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FINANCE AND SUSTAINABLE GROWTH

Portfolio Responsibilities

The Finance and Sustainable Growth portfolio is responsible for managing Scotland's budget effectively and delivering the right mix of policies to ensure increasing, sustainable growth in the Scottish economy.

It contributes substantively to our Purpose - to focus government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth - and is a critical driver of our wealthier and fairer Strategic Objective - to enable businesses and people to increase their wealth and more people to share fairly in that wealth. A fairer Scotland will in turn help reduce inequalities in areas such as educational attainment and health, helping Scotland become smarter and healthier. By investing to increase growth in Scotland's high-potential renewable energy sector, the portfolio also contributes to a greener Scotland.

The Finance and Sustainable Growth portfolio has responsibility for:

• delivering better value in the Scottish budget to ensure we get the best possible return for frontline public services and taxpayers;
• supporting public service reform to deliver better quality user-focused services and smaller, simpler and more efficient government;
• delivering and maintaining the right infrastructure for business success - through investment in transport, investment in Scottish Water and modernising the planning system;
• re-focusing the enterprise networks towards a shared goal of delivering increasing, sustainable economic growth and promoting Scotland's tourism industry;
• contributing to tackling climate change and improving energy efficiency;
• further developing an innovative, sustainable and inclusive third sector; and
• contributing to improving equality of opportunity, reducing inequalities and tackling poverty and disadvantage.

Summary of Key Spending Priorities

The Finance and Sustainable Growth portfolio will be responsible for public spending of £6.1 billion in 2009-10 (excluding local government). Chapter 9 sets out the local government responsibilities for delivering national priorities and services relevant to this portfolio through an expanding role in driving local economic development, including the business gateway and, in particular:

• continuing to freeze council tax rates at 2007-08 levels in each council, pending the abolition of council tax and the introduction of a fairer local income tax; and
• further reducing business rates for small businesses.

For 2009-10, the priorities for the Finance and Sustainable Growth portfolio are briefly described below.

Getting better value from the Scottish budget

Integral to our spending proposals is the clear commitment to manage public sector resources more effectively and efficiently. Programmes and projects within the Finance and Sustainable Growth Portfolio aimed at delivering this include:

• Efficient Government for which Finance and Sustainable Growth leads on behalf of the Scottish Government. The spending proposals set out in this document take account of a requirement for each portfolio to deliver recurrent, cash releasing improvements equivalent to at least 2% per annum; and
• establishing a National Procurement Centre of Expertise and a Central Government Centre of Procurement Expertise to lead collaborative procurement of common goods and services on behalf of the wider Scottish public sector, extending e-procurement, and continuing and accelerating Procurement Reform in Scotland.

Supporting public service reform

Closely linked to managing public sector resources more effectively and efficiently is reforming our public services as part of our Strategic Priority for achieving Effective Government. In 2009-10, the Finance and Sustainable Growth portfolio will continue to:

• lead on simplifying the public service landscape to help achieve a simpler, smaller and more efficient and effective government in Scotland; and
• develop the new relationship with local government which is supported by the Single Outcome Agreements and performance measurement framework, which have now been agreed with all local authorities and which are being delivered in association with Community Planning Partners.

Putting the right infrastructure in place

Scotland needs the right infrastructure to allow the economy to more effectively compete and succeed. This is central to the Government's Strategic Priority of infrastructure development and place. Our programmes and policies, which are designed to meet the strategic needs of Scotland's wealth creators as well as improving the quality of life of Scotland's people, include in 2009-10:

• investing £673m in rail infrastructure through Network Rail and rail services through the rail franchise, including investing in expansion and improvements to services through our major projects programme;
• delivering a motorway and trunk road network that supports the economy and the people of Scotland by enabling safe and reliable journeys (£443m, excluding capital charges and the replacement Forth crossing);
• investing £25m (of £75m over the Spending Review period) in the design and development of a replacement Forth crossing;
• providing resources of £106m to deliver high quality ferry services ;
• continuing to support lower bus fares across Scotland through the Bus Services Operators Grant (£61m);
• investing £187m in providing free travel to over one million people on the bus network, improving quality of life through greater access to vital health and community services, employment and education and leisure facilities and aiding equality of opportunity for older, disabled and young people;
• maintaining the record level of investment by Scottish Water to improve water quality and ensure connections to the public networks necessary for new developments throughout Scotland; and
• completing the e-enablement of Scotland's planning system with benefits for all users of the system - and put in place a programme to support planning modernisation.

