Following the Money (Part 4) – entering a new dimension

Following the Money explores how the public funds spent each year to support rural land management in Scotland influence our unfolding biodiversity crisis; this new post in the series brings the story up to date. Previous posts established that there’s an annual spend of around £1 billion, a large part of which (roughly £600m) is channelled directly to Scotland’s farmers. This total has not changed very much over recent years, while rising costs have eroded its spending power by around a quarter.

The first post1 set the scene, noting international ambition to reverse our failure to make space for Nature and associated commitments, dating from 2011, to “substantially increase” financial resource allocations. Rural land management is one of the largest impacts on our wild plants and animals. In Scotland, enumerating the relevant allocations is not easy, due to the confused landscape of public bodies, diverse definitions and forms of publication. But we can be thankful that the regular publication of Scottish public body budgets provides a degree of transparency with some indication of trends over time.

The second post2 brought together the various relevant numbers to make an assessment of how effort has changed over two decades, showing how the funds provided are dominated by the direct farm payments framed by the EU Common Agricultural Policy (CAP). Post-Brexit, of course, these are being replaced, although in Scotland this is not scheduled to begin until 2025 3. By that time, the CAP-derived Basic Payment to farmers, with its associated shortcomings, will have been rolled forward for nearly a decade.

The most recent post 4 in the summer of 2022 reviewed the Scottish Government’s five year plans in the light of a rapid increase in price inflation; a further large erosion of spending power became inevitable. The mismatch of rhetoric and reality is more apparent than ever. During 2023, an extensive consultation process has explored how the UN Global Biodiversity Framework, setting 23 targets for 2030, will be implemented in Scotland5. A new Biodiversity Strategy sets “a clear ambition for Scotland to be Nature Positive by 2030, and to have restored and regenerated biodiversity across the country by 2045“, through “transformative change“. An initial five-year Delivery Plan sets out numerous actions, and a Natural Environment Bill is proposed to establish statutory targets bearing on public bodies. But there’s a lack of clarity on where the increased resources to bring all this about will be found.

A second extensive consultation process is ongoing, helping to design the new farm support measures. Late in 2023, a new Agriculture and Rural Communities Bill began its progress through Parliament6 . The core of the new measures as proposed look remarkably similar to the previous arrangements; this isn’t entirely surprising, since there’s an ambition to track the continuing CAP measures. However, this also implies an absence of the ‘transformative change’ sought by the Biodiversity Strategy…. There’s a steady undercurrent of comment about all this7, but persistent confusion of the arrangements for Scotland with those for England (or England and Wales).

The draft Scottish Budget for 2024-25, published in December 2023, details proposed allocations of Scottish Government funding broadly matching those set out in the five-year outlook published in 2022. There have been a few changes in the configuration of portfolios within which the relevant expenditure is brigaded8, and in recent years some expenditure has been reclassified as capital rather than recurrent. For 2024/25, this has led to a £30m budget cut in woodland planting grants from £57m to £27m due to general restrictions on capital spend9. However, overall the total allocations relevant to rural land management are largely unchanged; certainly no ‘transformation’ of resource availability is evident.

Stepping back from the detail of these developments, it’s worth reflecting on how around the £1 billion is spent in Scotland every year. First, remember that every penny is (eventually) paid to a human being – most often directly to an individual farmer or crofter, or an employee of one of the relevant public bodies, but sometimes at the end of a very lengthy supply chain (for example the grower of trees planted as part of a woodland establishment project, or even to pay for the production of fuel or manufacture of tyres on a vehicle used by an on-farm adviser helping to deliver biodiversity targets). So, as I have commented previously, none of these funds directly buys a squirrel, an orchid or a brood of hen harriers. But we can be confident that £1 billion spent each year has a pretty big impact on Scotland’s natural animals and plants, even although it can be hard to pin down exactly where the money goes or what it ‘buys’ in terms of biodiversity outcomes.

The UN ‘Aichi’ biodiversity targets for the decade to 202010 included the ambition to increase expenditure, accepted by the UK and reported as indicator E2. During 2022, I corresponded with the Defra team managing these targets, who were able to give me a breakdown of the Scottish component within the published UK totals covering two decades from 2000 to 2020. This shows that the estimate grew to around £60m per annum in 2007/8 (before the Aichi target was adopted), then declined to around £30m in 2012/13 before climbing back to around £60m in 2019/2011. This is a very conservative estimate of biodiversity expenditure in Scotland (and don’t forget that the scope of ‘biodiversity expenditure’ goes well beyond rural land management). It excludes, for example, the £142m annual ‘greening payments’ to Scottish farmers, on the grounds that it isn’t clear what this is buying. But we can be certain that quite a lot of the annual £1bn total has a much bigger effect, both positive and negative, than the £60m reported.

