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SCOTLAND TODAY

THE PLACE

13. Scotland lies in North-West Europe between the North Sea and the Atlantic Ocean. It has a land area of 78,000 km ², a coastline of over 10,000 km. Much of the country is of high environmental quality, with 26% of the land area covered by natural heritage designations (see Map 1). While 95% of the land area is classified as rural, geology, topography and climate limit agricultural potential and only 6% of the land area is classed as prime agricultural land. The climate provides good conditions for growing trees and the last century saw a large expansion of plantation forestry.

14. Scotland can be divided into four broad natural zones, the Northern Highlands and Islands, the Central Highlands, the Lowlands and the Southern Uplands. Settlement has been strongly influenced by land form (see Map 2). It is still largely based on the pattern of burgh settlement begun in the 12th Century, modified by industrialisation and the depopulation of rural areas in the 18th and 19th Centuries, and supplemented by New Towns and urban expansion in the 20th Century.

15. Although only 5% of the land area is classed as urban, its people are highly urbanised. Most of the population lives in the Lowlands, distributed between six relatively small cities and a range of medium-sized and small towns. Nearly all of Scotland's highest quality agricultural land is in the Lowlands. On the East Coast, the land is deeply cleft by several wide firths which provide the focus for settlement, international commerce and marine-related economic, leisure and recreational activity, as well as supporting internationally important estuarine habitats. The Firth of Clyde, which has similar attributes, is the main focus of human activity on the West Coast.

16. Large parts of rural Scotland are very sparsely populated by European standards. In the Northern Highlands and Islands settlement is focused on the numerous islands, including the distinctive archipelagos of Shetland, Orkney and the Outer Hebrides, and on the shores of the narrow sea lochs which penetrate the mountainous hinterland. There are around 100 inhabited islands, 44 with a population of 20 or more. Their combined population is around 90,000. The Central Highlands are dominated by high mountain plateaux, with population focused in small settlements in the intervening glens and straths. The Southern Uplands are an area of open, rolling hill country managed for grazing and timber production, with the majority of the population living in small towns in the principal river valleys.

17. In parts of the Lowlands, particularly in West Central Scotland, the closure of older industries has left poor environments and significant areas of vacant and derelict land, some of it contaminated. Over 100km ² is classed as vacant or derelict, 25% of which is in Glasgow and North Lanarkshire. Much progress has already been made in addressing this issue. Major land reclamation in former mining areas and projects such as the Central Scotland Forest and the restoration of the Forth and Clyde and Union Canals have improved the environment and opened up new opportunities for economic development and recreation. But more requires to be done to ensure that all communities in the Central Belt are attractive places in which to live and work.

18. Although they have distinctive identities, the Northern Highlands and Islands, the Central Highlands and the Southern Uplands have some key similarities. They all have low population densities, sparse settlement patterns and valuable natural heritage and cultural resources. Primary industries such as farming and fishing have declined and opportunities for economic diversification are being pursued. They have supported substantially larger populations in the past and have the capacity to absorb more development without damage to the environment. The success of many parts of the Highlands and Islands in creating new economic opportunities and reversing long-term population decline points to the potential of our remoter rural areas.

19. Our landscape has been shaped by human activity since prehistoric times. Natural and cultural landscapes and the historic fabric of our cities, towns and rural areas are important aspects of our national identity and the distinctive character of each part of Scotland. Edinburgh's Old and New Towns, New Lanark, St. Kilda and the Neolithic monuments of Orkney have been accorded an international status as World Heritage sites and the Antonine Wall has been nominated as an additional Scottish site. Cairnsmore of Fleet/Merrick Kells/Silver Flowe, Taynish, Beinn Eighe and Loch Druidibeg are UNESCO Biosphere Reserves. The Lochaber and North West Highland Geoparks are part of the UNESCO European Geopark Network. Natural and historic environments help create a sense of place, contribute to the quality of life and are a rich resource for tourism and leisure, our creative industries, education, and national and regional marketing. It can also provide a focus for regeneration. The Framework recognises the importance of protecting and promoting these key assets and supports their sustainable management.

20. Marine resources are vitally important to Scotland, supporting a wide range of economic activities. Our territorial waters extend to nearly 89,000 km2 and support around 40,000 marine species. The Scottish coastline accounts for 8% of the entire coastline of Europe. It varies enormously in character, from the heavily developed firths of the Central Belt to remote areas of great natural beauty. Around a fifth of the population lives within 1 km of the sea, while 70% live within 10 km. Fisheries, the energy industry and leisure activities are expanding into new territories and harnessing new marine resources.