Refocusing the enterprise network and promoting Scotland's tourism industry

As the principal vehicle for enterprise development in Scotland, the enterprise networks play a crucial role in generating new investment and innovation in Scottish businesses as part of our Strategic Priority of creating a supportive business environment. We have already acted to re-invigorate the enterprise networks - re-focusing them towards a shared goal of delivering increased and sustainable economic growth. As part of the reforms, arrangements are in hand to transfer responsibility for managing the Business Gateway contracts and for local regeneration activity to local government. Similarly, responsibility for national training and skills programmes is to be moved to Skills Development Scotland. Tourism is included within the Finance and Sustainable Growth Portfolio - alongside enterprise and infrastructure - so that policy as a whole can reflect the needs and interests of the tourism industry. Our programmes and policies, which are designed to re-focus the enterprise networks and promote our tourism industry, include:

• grant funding of £434m to Scottish Enterprise, which will concentrate on supporting innovation and investment in regionally and nationally significant and high potential companies and key sectors (including through providing risk capital), in major economic development projects to ensure Scotland is an attractive place to locate, and to increase trade internationally;
• innovation and investment funding of £60m through Regional Selective Assistance ( RSA), SMART:Scotland and other direct government innovation support; £52m for RSA and SMART:Scotland to be delivered within Scottish Enterprise as a joint venture with the Scottish Government;
• Highlands and Islands Enterprise funding of £89m on supporting innovation and investment in significant and high potential companies, and key sectors, ensuring Highlands and Islands is an attractive place to locate businesses, and in strengthening communities; and
• £47m funding for VisitScotland which triggers another £25m of funding from private sector and local authorities. There is also a £2m a year addition to the £25m marketing budget to meet the costs associated with making a success of bringing the Ryder Cup to Scotland in 2014.

Contributing to tackling climate change and improving energy efficiency

Our Purpose focuses on increasing sustainable economic growth - economic growth which is not at the expense of future generations. To help facilitate this we have ensured that responsibility for tackling climate change and energy efficiency lies within the same portfolio as economic growth, transport and planning - reinforced by strong linkages to other portfolios. The programmes and policies within the Finance and Sustainable Growth portfolio which contribute to tackling climate change and improving energy efficiency include:

• putting in place a statutory framework through the introduction of a Scottish Climate Change Bill setting a long term target to cut emissions by 80% by 2050; more immediately, reducing emissions in the period to 2011 in line with the pathway towards the longer term target; and preparing a programme of actions across all portfolios to deliver both targets ²;
• supporting the European Commission to ensure that the EU carbon price continues to be the primary instrument to deliver climate change emission reduction objectives. The EU Emissions Trading Scheme is the central plank of our policy, reducing emissions at least cost;
• implementing the Carbon Reduction Commitment; and
• spending £33m on energy and climate change to provide support for renewable energy, energy efficiency and climate change.

Developing an innovative, sustainable and inclusive third sector

The third sector also has an important part to play in securing sustainable economic growth. We seek to secure the development of an innovative, sustainable and inclusive third sector, supporting communities to be more cohesive and contributing to high quality public services and raised economic growth. Our programmes and policies include:

• supporting an enterprising third sector with a development programme of £22m and the Scottish Investment Fund of £10m to encourage greater investment in assets, business development and the skills of people working in the sector; and
• developing strategic partnerships with key national and regional intermediaries to ensure effective infrastructure for the third sector.

Modernising the Scottish Planning System

We are undertaking a major programme of modernising the Scottish planning system, following the passage of the Planning etc (Scotland) Act 2006. A modern planning system will increase the rate of sustainable economic growth through legislation, policies, actions and decisions on architecture and place making, building standards and planning, which should, in addition, result in the construction of well designed spaces and buildings that are safe, healthy, efficient and sustainable.

