Programme for Government 2016-17 – Construction at a glance

HolyroodAfter First Minister Nicola Sturgeon set out the Scottish Government’s Programme for Government to MSPs at Holyrood yesterday, Scottish Construction Now highlights the details and responses of interest to construction and the wider sector.

Infrastructure investment

Over this Parliament, almost £20bn will be invested in a major infrastructure programme designed to help build Scotland’s future.

The Scottish Futures Trust will also continue to review existing Private Finance Initiative (PFI) or Public Private Partnership (PPP) contracts, seeking opportunities to improve value and reduce the cost to the public purse, including ending contracts where possible and appropriate.

House building

An investment of more than £3bn for affordable housing supply over the life of the Parliament, delivering at least 50,000 homes with 35,000 of them for social rent.

The Scottish Government will work in partnership with local authorities to invest more than £572m in affordable housing in this financial year.

Local authorities have been allocated a share of £406m grant subsidy to deliver more affordable homes for 2016-17, over £100m more than the previous year.

The Scottish Government will also continue to help people buy an affordable home through shared equity programmes.


A new Scotland’s Energy Efficiency Programme (SEEP) will start in 2018 with accompanying regulation to improve the energy efficiency of the building stock over the long-term. More than £0.5bn will be made available over four years. It will make homes and buildings warmer, improving health and helping tackle fuel poverty, reduce emissions, minimise energy bills and create and support a supply chain across all of Scotland supporting around 4,000 jobs a year once the programme is fully operational.

SEEP benefits include:

  • measures to make homes and places of work warmer, promoting more affordable energy for consumers, helping to tackle poverty and improve the competitiveness of the Scottish economy
  • the opportunity to create a substantial Scottish market and supply chain for energy efficiency services and technologies, with an estimated 4,000 jobs per annum across Scotland, including in remote areas, based on the estimated overall investment of up to £10bn
  • measurable health and early years improvements through people living in warmer homes

  • regeneration of communities through upgraded building stock
  • substantially reduced greenhouse gas emissions contributing to meeting climate change targets
  • Around £10m for domestic energy efficiency measures – helping make homes cheaper to heat and reducing the costs of energy bills for householders.

    A new Energy Strategy will reaffirm the government’s commitment to reducing energy demand and supplying clean energy from renewable sources.

    A consultation on the regulation of private rented sector (PRS) housing to increase efficiency standards and heat regulations commensurate with the scale of the heat market. As part of the programme the government will also consult on phased regulation of other existing buildings to bring them up to higher energy efficiency standards as well as look at financial incentives.

    A Warm Homes Bill will also be introduced later in the parliament.


    Following the recommendations of the recent independent planning review, immediate actions have been outlined and a Planning Bill will be brought forward early in the Parliamentary session which will commit to a strong, high-performing system that enables housing and infrastructure delivery and supports quality of life of all communities by promoting quality of place and the public interest.

    Ahead of proposals for legislative change the recommendation for Simplified Planning Zones will be implemented to help attract investment and promote housing delivery. Later this year the government will work with local authorities to identify suitable locations.

    It will also build on the successful, streamlined approach to planning in Enterprise Zones and will work with local authorities to speed up decisions on major projects to deliver investment and economic growth more quickly.

    It will also support interim measures to modernise compulsory purchase orders in advance of legislation to ensure vacant and derelict land can be brought back into use.

    Digital Infrastructure

    A refreshed Digital Strategy which sets out plans to improve access to high quality digital connectivity will be published in late autumn.

    The Digital Scotland Superfast Broadband programme, which is delivering new fibre infrastructure across Scotland, is on track to deliver fibre access to at least 95 per cent of premises in Scotland by the end of 2017; having successfully delivered the 85 per cent target six months ahead of schedule. Over 630,000 homes and businesses across Scotland now have access as a result of the programme.


    Scottish Water will continue to invest up to £3.6bn over the rest of the current regulatory period 2015-2021. Projects in every part of the country will help to underpin economic growth – providing water and sewerage services for new housing and businesses as well as improving environment, drinking water and customer service standards.

    In particular this period will see major investment in Glasgow to modernise the sewerage network and address long-standing surface water management issues. Lending will continue to be made available to support the programme.

    Transport Infrastructure

    The Strategic Transport Projects Review (STPR) will be reviewed in alignment with the National Planning Framework to enable a comprehensive review of national infrastructure priorities. Progress on key road improvements, including improvements to the A77 south of Girvan, linking to the Cairnryan Ferry hub and the A75 and improvements to connect Dumfries and the M74, will be considered as part this review.

    Case for an extension of the Borders railway to be examined along with improvements to the A1, A7, and A68.


    The Scottish Government will deliver its planned investment in the rail network and continue to provide capital funding in support of Strathclyde Partnership for Transport’s subway modernisation programme.

    It will also work jointly with Network Rail and the Department for Transport to identify options to improve journey times, capacity, resilience and reliability on routes between Scotland and England, including a three hour journey time between the central belt and London.

    In 2016-17 it will continue to deliver a range of network improvement works through key rail projects, including the Edinburgh-Glasgow Improvement Programme, the Aberdeen to Inverness line, the Highland Main Line, Stirling-Dunblane-Alloa Electrification and the redevelopment of Dundee Station.