21. Scotland is remarkably rich in water. It is an important resource for the economy, notably brewing and distilling; not only whisky, but also most of the UK's gin and vodka are bottled in Scotland. Hydro-electricity is a significant carbon free part of Scotland's energy mix. Our water environment is essential to agriculture and forestry and also supports a rich wildlife. Landscape, tourism, and the international image of Scotland draw heavily on our freshwater and marine environments.

22. Overall, the water environment is in good condition. Nevertheless, SEPA's 2007 assessment indicates that about 40% of rivers, lochs, firths and coastal waters are at risk of not meeting the standards required to support healthy ecosystems. Problems include:

• rivers, lochs, firths and groundwater on the East Coast, in the Central Belt and in the South-West which are polluted by diffuse agricultural pollution, potentially affecting quality of water supply;
• rivers in urban areas intermittently polluted by sewer overflows and run-off from roads;
• Highland rivers and lochs adversely affected by high levels of abstraction and damming for power generation and water supply; and
• damage to the physical condition of rivers and firths caused by urban development and agricultural intensification.

The Central Belt, the East Coast and the South-West are the areas with the most water bodies at risk.

PEOPLE

23. The population of Scotland was 5,116,900 in 2006, an increase of 38,500 since the publication of the first National Planning Framework in 2004. Higher birth rates and increased in-migration, primarily from Eastern Europe, have reversed the recent trend towards decline. Over 40% of the population lives in the 6 cities. Glasgow and Edinburgh account for a third of Scotland's population. The distribution of the population has been changing. Between 1996 and 2006 the highest increases in population were in West Lothian (+10%), East Lothian (+7%), Stirling (+6%) and Perth and Kinross (+5%). The largest falls were in Eilean Siar (-8%), Dundee (-7%), Inverclyde (-6%) and Aberdeen (-5%).

24. The population is ageing, with a growing number of people in the older age groups and fewer young people. The last census showed an 18% decrease in under 15s and a 29% increase in over 75s. The Central Belt has particularly high death rates and low fertility rates in comparison with the rest of Scotland.

25. The number of households has been increasing steadily, by between 11,000 and 23,000 each year since 1991. Average household size has been getting smaller. There were 2.3 million households in Scotland in 2006.

THE ECONOMY

26. The growth in Scotland's Gross Domestic Product ( GDP) has averaged 2% over the past 25 years. This is lower than the UK average of 2.5. Recent economic performance has been stronger than the average across 25 EU states. However, Scotland's performance does not yet match that of the most successful small European countries. Scotland scores relatively poorly on growth in productivity (where GDP per hour worked is 2% below the UK rate, 15% below Germany and 22% below France) and the country has the second lowest business start-up rate in the UK.

27. Like much of the developed world, Scotland has experienced a long-term decline of traditional industries and a growth in service-based activity. Private sector services account for 50% of total output, with business services accounting for 17% of that. The public sector, including health and education, accounts for 22% of the economy. Manufacturing accounts for around 16% of GDP and construction a further 6%. Mining and energy contribute 4% and agriculture the remaining 2%.

28. The economy has established strengths in tourism, financial services, electronics, whisky and energy, and new centres of expertise are being developed in areas such as biotechnology. In the manufacturing sector, electronics and textiles have experienced significant declines, with electronics particularly affected by competition from lower cost economies in Asia. The food and drinks sector employs over 47,000 people, generating sales of £7.3 billion (£3 billion for whisky alone). Manufacturing businesses are strongly export-oriented. The USA is still the top destination for Scotland's exports. Within the EU, the top four export markets are the Netherlands, Germany, France and Spain.

29. Scotland's labour market has been performing well in recent years, with more people in employment than ever before. In mid 2006, nearly 80% of the working age population were economically active and the proportion of people in work is now above the UK average. Unemployment is at its lowest level for decades and lower than in many of the European countries which are our main competitors.

30. The number of employee jobs (excludes self-employed) increased by 4% between 2001 and 2005. The Shetland Islands and Orkney experienced very significant percentage increases (31% and 14% respectively) in their relatively small workforces. The biggest mainland increases were in North Lanarkshire (10.9%), South Lanarkshire (8.4%), Perth and Kinross (8.3%) and West Lothian (8.2%) (see Map 3). Edinburgh experienced an increase of 6.6%, Glasgow 6.0%, Dundee 5.7%, but Aberdeen only 1.2%. Significant decline in the numbers employed occurred in East Dunbartonshire (-9.4%), Dumfries and Galloway (-7.9%), Clackmannanshire (-7.8%) and North Ayrshire (-5.2%).