Conducting the Census in 2011

The planning, development and implementation of Scotland's Census is a major undertaking and additional funding is provided in this budget for the General Register Office of Scotland to undertake the next Census in 2011, and make appropriate preparations in the preceding years, in parallel with the Censuses in other parts of the UK. GROS, in partnership with the Equality Unit and the Office of the Chief Statistician, has developed a new, modernised ethnicity classification for use in the 2011 Census, if agreed by Parliament, and in all SG statistical collections. The new classification will more accurately reflect Scotland's changing demographic and will contribute to a Wealthier and Fairer Scotland and a Healthier Scotland by ensuring that discrimination based on ethnicity can be monitored and addressed and that services can be appropriately resourced and targeted.

Spending Plans for 2009-10 are set out below.

Table 2.01: Detailed Spending Plans (Level 2).

Table 2.02: Detailed spending Plans (Level 2 real terms) at 2008-09 prices.

Budget changes

Our spending plans include the following changes made since the publication of Draft Budget 2008-09:

Scottish Public Pensions Agency

Following the most recent actuarial estimates of expenditure on the Teachers and NHS Scotland pension schemes, the funding requirement shows a net reduction of £5.4m per annum.

Committees, Commissions and Other Expenditure

Net Decrease of £18.2/16.4/16.6m due to transfers of responsibility to other portfolios and additional income in 2008-09 (£4.3m) from the repayment of public dividend capital by Registers of Scotland, as announced at Stage 3 of the Budget Bill in February 2008.

Motorways and Trunk Roads

Decrease of £3.0/0/0m in line with Budget Act 2008 amendments.

Ferry Services in Scotland

Decrease of £1.0m in 2008-09 due to switch to Bus Services in Scotland, and increase of £1.3/1.3m in 2009-10 and 2010-11 for increased cost of capital charges.

Air Services in Scotland

Increase of £0.0/3.0/3.0m for increased cost of capital charges.

Bus Services in Scotland

Increase of £4.0/4.0/4.0m as announced at Stage 3 of the Budget Bill.

Other Transport Directorate Programmes

Decrease of £3.0/4.3/4.3m due to transfer to Bus Services in Scotland (£3.0/0.0/0.0m); and cost of capital savings (£0.0/4.3/4.3m) transferred to Ferry Services and Air Services.

Planning

Increase of £0.1/0.4/0.5m due to transfers of responsibility involving First Minister's portfolio and former Scottish Building Standards Agency.

Enterprise, Energy and Tourism

Decrease of £161.5/157.8/151.4m due to transfer of training and skills funding to Education and Lifelong Learning for Skills Development Scotland.

Water

Increase of £20/40/60m due to update of cost of capital charges, as reflected in Budget Act 2008.

Scottish Public Pensions Agency

Table 2.03: More detailed spending plans (Level 3).

What the budget does

The Scottish Public Pensions Agency's ( SPPA) principal role is to administer the pensions, premature retirement and injury benefits schemes for employees of the National Health Service in Scotland and for members of the Scottish Teachers' Pension Scheme.

The Agency also has responsibility for developing the regulations covering the National Health Service in Scotland Pension Scheme, Scottish Teachers' Pension Scheme, Local Government, Police and Fire pensions schemes in Scotland; for determining appeals made by members of these schemes; and for providing a pension calculation service for the Scottish Parliamentary Pension Scheme and the Legal Aid Board for Scotland. This budget allows the Agency to manage anticipated caseload increases of up to 20% by 2010-11 and to continue to improve the range, quality and efficiency of its customer services.

The pension scheme funding represents the cost of pensions accrued in that year plus notional interest on current liabilities less income received. It is classified as Annually Managed Expenditure ( AME), funded separately by Treasury from the Departmental Expenditure Limit ( DEL) settlement and, as such, variations in the scheme expenditure do not have to be balanced by adjustments elsewhere in the Scottish Budget.

Budget changes

Following the most recent actuarial estimates of expenditure, the funding requirement for the Scottish Teachers Pension Scheme has increased by £34.6m a year and that for the NHS in Scotland Pension Scheme has decreased by £40m, a total net reduction of £5.4m a year.

Committees, Commissions and Other Expenditure

Table 2.04: More detailed spending plans (Level 3).