    The £1.4 billion programme of investment in road improvements and maintenance will continue in the coming year and include work to dual the A9 and A96 and also includes the Queensferry Crossing.

    As part of preparation for a Transport Bill later in the Parliament, during 2016-17 the Scottish Government will work with roads authorities, utilities, road users and others to develop legislative and other options for enhancing and improving the role of the Scottish Road Works Commissioner and the wider regulation of road works.

    Read about the sixteen projects that will benefit from the £100m infrastructure stimulus package here.

    Responding to the Programme for Government industry body Homes for Scotland pointed to the vital role that increasing the supply of new high quality, warm and energy-efficient homes could play in achieving the First Minister’s ambition of improving education outcomes and boosting the wider economy.

    Nicola Barclay
    Nicola Barclay

    Chief executive Nicola Barclay said: “With the First Minister making it clear that education lies firmly at the heart of this new Programme for Government, it is crucial that the intrinsic link between educational attainment and access to good quality housing is recognised.

    “Research has highlighted that improving access to new warm, energy-efficient homes has a number of important benefits. These include significant positive effects on children’s abilities in terms of skills and education as well as contributing more widely to the establishment of sustainable communities which help these youngsters thrive. In addition, every new home built in Scotland supports four jobs, stimulating economic growth.

    “Whilst we welcome the Scottish Government’s £3bn commitment to invest in affordable housing, it’s essential that we build enough homes of all tenures in order that our growing population can reach its full potential and make Scotland a better place in which to live, work and invest.

    “We are encouraged by the announcements in relation to the Planning Bill which will be brought forward early in the Parliamentary session and await further details on this and the implementation of the recommendation of Simplified Planning zones and support to modernise compulsory purchase orders which would mean vacant and derelict land would be brought back into use.

    “A refresh of the national strategy for housing for Scotland’s older people will also prove crucial in ensuring that people are housed in properties which are appropriate for each stage of their personal housing journey, potentially freeing up many much-needed family homes.”

    Referring to the announcement of a £500 million Scottish Growth Scheme providing investment guarantees and loans for “high-growth potential companies, with clear export growth plans”, Barclay pointed to the difficulties faced by small and medium sized builders in accessing development finance and highlighted the key importance they have to play in the domestic market in increasing housing supply, calling for similar support to be made available to them.

    The Royal Institution of Chartered Surveyors in Scotland said the First Minister has taken “some very welcome steps” which will help to return some much needed stability to the property and construction sectors.

    Gail Hunter
    Gail Hunter

    RICS regional director of Scotland, Gail Hunter, added: “While confidence in these markets wobbled following the Brexit result, the Scottish Government’s Programme for Government 2016-17 has provided key policies and legislative proposals that could provide much needed certainty in an uncertain world.

    “The Scottish Government has clearly recognised the emerging uncertainty that has followed the Brexit vote along with its impact on Scottish business confidence and development. The commitment to spend £4bn on infrastructure next year, along with a £500m package of support for private businesses, could go a long way to alleviate this. The government now needs to outline where this money will be directed: be that into new projects, or bringing forward the delivery of existing projects, such as the A9 and A96 dualling.

    “Furthermore, the development of a Scottish Rural Infrastructure Plan in 2017 is a welcome move. Prior to the election, we RICS called on the newly elected government to deliver such a plan, providing a clear strategy around greater connectivity of broadband, energy and transport. RICS stands by this appeal and calls on the Government to inject rural economies with the infrastructure required that will entice private investment to rural and remote Scotland.

    “There is little detail so far behind the announcement of the Scotland Energy Efficiency Programme (SEEP) to improve the energy efficiency of buildings, but we would encourage the Scottish Government to look to the maintenance of existing stock – particularly older stock, and support for owners and tenants of these properties - in the process of developing regulations for this initiative.”

    The Scottish Property Federation has welcomed moves to increase investor confidence and back start-up businesses.

    David Melhuish
    David Melhuish

    Commenting on two key aspects of the Programme for Government which were of particular interest to Scotland’s real estate sector, director David Melhuish said: “The real estate sector welcomes the government’s commitment to bring forward a Planning Reform Bill as part of its response to the independent review on planning reform. The planning system has a major role to play in assuring investors that Scotland is open for business and competitive and what we can ill afford is any perception that the planning system in Scotland is more difficult to engage and work with. We welcome the positive momentum on planning reform which has been generated following the report of the independent review panel and look forward to engaging constructively with the government as the Bill is brought forward.

    “The rollout of Simplified Planning Zones for housing is particularly welcome news and we hope that the Government will continue to engage with housebuilders and the development industry as well as local authorities to make use of the best practice which has emerged in places such as Hillington Park where a commercially led SPZ has been particularly successful.”

    “The Scottish Growth Scheme is a positive use of government powers to support business growth. The real estate sector has a part to play in delivering new jobs and investment in our towns and cities. Even a small major office or industrial development has the potential to deliver hundreds of new jobs but the sector needs positive support, including a business rates system which focuses on growth, in order to deliver new developments to drive the economy.”

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