31. There are marked economic disparities across the country. The proportion of people claiming unemployment benefit ranges from 0.8% in Aberdeenshire to 5.3% in Glasgow. Per capita incomes in Edinburgh are more than double those in parts of the Highlands and Islands. Activity rates in Glasgow, Lanarkshire, Ayrshire, Dundee and Stirling and Clackmannanshire remain significantly below the national average, whereas those in the Shetland Islands, Orkney, East Dunbartonshire, Highland and East Renfrewshire are much higher than the national average.

32. Scotland has areas of real economic vibrancy and some world class urban and rural environments. In other areas, however, past industrial activity, economic change and poor land and urban management have left a legacy of social and environmental problems. There are still significant disparities in wealth and opportunity across the Central Belt, with persistent concentrations of disadvantage in parts of the West. Knowledge economy jobs are heavily concentrated in and around Edinburgh and Glasgow. Research suggests that parts of Ayrshire, Dumfries and Galloway and the Borders are failing to keep pace with the rest of Scotland in the creation of knowledge economy jobs.

33. The workforce is highly qualified. Around 30% of people of working age hold some form of higher education qualification compared to 26% in the UK. Concentrations of highly skilled people exist in Aberdeen, Stirling, Perth and Kinross and Edinburgh, as well as East Renfrewshire and East Dunbartonshire outside Glasgow. Urban areas have the highest concentrations of people with degrees and remote rural areas the lowest. Areas with very low skill levels exist within the fabric of our urban areas, particularly in and around Glasgow and Edinburgh. There are higher proportions of people with degrees in rural areas where centres of higher education have been established. A low proportion of university graduates does not itself equate to disadvantage but may mean that communities are less well placed to access higher value jobs. Education and training will be critical in maintaining the momentum of Scotland's knowledge economy and promoting social inclusion.

34. While Scotland has a strong skills base, performance in research and development is mixed. Higher education research and development is a significantly higher proportion of GDP than for the UK and Organisation for Economic Cooperation and Development ( OECD) countries. Edinburgh, Glasgow, Aberdeen and Dundee have relatively large concentrations of university-based research and development activity. However, business-based research and development is less well developed and the connectivity between Scotland's universities and locally-owned firms is still relatively low. Business-based research and development activity is focused on West Lothian (37%), Edinburgh (21%) and North Lanarkshire (10%). In conjunction with Scottish Enterprise and NHS Lothian, Greater Glasgow and Clyde, Grampian and Tayside, the universities of Edinburgh, Glasgow, Aberdeen and Dundee have established the world's first translational medicine collaboration project.

35. Scottish Financial Services have a European and world profile. More than 220,000 people are employed in financial services and related industries, representing almost 10% of the workforce. The sector is one of the fastest growing parts of the economy, with an annual growth rate of 4.8% between 2002 and 2007. Recent performance has been better than the UK average for the sector. The industry is primarily focused on Edinburgh but is of growing importance in Glasgow and has a presence in Perth and Aberdeen. Career opportunities, competitive salaries, good international links and quality of life considerations are now attracting highly qualified staff from London and overseas.

36. Tourism provides employment for some 210,000 people (about 9% of the total workforce) and tourists spend around £4.2 billion a year. While the number of visitors from the rest of the UK is declining, the number of overseas visitors is growing strongly. The UK currently accounts for 83% of tourism trips to Scotland. The USA is still Scotland's biggest overseas market, accounting for 25% of overseas spend. New markets are emerging in Scandinavia and Central and Eastern Europe. The Highlands, Edinburgh and Glasgow are Scotland's most popular tourism destinations. Many visitors are attracted by Scotland's strong cultural heritage and rich natural environments. 87% of overseas visitors to Scotland arrive in the UK by air and 62% of UK visitors to Scotland come by car.

