy

48. Scotland's natural resources and its rural areas are characteristics that distinguish Scotland, and are home to our rural industries, which are essential to the fabric of Scotland's rural communities. Various actions over the last year have focused on ensuring the continued viability and growth of these industries:

- following the severe winter weather of 2012-13, the Scottish Government provided £6.25 million in support for farmers to assist recovery and dispose of fallen stock, and provided a further £200,000 for honey producers;

- by 31 December 2012, 94.2 per cent of farm businesses received Single Farm Payments. To date there has been £444.37 million provided to 99.46 per cent of claimants;

- to help support new entrants to farming and others who have been excluded under the Single Farm Payment Scheme, the Scottish Government set aside £2 million of funding;

- an audit of horse passport controls was implemented by the Scottish Government in the wake of the horsemeat problems, and a guidance document was launched for horse owners. New legislation has been implemented to protect the welfare of animals at the time of killing or slaughter;

- the Scottish Government's Crofting Amendment Bill was passed by the Scottish Parliament. Once enacted, this will ensure that owner-occupier crofters are treated fairly, and like tenant crofters will also be able to apply to the Crofting Commission to de-croft their land;

- there has been political agreement on the main Common Agricultural Policy (CAP) and Common Fisheries Policy (CFP) regulations. The Scottish Government has ensured that key Scottish priorities, such as support under CAP for new entrants to farming and environmental measures, and a ban on discards under CFP, are addressed;

- in 2012, the Rural Priorities Scheme supported 1,283 businesses, awarding 1,489 contracts to the value of £84.2 million - including support for agri-environment, business development, forestry, designated sites and community projects;

- we have provided support to Scotland Food and Drink through a range of initiatives which has helped the industry deliver increased retail sales of Scottish food and drink brands in GB, which were up 32 per cent compared to 2007, with total exports of £5.4 billion in 2012, up 50 per cent from 2007;

- as of June 2013, the Food Processing Cooperation and Marketing Grant Scheme has awarded grants to 175 projects worth up to £47 million, supporting investment of £163 million, aiming to safeguard or create 9,000 jobs; and

- £10 million has been invested through the European Fisheries Fund to support the fisheries, aquaculture and fish processing sectors to create and safeguard jobs in remote rural areas, and to develop and sustain markets for Scottish seafood and aquaculture products.

49. Over the next year, the Scottish Government will:

- continue to exercise its influence to secure the best outcome possible from EU funding schemes for the benefit of sectors important to Scotland's rural economy;

- consult and work with stakeholders including farming and rural communities, farming organisations, and environmental groups to develop the main options for future CAP support (2014-2020) in Scotland, making recommendations for Ministerial decision in 2014;

- consult coastal communities and others on Scotland's Draft National Marine Plan, which sets out a national framework for the sustainable growth of marine industries;

- implement the reformed Common Fisheries Policy (CFP) to maximise the development of, and benefits from, sea fisheries, aquaculture, fishery processing and community-led local development;

- on sea fisheries specifically, implement the reformed CFP in a way which brings decision-making closer to home through regional fisheries management, and which supports a transition to discard-free fishing while also protecting the long-term viability of the Scottish fishing fleet - thus helping to achieve long-term sustainability for Scotland's fish stocks, fishing industry and fisheries-dependent communities;

- complete negotiations on the European Maritime and Fisheries Fund Regulation to maximise the benefits to Scotland, developing the Operational Programme for the Fund, and implementing it in 2014;

- continue to support the 2014 Food and Drink Action Plan to help industry promote Scotland as a 'Land of Food and Drink' in the run-up to and during the major events taking place in 2014; and

- bring forward proposals for legislation to allow the control of TB in non-bovine livestock.

Justice

50. Scottish Ministers' vision is of a justice system that contributes positively to a fairer Scotland, by helping to create an inclusive and respectful society in which people and communities live in safety and security, where people's rights are supported, and where disputes are resolved fairly and swiftly.

51. In order to make a tangible difference to the lives of the people of Scotland, the Scottish Government is taking action to: reduce crime and the fear of crime; place the needs of victims and witnesses at the heart of reforms to Scotland's justice system; provide positive opportunities for young people; and empower individuals and communities.

52. By looking harder and more systematically at the evidence than ever before and responding to what it shows is most effective, the Scottish Government has identified clear priorities for action. These both tackle crime and address the underlying causes of crime, such as alcohol and drug abuse.

53. The Scottish Government has developed new, innovative, internationally recognised approaches, for example in tackling serious organised crime and educating young people away from offending. The whole system approach to youth justice aims to ensure co-ordinated support for those young people most at risk of offending.

54. At the same time Scottish Ministers have been ambitious in delivering radical reforms to Scotland's justice services, for example by embarking on the reform of police and fire services, and in helping to protect frontline services from the impact of financial cuts. Scottish Ministers will continue to deliver important reforms to Scotland's justice system to help make Scotland safer, for example by bringing forward statutory provisions to end the system of automatic early release for certain offenders such as dangerous offenders sentenced to 10 years or more in prison and sexual offenders sentenced to 4 years or more in prison.

Record

55. The Scottish Government's preventative approach to justice is working. Since 2006-07:

- recorded crime has fallen by 35 per cent, to its lowest level for 39 years;

- violent crime has fallen by 47 per cent, to a 38-year low;

- handling of offensive weapon ('knife crime') offences have fallen by 60 per cent and are at their lowest level since 1986;

- firearms offences have fallen by almost 60 per cent to the lowest level for 34 years;

- re-conviction rates have fallen and are now at their lowest point in over a decade;

- the annual number of victims of crime has fallen by over 125,000;

- the annual number of homicide victims has fallen by a quarter;

- the clear-up rate for all recorded crimes has increased from 47 per cent to 51 per cent, the highest rate since 1976; and

- the number of children and young people referred to the Children's Hearings system on offence grounds has fallen by 66 per cent.

Achievements Over the Last Year

56. Over the past year the Scottish Government has made significant progress in delivering Ministers' distinctive vision for a safer and stronger Scotland:

- on 1 April 2013, the Police Service of Scotland and the Scottish Fire and Rescue Service were established to serve local communities and meet the challenges of crime and public safety in the 21st century;

- despite UK Government spending reductions, police officer numbers in Scotland have been maintained at more than 1,000 higher than in 2007, whereas the number of police officers in England & Wales has fallen to its lowest level for 11 years; and Scotland's crime clear-up rate is the highest for 35 years;

- Scottish Ministers have rejected the Winsor review recommendations on policy pay and conditions proposed in England and Wales, and have introduced legislation to establish a separate Police Negotiating Board for Scotland;

- the Scottish Civil Justice Council and Criminal Legal Assistance Act received Royal Assent, delivering a key step towards modernising Scotland's civil justice system, and ensuring that those who are able to contribute towards the costs of their criminal legal assistance do so;

