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Financing the just transition to net zero

Tackling climate crisis prioritised in future spending plans.

Net Zero Secretary Michael Matheson has pledged to maximise the use of public funding to accelerate the delivery of plans to tackle climate change.

The Resource Spending Review, published this week, commits to increased spending on heat in buildings, active travel and peatland and woodland restoration.

Capital spending on programmes will also increase by over half a billion pounds over the next three years, to speed up the reduction in greenhouse gas emissions and build climate resilience across Scotland.

The Scottish Government has also committed to increasing its efforts to leverage private sector investment in the just transition to net zero, to make better use of limited public funds.

Key commitments in the Resource Spending Review include:

  • up to £75 million per year to deliver the Heat in Building Strategy, enabling £1.8 billion investment towards targets to decarbonise over a million homes and 50,000 non-domestic buildings by 2030;
  • up to £95 million towards meeting woodland creation targets of 18,000 by 2024/25;
  • £46 million to introduce the community bus fund and an increase in funding for concessionary travel schemes as well as investing up to £150 million of resource and capital across the spending review period in active travel, as part of a shift of transport funding to walking, wheeling and cycling – supporting our commitment to cut car kilometres by 20 per cent by 2030;
  • investment of over £12 million in peatland restoration to double current restoration rate and put us on track to hit our target  of 20,000 in 2025/26;
  • £4 million of resource spending alongside £150 million capital and financial investment for the North East and Moray Just Transition Fund;
  • Rollout of the agriculture National Test Programme to enhance farmers and crofters’ awareness of their climate performance.

Net Zero Secretary Michael Matheson recently said:

“This spending review comes at a critical point in the global challenge to address the climate crisis. Tangible global action is becoming ever more urgent, and Scotland is committed to playing its part with some of the most ambitious, legally-binding targets in the world.

“That is why our future spending plans prioritise investment in the package of measures to tackle climate change and deliver a just transition - as set out in our updated Climate Change Plan.

“But, as the Finance Secretary set out earlier this week, the challenging fiscal environment in the coming years means we must redouble our focus on efficiency, structural change and collaboration.

“That is why I am committed to ensuring we maximise every penny of public investment, working collaboratively with the private sector and our communities to accelerate delivery of public policies that will reduce emissions, build resilience to the impacts which are locked in, tackle biodiversity loss and help to create a fairer, greener society.”


Read the Resource Spending Review in full here with accompanying Equalities and Fairer Scotland Statement and analysis of the RSR Framework consultation responses.

The Medium Term Financial Strategy can be read here.

The Capital Spending Review update is available here.

The Resource Spending Review covers the years 2023-24 to 2026-27. It is not a Budget and final spending plans will be presented to the Scottish Parliament in respective annual Budgets.


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