37. Since the 1970s, the development of North Sea oil and gas fields has made an important contribution to the Scottish economy, and underpinned prosperity in the North-East. The oil and gas industry currently provides more than 100,000 jobs directly and indirectly, around 40,000 in the North East. While North Sea oil production has been declining in recent years, reserves of oil currently stand at around two billion tonnes - as much as has been produced in the last 25 years. Current and future fields are expected to remain productive until at least 2020. Total employment in North East Scotland's energy industry is forecast to fall to 25,000 by 2021. However, as the North Sea fields have matured, many of the companies established in Aberdeen have retained the city as a base for headquarters functions and international operations. As many of the world's unexplored oil fields lie under very deep water, Scotland's expertise in sub-sea technology will continue to be in demand. The skills developed in the North Sea are now also being applied in the development of a range of renewable and clean energy technologies.

38. The life sciences industry is growing at 30% per annum (compared to a European average of 15%). The country is also establishing itself as a centre of excellence in microelectronics and is well placed to participate in the application of optoelectronics in medicine, transport, construction and computers. Creative industries (the media, music production and design) are a growth sector, particularly in Glasgow, with an annual turnover of £5 billion and contributing 4% to GDP.

39. Retailing accounts for 6.9% of Scotland's gross value added ( GVA) (compared with 5% in the UK) and employs 1 in 10 of the workforce. Glasgow is ranked second in the UK (behind London's West End) in Experian's 2007 Retail Centre Ranking. Edinburgh is ranked 7th.

40. Cities are key drivers of the economy and the hubs of wider regional economies. The international connectivity of Edinburgh and Glasgow has improved dramatically over the last decade, creating new opportunities for business and tourism. Analysis by the European Union identifies Edinburgh and Glasgow as Metropolitan European Growth Areas ( MEGAs) with potential for further development and both cities are strong knowledge economy centres in European terms. To have two such centres so close together is unusual for areas outside Europe's economic core. The Glasgow/Edinburgh metropolitan region contains 63% of Scotland's population, generates 67% of national GDP and has contributed more than 80% of the growth in Scotland's GDP over the past 5 years. It ranks among the top 30 concentrations of economic activity in the world.

41. Edinburgh's economic success is based on financial and business services, public administration, higher education and research, and culture and tourism. Incomes are high, unemployment is low and the city is ranked very highly in quality of life indices. While population and the number of households in the wider city region are projected to grow substantially, the city is coming up against constraints to future growth in the form of traffic congestion, difficulties in filling vacancies, steeply rising land and house prices, high commercial rents and a growing tension between the demand for land for development, particularly housing, and the present green belt boundaries.

42. Glasgow has shown a strong economic performance over the past decade, outperforming the other cities in employment growth. Productivity is now above the Scottish average and levels of unemployment have been significantly reduced. Glasgow is attracting increasing numbers of tourists. The Kelvingrove Art Gallery and Museum was Scotland's top visitor attraction in 2006. However, the decline of the city's traditional industries during the 20th Century has left a legacy of under used assets - both people and land. Almost 100,000 Glaswegians of working age are currently economically inactive and dependent on incapacity and other benefits, while 12% of Scotland's vacant and derelict land lies within the city's boundaries. Several major urban regeneration projects are transforming the city's fabric. The £2.8 billion of public and private investment going into the Clyde Corridor over the next ten years will have a significant impact on the whole of the Scottish economy, create new opportunities for local people, bring substantial areas of land back into economic use, and make a major contribution to tackling the concentrations of deprivation in many communities in and around the East End of the city.

43. Aberdeen has established itself as the oil capital of Europe. Full employment, high incomes and good urban and rural environments combine to provide a good quality of life for much of the population in the city and surrounding region. However, traditional sectors of the economy are under pressure and employment in the oil and gas sector is projected to decline. Parts of the city require restructuring and there are small but persistent pockets of deprivation. North East Scotland is building on Aberdeen's strengths as an energy centre by diversifying into new technologies, including renewables and carbon capture, and seeking to enhance its reputation as a competitive business location and pursue further opportunities in leisure and recreation.

44. Dundee has established itself as a leading centre for biotechnology and multi-media software development and has successfully transformed its city centre. However, the decline of traditional industries has led to a loss of population and left the city with relatively low activity rates, concentrations of social deprivation and significant areas of vacant and derelict land. The city is a strong regional centre. Its large student population contributes to an atmosphere of vibrancy and diversity, but the city still loses too many of its young people in their 20s.

45. Inverness is broadening its economic base and developing its role as the Highland capital. It is a key hub for Highland tourism and ready access to the environmental and recreational resources of the Highlands mean that it is able to offer a high quality of life. Its population has increased by a third since the 1970s, making it one of the fastest growing small cities in North West Europe. Sectors such as retailing, public administration and business services have expanded significantly. However, the city's economic base remains relatively narrow and there is a need to diversify and attract a wider range of high quality jobs.