- the Victims and Witnesses Bill was introduced to Parliament to improve support and information for the victims and witnesses of crime, including requirements for justice organisations to publish standards of service and to make offenders contribute towards the costs of meeting victims' needs;

- the Criminal Justice Bill was introduced to Parliament to modernise and improve the system for investigating and prosecuting crime in Scotland;

- the Tribunals Bill was introduced to establish a less complex and more user-friendly structure for Scotland's tribunals, which will provide simpler and more effective ways of resolving disputes for the user;

- action has been taken to end the anomaly under which Scottish courts do not have access to key data held by the Department for Work and Pensions which can help enforce the collection of fines and other financial penalties;

- £7.7 million has been allocated over 2 years from the Reducing Re-offending Change Fund to provide targeted one-to-one mentoring schemes to tackle persistent re-offending;

- £3 million has been invested in local initiatives to tackle sectarianism across communities in Scotland;

- faster access to drug treatment is now ensured for those who need it, with 94.2 per cent of people starting specialist drug treatment within 3 weeks of their referral - exceeding the 90 per cent target at national level for March 2013;

- record investment in frontline drug services has been sustained - a 20 per cent increase since 2006 with £30.3 million invested in 2013-14 for drug services and support; and

- there has been continuing capital investment in Scotland's justice estate, including maintaining a modern and fit-for-purpose prison estate; construction of the Scottish Crime Campus; and refurbishment of the historic Parliament House court complex.

- Priorities for the Year Ahead

57. The actions which the Scottish Government takes over the year ahead will aim to further empower communities, continue the vital reform and modernisation of Scotland's justice system, and take the action necessary both to protect public safety and encourage people away from offending:

- the Scottish Government will bring forward statutory provisions to end the system of automatic early release for certain dangerous offenders. Once these legislative reforms are brought into force, certain dangerous offenders sentenced after the legislation is in operation who receive 10 years or more in prison (4 years or more for sexual offenders) will no longer receive automatic early release. Instead such prisoners will only be assessed for early release on the basis that a prisoner's risk to public safety is the determining factor for consideration for early release. The legislative reforms will be brought forward as part of Stage 2 of the Criminal Justice (Scotland) Bill, which was introduced into Parliament in June 2013;

- Scottish Ministers will work with the Scottish Prison Service (SPS) and other partners, including third sector organisations, to help provide even more effective and flexible support and activity within prisons and in the community, to encourage offenders away from re-offending and towards rehabilitation;

- the Scottish Government will continue to work with criminal justice stakeholders to respond to the recommendations of the Commission on Women Offenders, to address the issues that impact on women in prison and in the community;

- Scottish Ministers will continue to ensure that robust and effective alternatives to the use of short-term prison sentences are available;

- following a wide-ranging consultation during 2013, the Scottish Government will bring forward proposals to modernise and strengthen the management and delivery of vital community justice services, ensuring more effective collaboration between agencies and a clear focus on prevention and reducing re-offending;

- Scottish Ministers will not follow the path being taken by the UK Government to hand responsibility for monitoring categories of offenders to the private sector;

- the Scottish Government will continue to work with Police Scotland, the Scottish Police Authority and Scottish Fire and Rescue Service, in line with their published strategic priorities, to ensure that the benefits of police and fire reform are delivering at both the national level and for local communities;

- investment will continue to maintain police officer numbers and the provision of appropriate support for the frontline justice workforce;

- the Courts Reform Bill will be introduced to: modernise and improve the efficiency of Scotland's courts, ensuring that cases are dealt with more swiftly in the right level of court; provide for simplified procedures that are easier for people to understand; and make improvements to arrangements for judicial reviews;

- the Making Justice Work programme initiatives (such as the Court Door List project and northern video link network) will be built on to enhance the use of technology to: improve access to and management of information; reduce costs; and increase access to justice;

- action will continue to ensure that the needs of victims and witnesses are met and that cases are resolved as efficiently as possible;

- the Damages Bill will modernise and simplify key aspects of damages and personal injury legislation, including how eligibility to claim damages is determined and the timescales within which claims can be made;

- the Scottish Government will progress work towards introducing a lower drink driving limit in Scotland which will help make Scotland's roads safer and help save lives;

- the Licensing Bill will create an effective licensing regime for air weapons to protect public safety and give local communities greater influence over aspects of alcohol and civic government licensing in order to preserve public order and safety, reduce crime, and promote public health;

- as well as continuing to support the whole system approach for young people at risk, the Scottish Government will work to ensure that mainstream services, such as education and health, support young people to make positive choices and to avoid the criminal justice system; and

- the Scottish Government will continue to invest in the justice estate, including ensuring a modern and fit-for-purpose prison estate; completing construction of HMP Grampian and progressing work to modernise facilities for women within the prison estate.

Courts Reform Bill

The Courts Reform Bill will provide the legal framework for implementing many of the recommendations of the Scottish Civil Courts Review which was led by Lord Gill, now the Lord President. The recommendations will ensure that the courts system is fit for the 21st century; will make it more efficient, flexible and responsive to change; and will ensure that it deals proportionately with cases, ensuring they are heard at the appropriate level in the system.

Among other measures, the Bill will:

- give the Court of Session the status it deserves as a senior civil court;

- significantly increase the role of the Sheriff Courts;

- create a new Sheriff Appeal Court;

- create a new Personal Injury Court; and

- introduce new summary sheriffs, able to deal with summary criminal cases and many civil actions including family actions.

The reforms are part of the Scottish Government's Making Justice Work Programme and contribute towards widening access to justice, advancing law reform, and transforming civil and administrative justice. This will be achieved by providing a clearer, proper hierarchy of courts and judicial roles so that users better understand how the system works and ensuring that cases are heard in the right courts, so that users experience fewer delays, reduced costs, earlier resolutions and require less time in court.

Damages Bill

The Damages Bill will consolidate key aspects of the law relating to damages for personal injury as recommended by the Scottish Law Commission to ensure justice is delivered efficiently and effectively for those harmed as a result of another's negligence.

The Damages Bill will include provision to:

- extend the limitation period which applies to actions for personal injury;

- set out a non-exhaustive list of factors for the court to consider when asked to exercise its discretion to allow a case to proceed outwith that limitation period; and

- enable courts to impose at the conclusion of a case a periodical payment order instead of a lump sum award of damages, without the consent of the parties.