What the budget does

The Public Service Reform and Efficiency budget provides support for a range of public service reform programmes. The Efficiency and Reform programmes aim to accelerate significant strategic programmes of work to drive efficiencies, reform and productivity in public services in Scotland. The aim is Scotland-wide solutions for smaller simpler Government and improved services to customers. This budget also includes funding for shared services and asset management and other work on efficiency and reform. It includes in 2010-11 a provision of £20m for preparatory and set-up arrangements in connection with the introduction of a local income tax.

The Commissions budget now covers only the Standards Commission following the transfer of the Local Government Boundary Commission to the First Minister's portfolio.

Budget changes

Decrease of £0.3/0.4/0.4m due to transfer of Local Government Boundary Commission to First Minister's portfolio.

Decrease of £13.6/16.0/16.2m due to transfer of Procurement budget to Administration.

Decrease of £4.3/0/0m due to income from repayment of public dividend capital by Registers of Scotland to Scottish Ministers.

Rail Services in Scotland

Table 2.05: More detailed spending plans (Level 3).

What the budget does

The budget supports the delivery of ScotRail passenger rail services in Scotland and required rail infrastructure. The rail infrastructure costs relating to rail services are set by the Rail Regulator.

Concessionary Fares

Table 2.06: More detailed spending plans (Level 3).

What the budget does

The budget provides support for the development and delivery of concessionary travel schemes for older, disabled and young people. The funding provides for bus infrastructure systems to recognise Smartcards. Access to national concessionary travel will be through Smartcards issued as part of the Scottish Citizen's National Entitlement Card project.

Other Transport Agency Programmes

Table 2.07: More detailed spending plans (Level 3).

What the budget does

The Transport Information budget funds the provision of impartial travel information services such as Traveline and Transport Direct.

The Agency Administration budget funds the running costs of Transport Scotland, an Agency established to support the delivery of the Scottish Government's £2 billion annual investment in maintaining and improving rail and road networks and concessionary travel schemes in Scotland.

The Strategic Transport Projects Review is the multi-modal assessment of investment needed in land based transport infrastructure from 2012 to 2022. Arrangements for the detailed design and development of the preferred options are currently being considered.

Funding is provided for the Major Public Transport Projects, to proceed with the delivery of major rail public transport projects ( e.g. Airdrie - Bathgate, Borders Railway and Glasgow Airport Rail Link) and contribute to the City of Edinburgh Council's tram project.

Motorways and Trunk Roads

Table 2.08: More detailed spending plans (Level 3).

What the budget does

The budget will allow further progress to be made on the maintenance and enhancement of the trunk road infrastructure. Major influences on spending are the need to maintain the network in good condition and deliver improvements to safety and traffic flows. It will secure value for money in the delivery of routine, cyclical and winter maintenance to maintain the safety, environment and amenity of the trunk road network, and improve the operation of the trunk road network and the provision of information for road travellers.

The budget will reduce serious and fatal accidents through delivery of road safety improvement programmes and reduce pollution and improve air quality by removing traffic congestion through more efficient traffic movement.

It will allow work to continue on the completion of the Central Scotland Motorway Network (M8, M80 and M74), A90 Aberdeen Western Peripheral Route and improvement schemes on A68, A75, A77, A9 and A96. It will allow continuing expenditure on A876 Kincardine Bridge, A75 (3 schemes) and A830 Arisaig - Loch nan Uamh. It will build and enhance transport services infrastructure and networks to maximise their efficiency; and support the continuing maintenance for two inherited Design, Build, Finance, Operate ( DBFO) contracts with 30 km of new motorway constructed on the A74 (M) and 15 km on the M77 south of Glasgow. It will allow preparation work on the Forth crossing to continue.

Budget changes

Decrease of £3.0/0.0/0.0m in line with amendments to the Budget Bill at Stage 3 in February 2008.

Ferry Services in Scotland

Table 2.09: More detailed spending plans (Level 3)

What the budget does

The Ferry Services budget covers the subsidy paid for the lifeline ferry services on the Clyde and to the Hebridean and Northern Isles. It also covers the support for the Northern Isles freight service and, from 2009-10, for a ferry service between Campbeltown and Ballycastle.

The vessels and piers budget will allow a major new vessel to be ordered to serve on the routes between the Scottish mainland and Islay and will provide support for piers and harbours projects at Largs, Kennacraig and Port Ellen.