46. The Upper Forth settlements of Stirling, Falkirk and Grangemouth make a major contribution to the economy based on their location at a key crossroads in the transport network. Grangemouth is a major port and distribution centre and the hub of the chemicals industry. Stirling's assets include its accessibility, a lively town centre, an important historic core and its modern campus university. Falkirk is one of the top 10 shopping centres in Scotland. The population of the area is growing rapidly and it is becoming an increasingly popular tourism and leisure destination. The Falkirk Wheel attracts some 400,000 visitors each year.47. While the cities are key drivers of the economy, a substantial proportion of Scotland's population lives in small and medium-sized towns. Some, such as Livingston, Dunfermline, East Kilbride and Hamilton, have prospered, consolidating their role as regional and local service centres. Others have suffered a loss of vitality as a result of the decline of traditional industries and changing patterns of retailing and other services, both public and private sector. Some have increasingly taken on a dormitory role and those with a narrow economic base have found it particularly difficult to adapt to change. Examples include former mining towns in Lanarkshire, Ayrshire, the Lothians and Fife, Borders mill towns and the North East fishing ports. In North and East Ayrshire, Inverclyde and West Dunbartonshire the decline in traditional industries has not been compensated by new employment in the service sectors. Economically depressed towns can suffer social and environmental problems as severe as those to be found in the cities.

48. Rural areas have experienced major structural changes with the traditional sectors of farming and fishing now complemented by an expansion of employment in services, diversification into a wide range of new activities and the growth of the leisure economy. Since the mid-1960s, parts of rural Scotland such as Aberdeenshire and many parts of the Highlands and Islands have seen a growth in population and jobs.

49. The economic fortunes of the Highlands have turned round remarkably, following a century or more of decline. The number of people in employment has increased by nearly 50% over the last 30 years. The Moray Firth area has experienced substantial growth, while Orkney and Shetland have benefited from oil and gas related activity. The expansion of salmon and shellfish farming, tourism, food processing, small-scale manufacturing and service provision has contributed to growth in areas such as Skye, Mull, Arran, Wester Ross, Ardnamurchan and Mid Argyll. The whisky industry continues to make an important contribution to the economy on Speyside and in parts of the West Highlands. Defence facilities, such as air bases and the significant Defence Estate land holdings in and around Edinburgh and Inverness, on the West Coast and in the South-West make a significant contribution to the economy in parts of rural Scotland. Lerwick, Kirkwall, Stornoway, Thurso, Fort William, Oban and Lochgilphead have grown as their roles as service centres have expanded. Early investment in new communications technologies has led to the creation of some 3,500 jobs in the tele-service sector. Progress has not, however, been universal. Some of the remoter areas such as Eilean Siar, parts of Caithness and Sutherland and Kintyre continue to decline.

50. The broad changes taking place in the rural economy are also evident in the South of Scotland, though improvements in economic fortunes have generally been less dramatic. In the Borders, the traditional industries of textiles and food processing remain significant components of the economy and there has been an increase in exports in the paper, publishing and electronics sectors. Employment in public services and tourism and leisure is increasing and the economy is growing more rapidly than that of Scotland as a whole. The economy of Dumfries and Galloway is based on livestock farming, forestry, tourism, manufacturing and food processing, with a growing strength in the renewable energy sector. Exports are increasing and 600 new jobs have been created at the Crichton Business Park in the last 3 years. The area produces 27% of Scotland's sawn timber from its substantial areas of plantation forestry. Average earnings in the South of Scotland remain well below the national average and significant numbers of Borders residents commute to work in the Edinburgh area.

51. Forestry and wood processing industries employ around 10,800 people and forestry industries contribute £650 million to the Scottish economy. Most of the timber resource is in Dumfries and Galloway, the Borders, the Highlands and Islands, Argyll, Aberdeenshire, Tayside, and the Forth Valley. By 2016 the supply of softwood will exceed 8.4 million m3, a doubling of the current harvest. A significant amount of hardwood production is now taking place and new markets are emerging in the production of energy from biomass.