Licensing Bill

The Licensing Bill will improve aspects of locally-led alcohol and civic government licensing in order to preserve public order and safety, reduce crime, and to advance public health. It will give local communities the power to regulate sexual entertainment venues in their areas and will protect public safety by creating a new licensing regime for air weapons. It will give authorities additional powers to help tackle metal theft, reducing the disruption and financial costs this crime causes to infrastructure, businesses and public services. The Bill will:

- introduce a licensing system for air weapons in Scotland which recognises the need to protect and reassure the public, but which is proportionate and practicable. The Bill will take steps to ensure that only people with a legitimate reason for owning and using an air weapon will have access to them in future;

- take forward the commitment made in the 2011 Manifesto to make it an offence to supply alcohol to under-18s in a public place as well as a range of recommendations made by stakeholders to clarify and improve the operation of the current licensing legislation, to ensure effective regulatory processes and to reduce unnecessary burdens on business;

- make changes to taxi and private hire car licensing to protect the public and legitimate trade, improve the licensing of scrap metal dealers to ensure greater regulation of the industry and ultimately reduce metal theft, as well as a range of amendments to improve the various civic licensing regimes; and to ensure effective regulatory processes and to reduce unnecessary burdens on business; and

- subject to the outcome of ongoing consultation, create a new licensing scheme for sexual entertainment venues. The Scottish Government considers that it is appropriate that sexual entertainment venues should be licensed in order that the risk of criminality is reduced and both performers and customers benefit from a safe, regulated environment. Central to this proposal is the belief that local communities should be able to exercise appropriate control and regulate sexual entertainment venues that operate within their areas.

Health

58. The 2020 Vision for Health and Social Care, agreed by the Scottish Government with its stakeholders in 2011, sets out an ambitious vision for the future of healthcare in Scotland which puts people at the very heart of the system:

"The Scottish National Health Service will be a publicly funded and publicly delivered health care service free to all our citizens. We will have a world-leading healthcare service where everyone is able to live longer and healthier lives at home, or in a homely setting. We will have a focus on reducing health inequalities, on prevention, anticipation and supported self-management. When hospital treatment is required, care will be provided to the highest standards of quality and safety, with the person at the centre of all decisions. There will be a focus on ensuring that people get back into their home or community environment as soon as appropriate, with minimal risk of re-admission."

59. In pursuing this vision, Ministers are determined that the Scottish Government and its partners must collectively recognise and respond to the most immediate and significant challenges we face. These include Scotland's public health record and level of inequalities; its ageing population; increasing expectations arising from new drugs, treatments and technologies; and the specific impact of inflation on the health service.

60. In recent spending reviews Ministers have committed to protecting patient-facing health spending by ensuring a real terms resource increase, recognising the very specific inflationary and service pressures facing the delivery of health and care services. Efficiency savings identified by territorial health boards amounting to over £1 billion in the last 4 years have been retained by them and used to further enhance local services.

61. Scottish Ministers have categorically ruled out the disruptive type of reforms and upheaval being put in place in NHS England, and are committed to continuing to provide high quality health and social care to the people of Scotland that reflects the true values of the people delivering health and social care services in Scotland.

62. The internationally recognised successes Scotland's health services have achieved have been earned through working in partnership across the Scottish Government, the wider public sector and with staff. Looking ahead, Scotland's approach remains one of integration, collaboration, innovation, and a focus on outcomes.

Health and Care Service Quality Improvement

63. The focus on improving quality in Scotland's health and care services through the implementation of the Quality Strategy has continued to achieve results over the past year:

- Scotland's acute hospitals have reduced Hospital Standardised Mortality Ratios by 11.8 per cent between October-December 2007 and October-December 2012, and reduced surgical mortality by 28 per cent;

- Clostridium difficile cases are at their lowest level since mandatory surveillance began[1];

- the Scottish Government has introduced a legal treatment time guarantee from 1 October 2012, which means that once a patient is diagnosed as requiring inpatient and day case treatment they will receive this within 12 weeks from agreeing to the treatment;

- NHSScotland also continues to deliver the 18 weeks referral to treatment time target, with 90.6 per cent of patients being seen and treated within the 18 weeks target in March 2013;

- Scotland now has the highest rate of dementia diagnosis in the UK (65 per cent in Scotland compared to 42 per cent in England);

- national results from the 2012 Inpatient Experience Survey show that 85 per cent of inpatients in Scotland's hospitals rate their care and treatment as excellent or good, with 89 per cent of patients reporting that care provided by their GP surgery was excellent or good;

- the Public Bodies (Joint Working) (Scotland) Bill on integrating health and social care services was introduced to Parliament - integrating health and social care will improve the continuity and quality of care for people who use services and make better use of the substantial resources which are committed across health and social care;

- the Scottish Government launched Quality Improvement Collaboratives for Early Years, Person-Centred Care and for Maternity Care; and

- the NHS Boards' 3 per cent efficiency target of £264.1 million was exceeded by £5.8 million.

64. During the year 2013-14, the Scottish Government and its partners will work to:

- identify particular areas for accelerated improvement and enhanced roles in unscheduled and emergency care, and in primary care in services for people living with multi morbidities, providing a whole system response to improve the patient pathway in order to reduce pressure on Accident & Emergency (A&E) departments;

- develop their strategy for engaging and empowering their workforce, providing a response in Scotland to addressing many of the issues raised by the Mid-Staffordshire/Francis Inquiry, and equipping them to work in an integrated way which reflects the different needs of different people and different places across Scotland;

- implement the more Scottish GP contract with benefits fully explored and realised;

- further increase safety in Scottish Hospitals, as measured by Hospital Standardised Mortality Ratios and Healthcare Associated Infection rates, through a range of actions including the implementation of the maternity, mental health and primary care safety programmes;

- develop out of hospital care as part of the National Unscheduled Care Action Plan;

- achieve a sustainable performance on 4-hour A&E waits by the end of December 2013;

- implement the Person-Centred Health and Care Collaborative, with measureable improvements locally in experience for patients, their carers and for staff;

- introduce a new fund to provide pump-priming for innovative approaches in healthcare, resulting in more small- and medium-sized Scottish companies working with NHSScotland to develop and test solutions which improve the quality of care and contribute to Scottish economic growth; and

- introduce a Mental Health and Adults with Incapacity Amendment Bill, to improve the operation and efficiency of the mental health and adults with incapacity legislation for service users and practitioners alike.

Mental Health and Adults with Incapacity Amendment Bill

The Mental Health and Adults with Incapacity Amendment Bill will improve the operation and efficiency of mental health legislation for service users and practitioners alike.

The Bill will implement recommendations from the McManus Review Group, set up by the Minister for Public Health, to carry out a review of specific aspects of the Mental Health (Care & Treatment) (Scotland) Act 2003.

The Bill will also introduce new powers in relation to a Mental Disordered Offenders (MDO) Victims Notification Regime (similar to the current criminal justice Victims Notification Scheme for victims of crimes) and will amend the Adults with Incapacity (Scotland) Act 2000 to remove the requirement for a single statutory ethics committee to consider all research-related applications involving incapacitated adults.

Prevention

65. The Scottish Government and NHSScotland remain committed to preventative approaches, and over the past year have:

- introduced a national target for Detect Cancer Early from April 2012, to increase the proportion of people diagnosed and treated in the first stage of breast, colorectal and lung cancer by 25 per cent, by 2014-15;

- launched major campaigns to raise awareness of signs of breast and bowel cancer, resulting in positive early signs of increased awareness and activity;

- launched a new tobacco control strategy, setting a target to reduce smoking prevalence to 5 per cent by 2034; and

- implemented changes to regulations on tobacco display in larger shops, to reduce the rate of smoking amongst teenagers.