The budget for Road Equivalent Tariff will fund the pilot of this approach to ferry fare setting.

Budget changes

Decrease of £1.0m in 2008-09 due to transfer to Bus Services in Scotland.

Increase of £0.0/1.3/1.3m for increased cost of capital charges met from capital charge savings in Other Transport Directorate Programmes.

Air Services in Scotland

Table 2.10: More detailed spending plans (Level 3).

What the budget does

The budget supports Highland and Islands Airports Limited which operates 10 airports in the Highland and Islands, and Dundee Airport. It will sustain the continued operation of airport services throughout the Highlands and Islands, thereby supporting the economic and social development of remote and island communities.

Resources will be available for residual expenditure on the previous Air Route Development Fund. The budget also supports the Air Discount Scheme, providing discounted fares on eligible routes to people whose main residence is in Orkney, Shetland, the Western Isles, Islay and Jura, Caithness and North-West Sutherland. Eligible persons qualify for a discount of 40% of the core fares on scheduled air services between airports within the eligible areas and Glasgow, Edinburgh, Aberdeen and Inverness. In addition, the budget supports lifeline air services between Glasgow and Barra, Campbeltown and Tiree, which cannot be provided commercially.

Budget changes

Increase of £0.0/3.0/3.0m for increased cost of capital charges met from capital charge savings in Other Transport Directorate Programmes.

Bus Services in Scotland

Table 2.11: More detailed spending plans (Level 3).

What the budget does

Bus Service Operators Grant provides support to the bus industry across Scotland by refunding part of the costs of Fuel Duty which would otherwise result in increased fares. It helps sustain the economy, encourages the use of bus rather than car thereby reducing the environmental impact of increased travel and reduces the cost to local authorities of supporting non-commercial socially necessary services. Discussions are continuing with the bus industry over the possibility of moving towards a scheme that recognises operators' investment in modern buses (both to reduce environmental impacts and to improve access, including access for disabled people).

Budget changes

Increase of £4.0/4.0/4.0m as announced at Stage 3 of the Budget Bill in February 2008.

Other Transport Directorate Programmes

Table 2.12: More detailed spending plans (Level 3).

What the budget does

The Forth and Tay Road Bridge Authorities budget is to fund the activities of the two Boards following the abolition of bridge tolls in Scotland.

The budget to support the freight industry will fund grants designed to encourage the transport of freight by rail or water rather than road, and allow further progress in delivering the Freight Action Plan.

The grant to British Waterways Scotland will allow it to maintain Scotland's canals in good condition and contribute to the process of economic regeneration.

The budget for Sustainable and Active Travel promotes alternatives to car use, more efficient use of vehicles, and more active forms of travel, particularly cycling and walking, by supporting projects which raise awareness or facilitate sustainable travel choices.

The budget for Transport Strategy and Innovation provides running cost support for regional transport partnerships, the Mobility and Access Committee for Scotland ( MACS) and the Public Transport Users Committee ( PTUC).

The budget funds our strategy policies on road safety, including the development of a 10-year road safety strategy.

Budget changes

Decrease of £3.0/4.3/4.3m due to transfer to Bus Services in Scotland (3.0/0.0/0.0); and cost of capital savings (£0.0/4.3/4.3) transferred to Ferry Services in Scotland and Air Services in Scotland.

European Social Fund - 2007-13 Programmes

Table 2.13: More detailed spending plans (Level 3).

European Regional Development Fund - 2007-13 Programmes

Table 2.14: More detailed spending plans (Level 3).

*These figures net to zero because of matching receipts from the European Union.

What the budget does

We have responsibility for implementing the 2007-13 European Structural Funds programmes in Scotland, principally through the European Regional Development Fund and the European Social Fund, as well as other cross-border and transitional programmes. In 2009-10 the amounts relate to the 2007-13 Programmes and are based on the estimated spend likely to be required. European Structural Funds contribute to the improvement in Scotland's economic competitiveness through support for business research and innovation, skills improvement and the promotion of lifelong learning across a wide range of sectors - in other words, underpinning a number of our Strategic Priorities in delivery of the Purpose. The 2007-13 programmes are administered by two intermediate administrative bodies under three-year contracts to the Scottish Government. The 2000 - 2006 Programmes end on 31 December 2008.