HOUSING

52. Housing is the largest single urban land use and influences the appearance of urban and rural landscapes. At the end of 2005, there were approximately 1.6 million owner-occupied homes (67% of the total housing stock); 363,000 homes rented from local authorities (15%); 252,000 homes rented from housing associations (11%); and 178,000 privately rented homes (7%). The house building industry makes a significant contribution to the economy (an estimated £5 billion in 2004). It is also a major employer, directly and indirectly responsible for the livelihoods of more than 110,000 people.

53. Housing supply is under pressure in many areas. Economic, financial and demographic factors have fuelled the demand for houses to buy, driving up house prices. Since 2002, all parts of Scotland have experienced house price increases at a rate well above the growth of average earnings. In Edinburgh and the Lothians, Perth and Kinross and the Highland Council area prices are now more than 4 times average annual incomes (see Map 4). The sustained house price increases in recent years have not been met with any significant increase in the overall supply of new housing. While house prices were 72% higher in 2006 than in 2002, the level of new build increased by only 2%.

54. High prices constrain people's tenure choices, reducing Scotland's economic competitiveness, limiting workforce mobility and skewing wealth towards the top end of the housing market. While the rate of increase in prices may have begun to moderate, their relatively high level is excluding many households from the market. Furthermore, unmet demand for home ownership has aggravated pressures on social housing in some areas. Problems are particularly acute in Edinburgh and the Lothians, where up to 30% of working households are unable to afford even the cheapest houses, and in some rural areas where a lack of affordable housing and land available for building can affect the ability to retain the existing population and attract new residents with the skills to support diversification of the economy. Recent investment in affordable housing does not, however, mirror the geography of need.

55. While Edinburgh and the Lothians, Perth and Kinross, Highland and Argyll and Bute have the highest levels of need for affordable housing, areas around Glasgow (East Dunbartonshire, South Lanarkshire and East Renfrewshire) also have sizeable shortages, although in some cases it may be possible for these to be offset by surpluses elsewhere in the local housing market area. Some areas have an overall surplus of affordable housing which manifests itself in difficult to let or empty homes. However this does not mean that such areas do not have a need for new affordable housing. New affordable housing can play an important role in creating more sustainable mixed communities or enabling households with particular needs to live independently within the community.

TRANSPORT

56. Scotland's transport system (see Map 5) is already relatively well-developed and some of the remaining gaps in the network are currently being addressed. The upgrading of the A830 to the west of Fort William will remove the last section of single carriageway trunk road in Scotland, improving journey times and safety. The opening of the M9 Spur Extension provides the missing link between the M8 and M9 motorways and the Forth Road Bridge, alleviating congestion at South Queensferry and Kirkliston. Work in England to upgrade the A74 to motorway standard south of Gretna will help to reduce journey times on the Euro-route to Ireland Rail improvements have included the opening of the Larkhall to Milngavie line and completion of track laying on the Stirling, Alloa, Kincardine line. Advance works for the Airdrie to Bathgate rail line have started, with completion anticipated by 2010. From 2008 improvements to the West Coast Main Line and a revised timetable will allow four-hour train journeys between Glasgow and London.

57. People in Scotland are travelling 50% further per annum within Great Britain than 20 years ago. Commuting accounts for 75% of internal travel. Over three-quarters of the average distance travelled is by car, either as a driver or passenger. Rail and bus journeys account for the next largest share, with walking, cycling and taxi trips accounting for a much smaller proportion.

58. The car therefore remains the dominant form of transport. It plays a major role in the travel patterns of most people, particularly in rural areas where the dispersed population makes public transport provision more difficult. Even so, public transport plays an essential role in maintaining the viability of many rural communities.

59. In 2001, over 50% of the population were able to get to work within 20 minutes and 92% within one hour. The Scottish average commuting time of 20 minutes is two thirds of the EU average. However, 69% of commuter journeys were made by car in 2006. Travel to work by public transport is relatively stable. The proportion of journeys to work made on foot is gradually declining. Congestion is a problem in some areas and commuting is a significant contributor to peak congestion on the road and rail network.

60. Despite short average journey-to-work times, about 23% of Scotland's workers commute long distances. For this type of journey, 80% travel by car, 8% by bus and 7% by train. The last census indicated that over 45% of working age people in accessible small towns and rural areas travel to work in urban areas, 85% of them by car.