66. During the year ahead, the Scottish Government and its partners will work to:

- identify people as 'at risk' through more detailed analysis of existing data, and agree anticipatory care plans;

- implement the world's first national multiagency early years quality improvement programme across partner organisations to give Scotland's children the best start in life;

- achieve a measureable increase in early detection of cancer across Scotland, particularly in deprived areas, resulting in better outcomes; and

- introduce the Food Standards Scotland Bill to improve and protect the public health of communities in Scotland.

Food Standards Scotland Bill

The Food Standards Scotland Bill will improve and protect the public health of communities in Scotland by setting up Scotland's own food safety and standards body, Food Standards Scotland. Its primary concern will be consumer protection - making sure that food is safe to eat, making sure it is what it says it is, and improving diet and nutrition so that people in Scotland live longer, healthier lives.

The new body will take over functions presently delivered in Scotland by the UK-wide Food Standards Agency. However, Food Standards Scotland will be more responsive to Scottish circumstances and will have a wider remit. Scotland has particular health challenges and needs, so our food standards and food health regime needs to be focused on these.

67. Scottish Ministers regret the UK Government's decision not to proceed with legislation to introduce plain packaging for cigarettes and other tobacco products. The Scottish Government is determined to take forward this important public health measure, and will consult on the issue in the coming months, with the intention of introducing legislation in 2014-15.

68. The Scottish Government remains committed to introducing minimum pricing per unit of alcohol, in order to reduce the terrible impacts of over-consumption, with its disproportionate effects in Scotland's more deprived communities. Having successfully defended the legislation in the Outer House of the Court of Session, the Scottish Government will continue to defend minimum pricing per unit of alcohol against any subsequent appeals.

Commonwealth Games and Sport

69. The Scottish Government continues to be committed to increasing physical activity and participation levels in sport, recognising that this has the potential to significantly transform lives in every community. It also benefits Scotland's economy, cultural heritage, and international standing: latest full-year data show that direct sports-related consumer spending amounts to close to £1 billion a year and accounts for over 33,000 jobs.

70. The 2014 Glasgow Commonwealth Games and the Ryder Cup to be held at Gleneagles in 2014 provide an excellent opportunity to promote sport and physical activity in Scotland. In recognition of the significant contribution this can make towards public health and reducing long-term pressure on NHS resources, a Physical Activity Implementation Plan will be developed to explore ways to increase overall activity levels, through policies ranging from sustainable transport to increasing visits to the outdoors. This work will be complemented by a National Walking Strategy due for publication in Spring 2014, reflecting the important part walking can play in encouraging people to be active.

71. In addition to developing the sports infrastructure for the Commonwealth Games, the Scottish Government has invested over £43.2 million through sportscotland to provide direct support for projects across Scotland. This has delivered 14 new and upgraded swimming pools, and 25 football pitches including 22 new 3G all-weather pitches. A new multi-sport £25 million National Performance Centre for Sport will be established by 2016, providing top athletes with the facilities, programmes and support that will help them build on their international reputation.

Commonwealth Games Legacy

The Scottish Government and its wide range of partners continue to build on the excellent foundations in place to deliver a lasting legacy for the people of Scotland as a result of hosting the Commonwealth Games. Good progress is being made across the four themes of the legacy plan - A Flourishing Scotland, An Active Scotland, A Connected Scotland and A Sustainable Scotland.

Individuals, businesses and communities are already benefiting from the many opportunities provided through the staging of the Games and the legacy programmes inspired by the Games. A number of key legacy programmes were launched in 2012 and 2013 to help drive forward the Scottish Government's legacy ambitions for a more active nation and to support Scotland's young people. These include the £10 million Legacy 2014 Active Places Fund; the Game On Scotland education programme; the Legacy 2014 Scotland's Best and Employer Recruitment Incentive programmes; and plans for Street Soccer.

In October 2012, the Scottish Government launched the Legacy 2014 brand to tell the legacy story so far, with an overarching message of getting involved, and being part of the Commonwealth Games. Legacy lead officers have been identified across all 32 local authorities and, with the support of the new Local Authority Legacy Manager based within the Scottish Government, are working hard to help maximise opportunities for communities throughout Scotland.

An Evaluation of the Legacy for Scotland from the Glasgow 2014 Commonwealth Games: Report 1 was published in October 2012, setting out the broad approach to legacy evaluation. The next will be the pre-Games report in Spring 2014. This is complemented by a new web area, 'Assessing Legacy 2014', which tracks over 50 outcome indicators across the four legacy themes and will present monitoring data across legacy programmes.

72. A number of lessons were learnt from the London 2012 Olympics. In particular, these informed a Ministerial decision in December 2012 to ask the Chief Constable of Police Scotland to take on oversight of all aspects of delivering a safe, secure and peaceful Commonwealth Games, including responsibility for a new £90 million security budget. A dedicated Police Scotland Commonwealth Games delivery team has been established and is drawing on the benefits and opportunities generated by the creation of a single police force.

73. The majority of the legislation required for the Commonwealth Games is now in place, with additional secondary legislation due to be introduced to Parliament in Autumn 2013. This will include the regulation of advertising and street trading in the vicinity of Games locations.

74. There is ongoing scrutiny of the planning for the Games from the Commonwealth Games Federation and Audit Scotland. The Scottish Government continues to work with these scrutiny bodies up to, and beyond, the Games. The Commonwealth Games continue to be on time and on budget, as evidenced by these bodies.

International Development and Climate Justice Fund

75. The Scottish Government's International Development Policy articulates its vision of Scotland's place in the world as a good global citizen, committed to playing its role in addressing global challenges.

76. This is achieved through:

- the £9 million per annum International Development Fund, which is focused on the key objectives of poverty alleviation and the achievement of the Millennium Development Goals in seven countries: Malawi; Rwanda; Tanzania; Zambia; Pakistan; Bangladesh; and the three poorest states in India, with funding provided directly to Scottish-based organisations to work with their local partners on the ground;

- funding to the Network of International Development Organisations in Scotland (NIDOS) and the Scotland-Malawi Partnership (SMP); to empower and build capacity in Scottish-based organisations, and provide a focal point for information exchange and the promotion of best practice in development; and

- the innovative Climate Justice Fund, a world-first, which seeks to tackle inequalities to redress the injustice of the impacts of climate change in vulnerable communities who have done the least to cause the problem, and to empower those communities to take preventative measures.

Scotland's Climate Justice Fund

In November 2012, the Minister for Environment & Climate Change announced the first recipients of Scotland's Climate Justice Fund, supporting projects in Malawi and Zambia to increase local communities' resilience to the impacts of climate change. The Scottish Government is providing £3 million for the fund over the next 3 years, focused on helping people in Sub Saharan Africa cope with the effects of climate change.