Planning

Table 2.15: More detailed spending plans (Level 3)

What the budget does

Key elements of the planning modernisation programme include: the conclusion of the e-planning project, which will transform access to the planning system and secure substantial savings for users of the system; start-up support for the new Strategic Development Planning Authorities; support for community engagement, principally through funding to Planning Aid for Scotland; and the Planning Development Programme which is designed to ensure the planning services has the skills and competences required to make the system work effectively.

Building Standards Division is responsible for securing the health, safety, welfare and convenience of people in and around buildings; furthering the conservation of fuel and power; and furthering the achievement of sustainable development.

Architecture and Place Division provides funding support for the Access to Architecture campaign delivered by the Lighthouse as well as supporting Architecture and Design Scotland posts for housing and public sector development; extension of Sustainable Programme on sustainability, supporting the 'greener' objectives of government; development of further housing fairs; continued support for design awards; developing educational material for schools through Building Up Connections; further development of school building design work; and the international promotion of Scottish architecture.

The Directorate for Planning and Environmental Appeals, formerly the Inquiry Reporters Unit, handles planning appeals made against the refusal of planning permission by planning authorities, objections to local development plans and to orders promoted for the provision of transport and other infrastructure and other casework mainly concerning the control of pollution and environmental protection.

Budget changes

Net decrease of £0.1/0.4/0.5m in 2009-10 and 2010-11 due to transfers of £1.9/1.8/1.8m from First Minister's Portfolio for Architecture and Place and £2.0/2.2/2.3m to Administration budget from Building Standards for running costs of former agency staff now transferred to core Scottish Government.

Enterprise, Energy and Tourism

Table 2.16: More detailed spending plans (Level 3).

What the budget does

The proposed allocations for Scottish Enterprise (£303.2/291.7/295.1m) and Highlands and Islands Enterprise (£75.7/73.1/73.2m) reflect the much tighter operational focus as a result of the reforms announced on 26 September 2007; the impact of this tighter focus will be visible in the Budget as reduced running and salary costs over the period. The proposed allocations also include a cut compared to previous years in direct capital funding in line with Scottish Enterprise and Highlands and Islands Enterprise's increasing ability to fund capital projects through receipts from asset sales and collaboration with the private sector. The budgets in respect of Scottish Enterprise and Highlands & Islands Enterprise also reflect a transfer of training and skills funding to Skills Development Scotland as a result of the transfer of responsibility for this activity. The figures will subsequently be adjusted further by transfer to local government. This will happen once arrangements are finalised for the transfer of responsibility for the Business Gateway contracts and agreement has been reached on the transfer of local regeneration activity.

The Innovation and Investment Grants budget includes the SMART: SCOTLAND programme which is the foremost policy instrument to support near-market research and development projects by small and medium enterprises. Regional Selective Assistance, which is the main national scheme of financial assistance to industry, helps create and safeguard jobs in selected areas of Scotland and accounts for the bulk of this spend. The budget covers commitments made in previous years which are paid in instalments as projects reach milestones. Both grants will, at a date to be agreed, be delivered by Scottish Enterprise under joint venture arrangements with the Government.

The Energy and Telecommunications budget provides advice to householders and businesses on energy efficiency and micro-generation with the objective of reduced energy consumption and carbon savings. This budget also provides grant support for development and deployment of renewable technologies (marine, biomass and hydrogen) and for the adoption of microgeneration technologies by householders and communities. This has the joint objectives of carbon reduction and the promotion of economic growth. There is also provision for introducing Energy Efficiency Design Awards.

The Energy and Telecommunications budget also includes our contribution to the costs of the UK Committee on Climate Change. This expert advisory committee will advise all UK administrations in relation to statutory emissions reduction targets. It includes research into how best to reduce emissions to help us on the path to a low carbon economy, and to adapt to climate change.

The Business Growth & Innovation budget funds a range of innovation activities and provides funding for the Scottish Government Expertise, Knowledge and Innovation Transfer and Knowledge Transfer partnerships programmes plus the Innovators Counselling and Advisory Service for Scotland scheme and the Intellectual Asset Centre. It also supports ad-hoc innovation policy activities carried out under the 1965 Science and Technology Act. Also included in the Business Growth & Innovation budget are the budgets for the Saltire and Horizon prizes.