61. The efficient and competitive movement of goods through the supply chain is a key element in meeting consumer demand and supporting economic growth. The vast majority of freight still moves by road, 173 million tonnes in 2004. This compares with 10.9 million tonnes of freight moved by rail. However, rail freight has grown by 60% since 1995 and is at its highest level for 30 years. 75% of the rail traffic is coal, 10% cement with the balance consisting of oil and consumer goods. Since 1997, over £60 million has been invested in freight facilities grants to support the transfer of freight to water and rail, removing nearly 30 million lorry miles from Scottish roads. Large quantities of timber are now being moved by rail and water. With completion of the enhancement of the rail loading gauge between Mossend and Elgin, more freight can now be moved between the Central Belt and the North East by rail.

62. Ports make a vital contribution to the economy and are modernising to meet the growth in world trade. 102 million tonnes of freight passed through Scottish ports in 2006 and for the eleven major ports 40% was exported abroad. The total trade value of port traffic is around £65 billion. The Sullom Voe facility in Shetland and Orkney's Flotta terminal provide deep water harbour facilities for handling bulk oil, Forth Ports' combined facilities provide for the handling of bulk fuel, and Aberdeen also handles significant tonnages of oil products. Large tonnages of granite aggregates are shipped from the coastal quarry at Glensanda and Hunterston handles most of Scotland's coal imports. National and international ferry services provide key freight and passenger links with Continental Europe and Northern Ireland. Our ports and harbours also support domestic ferry services, thus playing a vital role in maintaining rural communities and supporting tourism. A forthcoming review of lifeline ferry services will inform the development of a strategy to 2025.

63. The five main airports are Edinburgh, Glasgow, Prestwick, Aberdeen and Inverness. There is also an airport at Dundee and nine smaller airports provide lifeline services to communities in the Highlands and Islands. Services from Newcastle Airport are accessible from parts of the South of Scotland. Passenger numbers increased by 93% in the 10 years to 2005, to reach 23.8 million per annum. The expansion of the services offered by the low-cost airlines has made a major contribution to this growth. Passenger traffic has grown fastest at Prestwick and Edinburgh. Prestwick has grown most rapidly (67% per annum), but from a very low base. It now offers scheduled flights to 32 destinations across Europe. Passenger numbers have grown by 16% per annum at Edinburgh, 6% per annum at Glasgow and 3% per annum at Aberdeen over the same 10 year period. In the summer of 2007, passenger throughput at Edinburgh Airport overtook that at Glasgow for the first time. 75 thousand tonnes of freight were moved through Scottish airports in 2005.

64. The main airports have developed distinct roles. Glasgow offers direct services to North America and supports the widest range of holiday charter flights. Edinburgh has key roles in business traffic, the international short haul scheduled network and express freight and air mail services. Prestwick has seen a rapid expansion of low cost-services and has a lead role in heavy freight. It is also an important centre for the repair and maintenance of aircraft and air traffic control. Aberdeen is geared to the needs of the oil and gas industry, with scheduled flights to Bergen and Stavanger and a large heliport serving offshore installations. It also offers services to France, Ireland, Denmark and the Faroe Islands and a range of chartered flights. A new long-haul service to Houston, Texas will be launched in the next few months. Dundee Airport offers scheduled services to London City, Birmingham and Belfast. Inverness provides the only scheduled air services from the Highlands and Islands to London, scheduled services to English regional airports, Dublin and Belfast and a domestic air transport gateway to the Islands.

65. The masterplans prepared for Edinburgh, Glasgow Aberdeen and Inverness airports stress the need for high quality access. Development plans are providing for airport expansion in accordance with the requirements set out in the UK Air Transport White Paper. The West Edinburgh Planning Framework is being refreshed to provide an integrated approach to the resolution of the congestion and land use issues around Edinburgh Airport and the creation of an enhanced international gateway to the capital.

66. The Air Discount Scheme has reduced fares, thereby improving access, for those living in remote communities in the Highlands and Islands. Passenger numbers through Highland and Island airports and on lifeline ferry routes have increased significantly in recent years.

67. The six cities are key hubs in the transport system and the air services available from Edinburgh, Glasgow and Aberdeen give these cities important international gateway functions. Edinburgh Waverley and Glasgow Central are national rail gateways and the Glasgow conurbation has the second largest commuter rail network in the UK. Perth, Ayr, Dumfries, Fort William and Oban are also important regional transport hubs and interchanges. The ferry service to Zeebrugge in Belgium has established Rosyth as an important European gateway for tourists as well as freight. The ports of Stranraer and Cairnryan are gateways for traffic to and from Ireland. Aberdeen and Lerwick have important gateway roles for Scandinavian and North Atlantic links. The rapid expansion of air services from Prestwick has made an important contribution to Scotland's international connectivity.