Scotland's leading role and ground-breaking work on climate justice, led by the First Minister, has attracted international interest and ties very closely to Scotland's commitments on climate change. This work has been widely welcomed, from UN Secretary General Ban Ki Moon and former UN High Commissioner Mary Robinson to Archbishop Desmond Tutu, and heralded by the international development community and civic society in Scotland. In addition, Scotland's world-leading climate change emissions reduction targets encourage other nations to share Scotland's ambition to tackle climate change.

77. Over the past year, Scotland achieved Fairtrade Nation status in February 2013, becoming just the second country in the world to do so. The Scottish Fairtrade Forum, with funding support from the Scottish Government, has been instrumental in driving forward Scotland's Fair Trade Nation campaign across Scotland.

78. In addition, through the International Development Fund, the Scottish Government:

- announced the first awards under the 2013-16 Malawi Funding Round during a successful visit to Scotland by President Banda for the David Livingstone Bicentenary celebrations: 15 projects in the areas of health and sustainable economic development received a total value of £4,919,927. In July 2013, grants totalling £3,190,865 in the areas of health, education and sustainable economic development were awarded;

- announced funding for four 'away' projects worth a total of £2.5 million in Sub Saharan Africa under its partnership with Sport Relief. This will help to secure an international legacy from the 2014 Commonwealth Games, along with match-funded 'home' projects in Scotland;

- announced funding under the South Asia 2013-16 funding round, with a total value of £4,059,169 for a range of projects in the areas of health, education, food security, and addressing climate change; and

- continues to support communities to access clean water; increase food security and tackle the adverse effects of climate change through the 2012-15 Sub Saharan Africa funding round.

The Year Ahead

79. Scotland will host an International Conference on Climate Justice in Edinburgh in October 2013, bringing together international businesses and civic society to collaborate on climate justice. First Minister Alex Salmond and Mary Robinson will highlight the opportunities and challenges for businesses ahead of climate talks in Warsaw in November, helping to drive ambition for an equitable global climate agreement in 2015.

80. The Scottish Government's new Small Grants Scheme will award £500,000 per year in 2014-15 and 2015-16, to build the capacity and number of small Scottish international development organisations able to engage in international development work.

81. Work will continue on developing policy to support key principles including: more and better aid; continuing to champion Climate Justice; to 'Do No Harm' by not undermining the Scottish Government's international development aims, and ideally contributing to international development success through support for policy coherence across Government; and putting gender equality at the heart of development work. Support will continue for deep civil society links with target countries, by working with them to meet their needs, through supporting trade and investment and skills exchange.

Culture and Heritage

82. The Scottish Government believes that culture and heritage are fundamental to our quality of life. They are central to shaping our sense of place and making our communities attractive places to live, work, invest and visit. Culture and heritage are powerful forces for renewal and regeneration. They underpin our journey towards better health, individual well-being, strong communities and enriched lives.

83. This Government believes that it is the very measure of the health of this democracy to welcome and embrace the fundamental public good that is generated through cultural engagement and participation and through a better understanding of our heritage.

84. This Government wants as many communities as possible to experience and benefit from culture and heritage. We have sought to prioritise budgets for delivery of culture, arts and heritage, wherever possible, to minimise the impact of UK Government imposed spending cuts.

85. We and our delivery partners are investing in a wealth of opportunities to participate and benefit from a programme of cultural activity taking place in 2014 as part of the celebrations for the XXth Commonwealth Games (including the Queen's Baton Relay as it travels across Scotland in the run-up to the Games in Glasgow), Homecoming and the Ryder Cup. We have also announced a programme of events to commemorate the First World War. These will all offer opportunities to connect, to learn and to understand our place in the world.

86. 2014 is the 700th anniversary of the Battle of Bannockburn. The Scottish Government, through Historic Scotland, is working in partnership with the National Trust for Scotland to create a world-class visitor attraction for the site, including a new Battle of Bannockburn Visitor Centre. This will use state of the art installations to interpret and explain the circumstances that led up to this pivotal event in our history and its consequences. The Scottish Government has committed £5 million through Historic Scotland, and £4.1 million has been awarded by the Heritage Lottery Fund. The monuments of the site are also being restored. The project is scheduled for completion on time and on budget.

87. We are already seeing the benefits of Scottish Government cross-portfolio funding for programmes such as Sistema Scotland, as they establish a second orchestra in Govanhill and go from strength to strength in Raploch. We will look in the coming year to support further initiatives to strengthen the resilience and well-being of communities through a forward-looking preventative approach, in order to achieve social regeneration through culture whilst widening access and participation to cultural and creative activity.

Chapter 7: Mitigating the Impacts of Austerity on People in Scotland

1. Scottish Ministers believe that the UK Government has cut public spending too far and too fast, damaging the recovery of the economy and creating hardship for vulnerable groups.

2. The UK Government's current welfare reforms are a case in point. The Scottish Government is deeply concerned about the range of changes and cuts to the welfare system being introduced by the UK Government, and the impact this will have upon people and services across Scotland.

3. The Scottish Government is taking action to reduce the impact of the UK Government's austerity programme both on the Scottish economy and on vulnerable groups. It is following through on its commitment to a Social Wage, providing direct support to households across Scotland through measures such as the Council Tax freeze, free personal care for the elderly, and free tuition fees. The Scottish Government is also focused on creating opportunities for Scotland's young people and helping them back into work, in collaboration with partners across the public, private and third sectors.

4. However, Scottish Ministers' ability to act is restricted by the limited powers under the current constitutional arrangements and as such, it is not possible to fully mitigate the impacts of the UK Government's austerity programme on people in Scotland.

5. Control over the welfare system would enable Scottish Ministers to devise policies to best benefit the people of Scotland and develop a system that will encourage those who can and should work into work, but also support people who are unable to work, allowing them to play a full and active part in society, and help to tackle poverty where it exists.

Welfare Reform Mitigation

6. The UK Welfare Reform Act 2012 included provisions to abolish Council Tax Benefit, abolish the discretionary elements of the Social Fund, merge a number of in-work and out-of-work benefits into a new Universal Credit, reduce benefit payments for social sector tenants deemed to have a 'spare' bedroom, and replace the Disability Living Allowance with a Personal Independence Payment. An overall cap on benefits has also been introduced and the amount by which certain benefits can, in future, be uprated, has been curtailed. Reductions to Housing Benefit, such as reduced caps for the Local Housing Allowance, were brought into force within existing legislation from 2011 onwards.

7. In addition, the UK Government is introducing a range of changes and cuts to the social security system with substantial impacts on people and services across the country. Scottish Government analysis estimates that the UK Government's welfare reforms could potentially cost people living in Scotland up to £4.5 billion in the 5 years to 2014-15, with children and families amongst those being hardest hit.[2] This finding is echoed by a report commissioned from researchers at Sheffield Hallam University by the Welfare Reform Committee of the Scottish Parliament.[3]

8. Scottish Ministers support the view that reform of welfare is needed, but do not agree with many aspects of the UK Government's programme. The Scottish Government wants a welfare system that is simpler, makes work pay, lifts people out of poverty, and reflects its values, in order to ensure fair and decent support for all. The approach being taken by the UK Government does not meet this aspiration.

