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Re-invest ScotWind windfall to improve supply chains, Government told

Money received for the leasing of the seabed should be reinvested into the supply chain (Gareth Fuller/PA)
Money received for the leasing of the seabed should be reinvested into the supply chain (Gareth Fuller/PA)

The Scottish Government should use the £700 million income from leasing sections of Scotland’s seabed to improve supply chains and support the move to net-zero, a Holyrood committee has said.

In a report on recent supply chain issues, the Economy and Fair Work Committee found both Brexit and Covid-19 had put “significant strains” on the movement of goods.

The committee said the proceeds of a project allowing companies to build wind farms off the coast of Scotland should be used to bolster supply chains against future shocks, which could also include impacts of the Russian invasion of Ukraine, the report said.

The Scottish Government has already received some £700 million as part of ScotWind, with plans for 17 developments in the coming years.

On Wednesday, documents were released showing that more than £25 billion could be paid into the Scottish supply chain to build, erect and maintain the wind farms.

Ports should be upgraded, the report said, to allow Scotland to take advantage.

In its report, the committee said: “The committee recommends that the Scottish Government works with the owners and operators of Scotland’s ports to explore the viability of upgrading them to ensure that they are ready to take advantage of the significant opportunities that the transition to a net-zero economy will offer, and leverage the £700 million in income from the ScotWind auction round to support the necessary investment.”

They added: “The committee recommends that the Scottish Government should focus the £700 million income from the ScotWind auction to support the development of supply chains in the renewable energy sector and the new technologies necessary to deliver a just transition.”

Other recommendations included calling on the Scottish Government to make HGV driving jobs more attractive to applicants, amending building regulations to allow more sustainable materials to be used and include carbon miles in criteria for future procurement, to encourage the use of locally sourced materials.

Committee convener, Claire Baker, said: “Disruption to supply chains, unforeseen or otherwise, can have a major impact and we need to ensure action is taken to create resilience and protect our economy.

“Many businesses, public bodies and consumers rely on strong supply chains. We are making recommendations to plan for a skilled workforce to meet Scotland’s needs, a robust transport network which keeps goods moving and a focus on developing and implementing local supply chains.

“The Scottish Government must show leadership in supporting the development of innovative products, including changes to building regulations if required to incentivise sustainable alternatives.

“Procurement contracts must be used to support local production and provide more opportunities to strengthen (the) supply chain.

“The committee also calls on the Scottish Government to focus the proceeds from the ScotWind auction to support the development of supply chains in the renewable energy sector and the new technologies necessary to deliver a just transition.”

A spokesman for the Scottish Government said: “The Scottish Government welcomes the committee’s recognition of the work of our Supply Chain Development Programme in helping improve capacity.

“The programme is a key part of our National Strategy for Economic Transformation to secure greater impact from public sector procurement spend worth £13 billion a year through extra support for innovation and enterprise.

“The Scottish Government is working closely with the construction industry through the Construction Leadership Forum.

“It established a short life working group chaired by business minister Ivan McKee to collaborate at pace with industry to seek to resolve global materials shortages impacting on Scotland.

“Using newly devolved powers we have ensured the ScotWind leasing round requires developers to outline supply chain commitments.

“This potentially unlocks projected investment in the Scottish supply chain worth an average of £1.5 billion across each of the 17 ScotWind offshore wind projects.”

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