:00:03. > :00:13.be made over the table and publicly. But we do not want to see
:00:13. > :00:20.
:00:20. > :00:25.Tonight, Argyll and Bute Council backed down on their threat to
:00:25. > :00:29.close rural schools but have they been subjected to intolerable
:00:29. > :00:34.pressure from the government. I will ask Education Secretary Mike
:00:34. > :00:39.Russell. And Norway has managed to say
:00:39. > :00:49.�70,000 for every man, woman and child in the country. Should
:00:49. > :00:49.
:00:49. > :00:53.Scotland have its own funds? The issue of school closures has
:00:53. > :01:03.provoked a row of between the government and Argyll and Bute
:01:03. > :01:05.
:01:05. > :01:11.Council over who should decide. A relief for these parents. For
:01:11. > :01:15.almost one year, the axe has been hovering over 11 primary schools in
:01:15. > :01:21.Argyll and Bute. They thought the council would say it is still
:01:21. > :01:26.pushing ahead but instead... Today we have decided to call a
:01:26. > :01:31.halt to the process and that is the end of the matter for us as a -- as
:01:31. > :01:36.a council. Two weeks ago, Education Secretary
:01:36. > :01:42.Mike Russell wrote to all of Scotland's councils requesting a
:01:42. > :01:47.delay for a one year or any plans to close rural schools. Argyll and
:01:47. > :01:50.Bute Council insist this is not a moratorium. They say they are
:01:50. > :02:00.stopping the consultation in light of comments made by the Education
:02:00. > :02:06.
:02:06. > :02:10.It would have been an appropriate for this Council to continue with
:02:10. > :02:14.the consultation process in the knowledge and advice that the
:02:14. > :02:19.legislation is defective. The consultation stop today with
:02:19. > :02:22.immediate effect. It is unlikely there would be a fresh consultation
:02:22. > :02:27.process in the life of this council and we will wait for new
:02:27. > :02:31.legislation or guidance to take us through this difficult process.
:02:31. > :02:36.This village has its own schools. It was one primary school
:02:36. > :02:43.campaigners fought to save. Today they are declaring victory.
:02:43. > :02:47.Delighted with the news. This school has been here since 1721 and
:02:47. > :02:57.my grandchildren are there, the 5th generation of my family to attend.
:02:57. > :03:01.I am delighted. It is not the first time I have
:03:01. > :03:05.heard the word fight. They have saved their own skin, and they look
:03:05. > :03:09.like they have taken the right decision for the right reasons but
:03:09. > :03:15.we are aware there will be council elections next May and everyone is
:03:15. > :03:19.looking forward to that. The 20 pupils at this primary
:03:19. > :03:24.school have been very involved with the campaign. Here they are to take
:03:24. > :03:29.- by getting their photo taken for the local primary schools. There
:03:29. > :03:39.had been great uncertainty about at this school would be open last
:03:39. > :03:39.
:03:39. > :03:44.December. I am happy. There is no more stress
:03:44. > :03:49.about it and I am quite happy the school is staying open. Tell me why
:03:49. > :03:56.you like your school? There are no police and it is a small school.
:03:56. > :04:03.That is what I like about it. All of these schools except for two,
:04:03. > :04:13.which had no pupils, are safe for now. But Argyll and Bute Council
:04:13. > :04:29.
:04:29. > :04:33.has not made a U-turn according to The situation has calmed down and
:04:33. > :04:37.the rural schools issue in Argyll and Bute will drift away until
:04:37. > :04:42.after the council elections. But cuts are still to be made and did
:04:42. > :04:46.it is not schools, inevitably it will be something else.
:04:46. > :04:51.Before we came on air I spoke to the Education Secretary Mike
:04:51. > :04:58.Russell. I began by asking him what he meant by his comments that the
:04:58. > :05:03.current legislation was not working. I mean what COSLA have meant and
:05:03. > :05:07.parents and most commentators. We have a piece of legislation that
:05:07. > :05:12.was passed unanimously believing it would lead to a level playing field
:05:12. > :05:18.in terms of the issues that arise in a rural school closer. This has
:05:18. > :05:24.been sought for a long time and I was involved in this process in
:05:24. > :05:29.20021001. Regrettably, we have found there are still disputes in
:05:29. > :05:32.the quality of information, the way information is presented and rather
:05:32. > :05:38.than creating a level of understanding, the difficulties
:05:38. > :05:44.have continued to be very great, in many cases. This has resulted in a
:05:44. > :05:52.far more schools being called in than expected. 35 cases in the last
:05:52. > :05:56.year. 17 I called in due to doubts about the process. It seemed to me
:05:56. > :06:01.that we had not answered the main questions - COSLA and local
:06:01. > :06:08.authorities were saying this as well. It seemed best to step back
:06:08. > :06:13.and ask what is the problem? I made a manifesto commitment to do that.
:06:13. > :06:19.But to do more - let us understand more closely the relationship
:06:19. > :06:26.between rural schools, the rural community and rural growth. It
:06:26. > :06:31.seemed to be better to do that in a backdrop of people working together.
:06:31. > :06:38.Argyll and Bute Council are making the point forcefully today that,
:06:38. > :06:43.because they felt they had no choice but to do this, they still
:06:43. > :06:46.are facing problems with too many schools and too few people in them,
:06:46. > :06:51.and in their today do not have the money to pay for that.