9. The Scottish Government is working to mitigate the impact of welfare reform - as far as possible within the powers available under the current constitutional settlement - through working in partnership with local authorities and the third sector, amongst others. However, the impacts will go beyond what is possible for the Scottish Government to mitigate.

10. The Welfare Reform (Further Provision) (Scotland) Act 2012 placed a statutory requirement on the Scottish Ministers to report to the Scottish Parliament on the impact of welfare reform on people in Scotland. Ministers laid the initial report on 28 June 2013.[4]

Maintaining Eligibility to Passported Benefits

11. The Scottish Parliament passed secondary legislation under the Act, in April 2013, in order to safeguard access to Scottish Government funded passported benefits such as concessionary travel and free school meals, following the introduction of Personal Independence Payments (PIP) and the Universal Credit (UC).

12. This legislation introduced additional passporting criteria for disability-related passported benefits, to take account of the introduction of PIP, and implemented an interim solution to protect access to income-related passported benefits during the initial phased introduction of the UC. We will introduce further regulations in the coming year which will set new criteria for income-related passported benefits.

Scottish Welfare Fund

13. The UK Welfare Reform Act 2012 abolished the discretionary Social Fund. The Scottish Government has responded by developing a successor scheme.

14. The Scottish Government has worked in partnership with COSLA, local authorities and the third sector to deliver the new Scottish Welfare Fund. The new Fund, launched on 1 April 2013, is operated by local authorities based on national guidance and offers Community Care Grants and Crisis Grants, rather than loans as under the Social Fund.

15. The Fund has also been designed to support an early intervention approach and support other policies such as care in the community, tackling poverty - particularly child poverty - and reducing homelessness.

16. The Scottish Government has committed an extra £9.2 million, in 2013-14, to the Scottish Welfare Fund, on top of the funding transferred from the Department for Work and Pensions (DWP). This takes the total value of the Fund up to £38 million this year and enables the award of an additional 5,600 Community Care Grants, and an additional 100,000 Crisis Grants in 2013-14.

Scottish Welfare Fund Bill

The Scottish Welfare Fund Bill will set out in statute Ministers' intentions for this Fund to provide discretionary local welfare assistance to vulnerable members of the community.

The Bill will establish the Scottish Welfare Fund as a means of providing a safety net in an emergency or a disaster when there is an immediate threat to health and safety. It will also establish the Fund as a source of help for people on qualifying benefits to access household goods to set up home or to enable them to remain living in their community. This will include families facing exceptional pressures that lack the resources to meet irregular costs, and the Fund will assist them in providing a safe and secure environment for their children.

The Bill will make provision about how the Fund will be delivered, what the public reporting arrangements will be, and how applicants to the Fund might challenge decisions.

Council Tax Reduction Scheme

17. The UK Welfare Reform Act 2012 also abolished Council Tax Benefit from April 2013 with responsibility for assisting vulnerable people to meet their Council Tax liabilities transferring to Scottish Ministers. Entitlement to Council Tax Benefit reflected a variety of circumstances which include unemployment, disability, low pay, and inability to work because of disability or caring commitments. As part of the UK Government's reduction in welfare spending, the budget transfer to the Scottish Government for the operation of Council Tax Benefit successor arrangements includes a 10 per cent cut in funding against forecast expenditure levels, leaving a funding shortfall in 2013-14 estimated at £40 million.

18. The Scottish Government and COSLA are protecting those who previously received Council Tax Benefit from this funding cut in 2013-14. Working together, an additional £40 million was committed to fill the funding gap and delivered a Council Tax Reduction Scheme which replicates entitlement to Council Tax Benefit, as far as possible. This ensures that over half-a-million people who were previously receiving Council Tax Benefit will be protected from increased Council Tax bills for as long as their circumstances remain the same.

The Reform of Housing Benefit

19. Over the last 10 years, Housing Benefit growth has been dominated by London and the South-East, fuelled by growth in the private rented sector, and not by growth in Scotland. In real terms, over those ten years, Housing Benefit spend in Great Britain has increased by 53 per cent and 93 per cent of this increase is attributable to England, and 31 per cent to London alone. But the reforms are having a major impact in Scotland. Taken together, the changes to Housing Benefit, in the private and social sectors, directly remove over £100 million annually from some of the most vulnerable people in Scotland. Subsequent indirect effects will have significant additional impacts on Scotland's poorest communities. In terms of real people this means that 60,000 tenants in the private rented sector in Scotland have lost, on average, £40 per month because of the changes introduced in 2011. And 82,500 households - around 1 in 7 of all households in the social rented sector - are losing, on average, £11 per week as a result of the under-occupation penalty; 80 per cent of these households contain an adult with a disability.

20. Social security assistance is a reserved matter under the Scotland Act 1998, which specifically states that providing assistance in relation to individuals' housing costs is reserved. However, working closely with the Scottish housing community, the Scottish Government is taking all reasonable action on the impacts of welfare reform on housing. Within its existing powers, it is also introducing the Housing Bill to protect consumers, improve housing quality, and secure better outcomes for communities.

Housing Bill

The Housing Bill will take forward legislative change which will protect consumers, improve housing quality and secure better outcomes for communities. The Bill will give effect to a number of the measures set out in the Government's Strategy and 10-year Action Plan for housing Homes Fit for the 21st Century.

The Bill will include provisions to protect the existing stock of affordable homes by ending all right to buy entitlements for social housing tenants; create a new Housing Tribunal which will ensure effective and prompt resolution of disputes in the private rented sector; introduce a regulatory framework for Letting Agents to tackle those who do not meet industry standards of professionalism and conduct; increase flexibility for landlords in the allocation and management of social housing; modernise the licensing of mobile homes and park homes; and give local authorities further powers to improve the quality of houses in the private sector.

21. Scotland has one of the strongest homelessness safety nets in the world, achieving the historic 2012 homelessness commitment that, from December 2012, all of those assessed as unintentionally homeless by local authorities will be entitled to settled accommodation as a legal right. Protection from rent arrears eviction was strengthened in August 2012 (in regulations laid under the Housing Act 2010) through pre-action requirements to ensure eviction is always the last resort.

Public Sector Partnerships

22. As well as these direct impacts for Councils, there is likely to be increased demand for some local authority services as individuals and families face a change in circumstances and require additional support to cope with the changes to the UK benefit regime. The areas of service most likely to be impacted include information and advice, childcare, social work, employability services and housing support.

23. The Scottish Government and COSLA signed a Joint Statement on 21 November 2012 committing both to working together nationally and locally to mitigate, as far as possible, the impact of the UK Government's measures.