ENERGY

Electricity Generation

68. The electricity generated in Scotland is produced by coal, gas and oil-fired and nuclear power stations, hydroelectric schemes and wind farms, with a small contribution from biomass and energy-from-waste plant. Around 15% of the electricity generated is exported to the rest of the UK. Renewable capacity is increasing, with installed capacity now exceeding that of nuclear power.

69. While important elements of Scotland's existing baseload generating capacity are scheduled to close over the next 10 years, extensions to the lives of coal-fired and nuclear power stations are possible. Scottish Power is investigating the feasibility of retrofitting clean coal and carbon-capture technology at the coal-fired power stations at Longannet in Fife and Cockenzie in East Lothian, which could extend their lives beyond 2015. British Energy has announced that the Hunterston B nuclear power station in North Ayrshire will continue to operate until at least 2016. The nuclear power station at Torness will continue to make a contribution until at least 2025. The Scottish Government does not support the construction of new nuclear power stations in Scotland.

Guidance on Windfarms

70. Government planning policy on renewable energy is set out in the Scottish Planning Policy on Renewable Energy ( SPP6). The SPP identifies the national policy considerations which require to be reflected in development plans or supplementary planning guidance, including areas which should be afforded significant protection. It gives a clear role to local and national park authorities in relation to local considerations, the identification of broad areas of search for locations capable of accommodating onshore windfarms, and setting criteria which accord with national policy. The Government wants to see the approach to windfarm siting set out in SPP6 put into practice urgently and has asked local authorities to engage with communities and other parties with a view to preparing supplementary planning guidance. That guidance should provide greater clarity for developers and local communities and help to speed up the decision-making process.

Fossil Fuels

71. Oil and gas continue to make a significant contribution to Scotland's economy. Over 4% of the workforce is engaged in oil and gas production. The North Sea contains Western Europe's largest oil and natural gas reserves and is one of the world's key non- OPEC producing regions. To date, around 34 billion barrel of oil equivalents (boe) have been produced. Future potential could be up to 28 billion, though current investment plans target only 11.5 billion.

72. There are large extractable reserves of coal in South and Central Scotland. Coal is won by opencast methods across the Central Lowlands from Ayrshire to Fife and permission has been granted for two workings in Dumfries and Galloway. Consideration has also been given to opening a deep mine at Canonbie. National planning policy on opencast coal working is set out in the Scottish Planning Policy: Opencast Coal ( SPP16).

WASTE

73. From a low base of only 3.8% in 2000, the proportion of municipal waste being recycled or composted increased to 28.4% in 2006/7. The volume of waste from all sources being sent to landfill halved between 1994 and 2004, falling to just under 8 million tonnes.

74. SEPA has estimated that approximately 22 million tonnes of controlled waste were produced in 2005-2006. Over 8 million tonnes arose from industrial and commercial sources. Over 10 million tonnes was construction and demolition waste. Almost 3 million tonnes was household waste, and less than 0.5 million tonnes was agricultural. 7.2 million tonnes went to landfill, with approximately 15 million tonnes of mainly inert material being recovered; and around 280,000 tonnes was incinerated. To support the National Waste Plan, published in 2003, the Government launched the Business Waste Framework in 2007. A key aim is to reduce business waste by at least 200,000 tonnes per year.

75. Landfill capacity is uneven across Scotland. Indeed, 9 local authorities do not have any operational non-inert landfill sites. However, there is sufficient landfill capacity to meet requirements to 2020 everywhere except Argyll and Bute, which could have its short-term needs met by landfills in adjacent authorities. Highland Council has limited landfill capacity within its own boundaries. Lothian and the Borders have capacity beyond 2030 based on existing landfill rates. By the end of 2007 the number of landfill sites able to receive non-inert waste is expected to fall from 44 to 40.

BROADBAND

76. Access to modern information and communications technology is now vital for business and Scotland's geography makes the delivery of comprehensive coverage challenging. The Government therefore intervened with a programme of investment which has made broadband accessible to over 99% of households. Scotland is now one of Europe's leaders in broadband availability, placing it in a strong position to take advantage of the economic opportunities offered by modern communications technologies. The Government has allocated a further £3.5 million for a new procurement designed to make broadband available to all those individuals and businesses who do not yet have access and have notified them of a reach problem.

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