The VisitScotland budget (£47.8/46.8/46.8m) spends £25m per annum on marketing which directly drives additional tourism revenues of £975m, plus business tourism and e-business benefits. The remainder of the VisitScotland budget is used to fund EventScotland activities, including promotion of the Ryder Cup; to provide information to visitors once they are in Scotland (through over 100 Tourism Information Centres); and to help 20,000 Scottish tourism businesses. Total tourism revenues are worth £4.2 billion a year to the Scottish economy.

The budget for Scottish Development International will be applied in assisting local companies expand their businesses internationally. It will also be used to attract further foreign investment as well as providing support for international companies already based in Scotland through its inward investor support activities including PR, investment and specialised training advice.

Budget changes

Decrease of £161.5/157.8/151.4m due to transfer of training and skills funding to Education and Lifelong Learning for Skills Development Scotland.

Water

Table 2.17: More detailed spending plans (Level 3).

What the budget does

The support for the Scottish Water borrowing budget covers the sums to be lent to Scottish Water by Scottish Ministers in support of its capital investment programme. The investment programme for 2009-10 will deliver significant improvements to drinking water quality and the environment.

The borrowing requirements of Scottish Water are determined by the Water Industry Commission, Scottish Water's economic regulator. The borrowing is set at levels which require Scottish Water to deliver services and the investment programme at the lowest overall reasonable cost. Whilst "flat spend" is shown, some variations between one year and the next will occur and will reflect annual variances in the delivery of the capital programme.

The cost of capital charges were recently changed to a full weighted cost of capital calculation, in line with UK-wide practice.

Budget changes

Increase of £20/40/60m for cost of capital charges, based on the most recent assessment using the updated formula. 2008-09 update is already reflected in the Budget Act 2008. Additional budget cover has been provided by the UK Treasury, so these increases do not require offsetting adjustments to other areas of the Scottish Budget.

Third Sector

Table 2.18: More detailed spending plans (Level 3).

What the budget does

The Third Sector budget seeks to secure the development of an innovative, sustainable and inclusive third sector, supporting communities to be more cohesive and contributing to high quality public services and raised economic growth. The Scottish Investment Fund supports enterprise in the third sector by investing in assets, business development and the skills of people working in the sector. The budget also supports volunteering and a series of strategic partnerships with national third sector organisations aimed at building third sector capacity.

Central Government Grants to Local Authorities

Table 2.19: More detailed spending plans (Level 3).

What the budget does

Following the Concordat agreement between the Scottish Government and local authorities, most of the previous budget for ring-fenced grant was added to the budget for general support to local authorities. This table shows the two remaining areas where there are ring-fenced grants to local authorities (or similar bodies) for transport purposes.

General Register Office for Scotland

Table 2.20: More detailed spending plans (Level 3).

What the budget does

The budget largely funds the ongoing statutory functions of the Registrar General, which are to conduct 10-yearly Censuses and prepare and publish demographic and other statistics; to administer civil registration of vital events - births and deaths, plus marriages, civil partnerships, divorces and adoptions - and the statutes relating to these; to maintain the national Health Service Central Register of patients in Scotland for the Scottish Government; and to make available public records about individuals to customers ( e.g. genealogists) and operate the new joined-up ScotlandsPeople Service with our partners, the National Archives of Scotland and the Court of the Lord Lyon.

The budget increases from 2008-09 onwards provide the Registrar General with the funds necessary to plan, develop and undertake a national Census in 2011, in parallel with other Censuses in the other parts of the UK.

REGISTERS OF SCOTLAND

What the budget does

Registers of Scotland (RoS) is a Trading Fund and is self-financing from fees (so does not receive direct funding from government). RoS maintains and supplies information from a range of public registers. The main two registers, the Land Register and the General Register of Sasines, are concerned with the ownership of land and property. These public registers play a key role in underpinning the economic and social stability of Scotland. RoS' purpose is to record and safeguard rights, providing the people and institutions of Scotland with the social and economic benefits that flow from a publicly guaranteed system of rights in land and property.

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