24. Together, the Scottish Government and COSLA have established a Corporate Partnership Group, drawing membership from SOLACE, ADSW, ALACHO, Directors of Finance and the health sector.[5] This brings a collective sense of leadership to the work that is underway, and ensures that identified risks are appropriately managed. It also ensures that any opportunities in relation to shared priorities around public service reform, alignment of services, and a person-centred approach to service planning and delivery, are exploited.

25. The changes to disability-and health-related benefits, in addition to changes to work-related benefits and support for housing costs, are likely to present both long-and short-term impacts on health and health services in Scotland. This will have implications for primary care, secondary care, public health and other healthcare services which may face increased demand for support from people affected by the reforms.

26. A Health Impact Delivery Group comprising representatives of the Scottish Government, NHSScotland, local government and the third sector has been convened to consider the impact of the reforms and potential mitigation actions that might be taken. Guidance has been issued to NHS Boards which sets out areas where Health Boards can focus mitigation actions in order to reduce the negative impact of the reforms. The Scottish Public Health Observatory is developing a set of measures to monitor impacts on public health over time.

Third Sector Partnerships

27. As a contribution to the Solidarity Purpose Target to reduce income inequality, the Scottish Government provides funding to a range of third sector organisations to advise people on benefit entitlements, income maximisation strategies and to promote engagement with anti-poverty initiatives. Given the significant potential for welfare reform changes to reduce incomes and increase income inequalities, this work has been more strongly oriented towards mitigation actions.

28. In addition, the Scottish Government is providing an extra £7.9 million from 2012-13 to 2014-15 for organisations in Scotland who provide advice and support services to help people cope with the transition to the new system. This includes £2.5 million for Citizens Advice Scotland and £5.1 million towards the new £7.45 million Making Advice Work grant funding programme, which focuses on improving access to advice for people in Scotland affected by welfare reforms.

29. This new Fund complements £4.8 million already committed by the Scottish Government to a grant-funding scheme which includes provision for advice and legal representation for people facing repossession, eviction and associated debt issues linked to the economic downturn.

30. The Scottish Government has also given £590,000 in direct funding to mitigate the effects of reforms to Housing Benefit, including through training, guidance and support to boost the capacity of social landlords and homelessness prevention services to understand and prepare for the changes. This is being delivered in partnership with the Chartered Institute of Housing, and others.

Private Sector Partnerships

31. The Scottish Government is working with Scottish Business in the Community (SBC) to facilitate a programme of work to engage the Scottish business community on welfare reform.

32. The Scottish Government is funding a dedicated post within SBC to undertake this engagement across a number of areas, including recognising and supporting employers who want to support employees affected by welfare reform; encouraging businesses to align their corporate social responsibility activity towards national and local mitigation actions; identifying a range of local opportunities for volunteering; and using skills, assets and expertise found in the business community to support innovation at a local level, in order to help benefit claimants manage the transition.

33. The Scottish Government will also continue its programme of research and analysis to understand the impact that the UK Government's welfare reforms are having on people across Scotland. Scottish Ministers will use this work to inform their continuing discussions with UK Government Ministers as we continue to press for changes and flexibilities to UK welfare reforms - changes which are urgently required to meet the needs of communities across Scotland.

Delivering a Social Wage

34. The Scottish Government believes in a fair and equal Scotland, and this is reflected in its policies, including the continuing commitment to the Social Wage. At a time when the UK Government's austerity programme is placing household budgets under financial pressure, the Scottish Government will continue to prioritise measures that provide direct support to households across Scotland.

35. The Social Wage includes measures such as freezing Council Tax until the end of this Parliament in 2016; free personal and nursing care for the elderly; the abolition of tuition fees; free prescriptions; free NHS eye examinations and the continuation of the concessionary travel scheme.

36. The Scottish Government has also acted to increase the provision of free nursery education, constrain water charges, and protect public sector employment through its commitment to no compulsory redundancies, supporting the Scottish Living Wage and protecting the pay of the lowest earners through its public sector pay policy.

37. In 2013-14, the Scottish Government is funding these commitments in full. Specifically it has:

- protected the health budget, so that by 2014-15 the resource budget of the NHS will be more than £1 billion higher than it was in 2010-11;

- included funding of £57 million within the baselines of territorial Health Boards to meet the costs of the commitment to abolish prescription charges. This measure potentially saves those with long-term illnesses around £104 per year, by comparison with England;

- continued to provide the funding for free NHS eye examinations for all;

- maintained the commitment to freeze Council Tax for the duration of this Parliament which, in relative terms, will benefit households with the lowest income the most. This is fully funded through the annual local government finance settlement;

- continued to deliver good value water charges, with the announcement in January 2013 of a below inflation increase in domestic water charges of 2.8 per cent for 2013-14, meaning on average charges are £54 lower than in England & Wales;

- begun the process of legislating to make a significant increase in the amount, and flexible delivery, of free early learning and childcare from 475 hours a year to a minimum of 600 hours per year. This will apply to 3 and 4 year olds as well as the most vulnerable 2 year olds (those looked after, or subject to a kinship care order);

- provided the funding for tuition fees to deliver free higher and further education in Scotland for all eligible students. This will save students and their families up to £27,000 per course, from autumn 2012, compared to the cost of studying in England;

- provided funding to maintain Free Personal and Nursing Care services;

- continued to fund concessionary bus travel for older and disabled people, benefiting over 1.2 million older and disabled National Entitlement Card holders who will, on average, save around £250 per annum;

- protected the pay of the lowest earners by supporting the Scottish Living Wage for the duration of this Parliament - a decisive long-term commitment to those on the lowest incomes; and

- targeted the lowest paid through its public sector pay policy for 2013-14, by requiring all employers covered by the policy to pay their staff the Scottish Living Wage (currently £7.45 per hour as of 1 April 2013), and provide a basic pay increase of more than 1 per cent for those staff with a full-time equivalent annual salary of less than £21,000.

38. The Scottish Government will continue to provide the funding to deliver on its Social Wage commitments in 2014-15. This funding will be given effect through the 2014-15 Budget Bill, which will be laid before Parliament in February 2014.

Chapter 8: Summary of Year 3 Legislative Programme

Accelerating Economic Recovery and Creating More Jobs

Budget Bill

The annual Budget Bill provides Parliamentary approval for the Scottish Government's spending plans, allowing the allocation of resources to our strategic objectives and supporting progress towards our vision of a more successful country, with opportunities for all of Scotland to flourish through increasing sustainable economic growth.

Revenue Scotland and Tax Powers Bill

The Revenue Scotland and Tax Powers Bill will establish Revenue Scotland as the tax authority which will be responsible for collecting Scotland's devolved taxes from 1 April 2015 - an important first step in taking on greater responsibility for setting and collecting taxes in Scotland. It will put in place a distinctive statutory framework which will apply to all devolved taxes and will set out in clear terms the relationship between the tax authority and taxpayers in Scotland, including the relevant powers, rights and duties.

Conclusion of Contracts Bill

The Conclusion of Contracts Bill will promote business and economic growth and modernise Scots law. It will be easier for companies in future to formally 'sign' and conclude contracts and use email as part of the process, reducing costs, making it more likely that Scots law is selected to govern the contract and making international trade easier.