New global targets for 203012 include Target 19 “Substantially and progressively increase the level of financial resources from all sources, in an effective, timely and easily accessible manner, including domestic, international, public and private resources, in accordance with Article 20 of the Convention, to implement national biodiversity strategies and action plans, by 2030 mobilizing at least 200 billion United States dollars per year“. It is not yet clear how this may be translated into a UK, or Scottish, contribution however the target reinforces the notion of a ‘transformative’ change of pace.

Scottish government is well aware that taxpayer funds on their own are not going to bring about the ‘transformation’ required. The Biodiversity Strategy, for example, proposes to harness the resources of the private sector – individual owners and commercial organisations – to bridge the gap. This is a radical change of outlook compared to before. Throughout my career, debate focused almost entirely on the availability and use of public funds plus, to a lesser extent, the resources of non-governmental charitable organisations (NGOs)13The latest UK biodiversity target report estimates total annual NGO spend of around £300m, on top of UK public funding a little above £700m so these resources, too, are not ‘transformative’.

The idea of harnessing private sector investment is both novel and controversial. The idea of ‘green lairds’ has become the subject of debate in Scotland14. While the primary focus of these is on sequestration of carbon, tackling the climate and biodiversity crises is closely linked. A report published in 2021 estimated a UK funding shortfall for Nature of £20bn15, however this estimate has been subject to close scrutiny16. Scottish government has defended its promotion of privately funded solutions, proposing guidelines17.

So, in conclusion, the availability of public money remains extremely tight with no sign of any ‘transformative’ change in the years ahead unless, somehow, a way can be found for private funds to bridge the gap. The stage is set for a lively debate on how best to take this forward.

  1. See: Following the Money (Part 1) – Constructive Tension (mowle.net)
  2. See: Following the Money (Part 2) – Constructive Tension (mowle.net)
  3. SG plan to bring changes in between 2025 and 2027 – see: Agricultural Reform Route Map (ruralpayments.org)
  4. See: Following the Money – a view out to 2027 – Constructive Tension (mowle.net)
  5. See: Tackling the Nature Emergency – strategic framework for biodiversity: consultation – gov.scot (www.gov.scot) .
  6. See: Agriculture and Rural Communities Bill – gov.scot (www.gov.scot) 
  7. See for example: UK farmers say tighter environmental rules put them at risk of being undercut | Farming | The Guardian when the rules proposed are those for England.
  8. The two most relevant portfolios are currently titled ‘Transport, Net Zero & Just Transition‘ (previously ‘Net Zero, Energy and Transport’ ) and ‘Rural Affairs, Land Reform & Islands‘ (previously ‘Rural Affairs and Islands’) at ‘Level One. The detail we are looking for is set out mostly in Level Three tables. To take two examples, Forestry has been moved from the Net Zero to Rural Affairs, while support for peatland restoration has been taken out from within ‘Environmental Services’ (Level Two within Net Zero) to form a new Level Two ‘Natural Resources and Peatland’ line within Rural Affairs. However, careful scrutiny of the published Level Three tables allows these, and other, changes to be tracked from year to year.
  9. There’s an attempt by SG to explain and justify this (temporary?) cut here: https://forestry.gov.scot/news-releases/19th-dec-2023-budget-woodland-creation .
  10. Known as the Aichi targets after the Japanese location in which they were agreed. Their implementation in the UK is documented here: https://jncc.gov.uk/our-work/uk-biodiversity-indicators-2023/ .
  11. The most recent UK figures for 2021/22 claim a real terms increase of 21% over the last 5 years; it isn’t clear to what extent this is reflected within Scotland, however the total calculated this way will not exceed £100m.
  12. See: 2030 Targets (with Guidance Notes) (cbd.int)
  13. The most recent 2023 update is at: UKBI – E2. Biodiversity expenditure | JNCC – Adviser to Government on Nature Conservation
  14. Especially here: The Cheviot, the Stag and the Black Black Carbon – Community Land Scotland and here: Why Scotland should Stop Selling Carbon – Land Matters (andywightman.scot)
  15. See: Finance Gap for UK Nature Report (greenfinanceinstitute.com)
  16. For example: Is the finance gap for nature really £20bn? | Future Economy Scotland
  17. See: Interim Principles for Responsible Investment in Natural Capital – gov.scot (www.gov.scot)

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