Bankruptcy Consolidation Bill

The Bankruptcy Consolidation Bill will update Scotland's bankruptcy legislation in order to ensure that Scottish bankruptcy law is readable, accessible and easier for both practitioners and those affected by the law to use.

Creating a Fairer Scotland and Empowering Communities

Community Empowerment and Renewal Bill

The Community Empowerment and Renewal Bill will include measures designed to: strengthen joint working and accountability in Community Planning Partnerships; strengthen community voices in shaping and delivering outcomes; make it easier for communities to take on public sector assets; streamline the community right to buy; bring clarity to the common good and allotments; and make it easier for local authorities to recover costs in respect of dangerous and defective buildings.

RCAHMS and Historic Scotland Merger Bill

By creating a single national lead body, with its purpose and functions clearly defined in statute, the RCAHMS and Historic Scotland Merger Bill will help to focus and sustain existing work on investigating, recording, caring for, protecting and celebrating Scotland's historic environment, and will contribute to unlocking further potential for Scotland's rich heritage to deliver additional benefits across a wide range of policy areas.

Courts Reform Bill

The proposals in the Courts Reform Bill will take forward many of the recommendations from Lord Gill's Scottish Civil Courts Review. The Bill will give the Court of Session the status it deserves as a senior civil court; will significantly increase the role of the Sheriff Courts; will create a new Sheriff Appeal Court and a new Personal Injury Court; and it will introduce new summary sheriffs, able to deal with summary criminal cases and many civil actions including lower value claims. These measures will enable cases to be dealt with promptly and efficiently, by courts appropriate to the case, and at a proportionate cost to parties.

Damages Bill

The Damages Bill will reform the law on key aspects of damages for personal injury to ensure that justice is delivered efficiently and effectively for those harmed as a result of another's negligence.

Licensing Bill

The Licensing Bill will improve aspects of locally-led alcohol and civic government licensing in order to preserve public order and safety, reduce crime, and to advance public health. It will give local communities the power to regulate sexual entertainment venues in their areas and will protect public safety by creating a new licensing regime for air weapons. It will give authorities additional powers to help tackle metal theft, reducing the disruption and financial costs this crime causes to our infrastructure, businesses and public services.

Food Standards Scotland Bill

The Food Standards Scotland Bill will improve and protect the public health of communities in Scotland. The Bill will set up Scotland's own food safety and standards body, Food Standards Scotland. Its primary concern will be consumer protection - making sure that food is safe to eat, making sure it is what it says it is and improving diet and nutrition for consumers so that people in Scotland live longer, healthier lives.

Mental Health and Adults with Incapacity Amendment Bill

The Mental Health and Adults with Incapacity Amendment Bill will improve the operation and efficiency of the mental health and adults with incapacity legislation for service users and practitioners alike.

Mitigating the Impacts of Austerity on People in Scotland

Scottish Welfare Fund Bill

The Scottish Welfare Fund Bill will set out in statute Ministers' intentions for this new discretionary Fund to provide vulnerable members of the community with a safety net in an emergency, and with help to get household goods to set up home or to enable them to remain living in their community. The Bill will make provision about how the Fund will be delivered, what the public reporting arrangements will be, and how applicants to the Fund might challenge decisions.

Housing Bill

The Housing Bill will protect consumers, improve housing quality and secure better outcomes for communities. The Bill will end all right to buy entitlements for social housing tenants; create a new Housing Tribunal to resolve disputes in the private rented sector; strengthen the regulation of Letting Agents; increase flexibility for landlords in the allocation and management of social housing; modernise the licensing of mobile homes and park homes; and enhance local authorities' powers to improve the quality of private sector houses.

Other legislation being taken forward by the Scottish Government

As well as the new programme of Bills set out above, in the coming parliamentary year the Scottish Government will continue to progress those Bills from the Year 2 legislative programme which have started, or are about to start, their parliamentary passage. These Bills are:

- Scottish Independence Referendum Bill

- Children and Young People Bill

- Regulatory Reform Bill

- Bankruptcy and Debt Advice Bill

- Marriage and Civil Partnership Bill

- Landfill Tax Bill

- Public Bodies (Joint Working) Bill

- Procurement Reform Bill

- Victims and Witnesses Bill

- Tribunals Bill

- Criminal Justice Bill (including provision, to be brought forward at Stage 2 of the Bill, to end the system of automatic early release for certain dangerous offenders)

In addition to these Bills, the Scottish Government will also progress a wide secondary legislation programme of statutory instruments. Examples of these secondary legislation measures are provisions to:

- transpose, if the EU adopts them in due course, the Directive of the European Parliament and of the Council on public procurement (Classic Directive); the Directive of the European Parliament and of the Council on procurement by entities operating in the water, energy, transport and postal services sections (Utilities Directive); and the Directive of the European Parliament and of the Council on the award of concessions contracts (Concessions Directive);

- regulate advertising and street trading in the vicinity of Commonwealth Games locations;

- create a new prison monitoring system under the auspices of HM Chief Inspector of Prisons for Scotland to create a gold standard prison monitoring system for Scotland;

- in response to a Supreme Court ruling in April 2013 that an aspect of Agricultural Holdings legislation is non-compliant with the European Convention on Human Rights, bring forward a Compliance Order following discussion with stakeholders on how best to bring the law into compliance;

- implement the Scottish Rural Development Programme;

- ban the sale (and subsequently possession) of five high-impact aquatic non-native plant species;

- enable the variation of consents granted to build and operate electricity generation stations. This will allow some flexibility to amend developments post-consent, to deal with changing circumstances, advancements in technology, etc.;

- implement primary legislation (subject to completion of its parliamentary passage where appropriate):

- through the Regulatory Reform Bill, including the creation of a statutory code of regulatory practice, underpinning the economic duty on regulators which features in the Bill, and a national standard for mobile food van equipment;

- through the Land and Buildings Transaction Tax Act, the Landfill Tax Bill and the Revenue Scotland and Tax Powers Bill, putting in place the detailed framework for the administration of devolved taxes; and

- through the Post-16 Education Act we will make further progress with our education reforms, laying orders to create regional colleges and assigning other colleges to regional strategic bodies.

Footnotes

1. When compared to January to March 2007, the latest quarter's statistics (covering Jan-Mar 2013, published on 3 July 2013) have seen a reduction of 83.4 per cent in Clostridium difficile in patients aged 65 and over and 85.1 per cent in MRSA bacteraemias.

2. http://www.scotland.gov.uk/Resource/0041/00417011.pdf

3. http://www.scottish.parliament.uk/parliamentarybusiness/CurrentCommittees/57891.aspx

4. http://www.scotland.gov.uk/Topics/People/welfarereform/annualreport

5. The Society of Local Authority Chief Executives, Association of Directors of Social Work, and Association of Local Authority Chief Housing Officers.