:06:51. > :06:56.There are a number of issues wrapped up in that. The present
:06:56. > :07:02.legislation says that the basis of closer is not money but educational
:07:02. > :07:11.benefit. Any local authority that says they cannot afford to run
:07:11. > :07:14.these schools is actually running against the current legislation.
:07:14. > :07:19.One local authority might say they have half-empty schools but another
:07:19. > :07:28.with the same buildings will say, hours are well occupied. That is
:07:28. > :07:31.part of the problem. The school intended to be seized the pupils
:07:31. > :07:36.said they did not have become a collations the local authority was
:07:36. > :07:40.using said they had a lot of space, and those are genuine difficulties.
:07:40. > :07:46.We will not resolve those by shouting at each other but we will
:07:46. > :07:48.if we sit down and look at them. It may not entirely be a problem of
:07:48. > :07:58.money but are you saying to the councils that are considering
:07:58. > :08:05.closing schools that you'll make money available to compensate?
:08:05. > :08:10.There are already arrangements for rural schools. Some school closures
:08:10. > :08:18.cost local authorities money. There is a report that looks at the
:08:18. > :08:21.outcome, and most councils set a very little money if anything when
:08:21. > :08:25.you take in the cost of increased transportation, and possible
:08:25. > :08:35.changes to receiving schools. Those are things we need to study in more
:08:35. > :08:43.detail. There is already a settlement. Calculations about her
:08:43. > :08:48.what local authorities get forward will schools is too complicated. --
:08:48. > :08:52.for rural schools. The general point that the COSLA is
:08:52. > :08:58.making is that while you call in these decisions, fundamentally,
:08:58. > :09:00.this should be up to local authorities and that you as the
:09:00. > :09:05.Scottish Government are starting to look like you are trampling on
:09:05. > :09:10.prerogatives that should be theirs. The legislation is very clear and
:09:10. > :09:15.it gives the role to ministers. This was a matter of negotiation
:09:15. > :09:19.between COSLA and the Scottish Government before I became
:09:19. > :09:24.Education Secretary. It is also a matter of communities and there are
:09:24. > :09:29.on a number of players and actors in this. They all need to be
:09:29. > :09:39.involved. What I want to do is to see everyone playing their rule --
:09:39. > :09:44.
:09:44. > :09:50.their role and not to be jealous of things.
:09:50. > :09:53.This has been an ongoing issue for more than a decade. One of the real
:09:53. > :09:58.problems with this issue is that communities often feel they are not
:09:58. > :10:03.treated fairly. I think it is the right thing to do to step back and
:10:03. > :10:07.ask if they are being treated fairly. That was the purpose of the
:10:07. > :10:15.legislation. We should all look at that. It has not been invented in
:10:15. > :10:20.the past week. Are you saying that COSLA's fears are groundless?
:10:20. > :10:24.What I am saying is we should work together on this. That has been my
:10:24. > :10:28.line, and I want to make sure everyone is doing best in the
:10:28. > :10:33.interests of rural schools, not because of rural schools are
:10:33. > :10:38.special per say, although I think they are, but they are an important
:10:38. > :10:41.part of how we deliver things and sustain things in rural Scotland.
:10:41. > :10:46.There is a report coming out tomorrow saying that a lot of
:10:46. > :10:51.people going through teacher- training are ending up not getting
:10:51. > :10:58.jobs, is that a problem and are you doing anything about it?
:10:58. > :11:03.I think it is a problem that is being solved. When I came into the
:11:03. > :11:11.post in December 2009 it was a big issue and these figures relate to
:11:11. > :11:16.2010. We have reduced the number of training places caused -- because
:11:16. > :11:23.it is not right to train people for whom there are not jobs. The
:11:23. > :11:26.situation is coming into balance. I have described this issue as the
:11:26. > :11:31.thing that has given me the most sleepless nights as Education
:11:31. > :11:35.Secretary. It has been very difficult. Local authorities have
:11:35. > :11:40.been cutting numbers but I believe we have a joint responsibility to
:11:40. > :11:43.get this right and I think we are beginning to. I think the
:11:43. > :11:47.settlement this year will allow us to bring teacher numbers into
:11:47. > :11:52.balance. There are positive signs in the statistics, with the
:11:52. > :11:55.claimant count for unemployed teachers following year on year or
:11:55. > :12:05.so things are going up in the right direction, but it has not been good
:12:05. > :12:06.
:12:06. > :12:13.and some people have had a Now, they are already buying up
:12:13. > :12:17.large parts of the world's economy. Alex Salmond now wants one often
:12:17. > :12:22.Norway has bought one and China has the biggest.
:12:22. > :12:27.If you want to know where financial power lies, go to the governments
:12:27. > :12:31.of countries with a lot of oil and gas. They have been putting cash
:12:31. > :12:35.aside into funds which have been built up into gigantic Sovereign
:12:35. > :12:43.Wealth Funds. Taken together, they are thought to be worth around five
:12:43. > :12:48.trillion pounds. That is 50001000 million pounds. It represents a
:12:48. > :12:52.significant and permanent shift in the world economic order. A select
:12:52. > :12:59.gathering of banking and investment experts in Edinburgh today digest
:12:59. > :13:05.the implications of how these funds already are invested around the
:13:05. > :13:12.world. These funds are spread their risk out of oil and gas but
:13:12. > :13:17.national governments are already investing heavily in that, too. The
:13:17. > :13:26.Korean state energy company spent �1.9 billion last year to buy one
:13:26. > :13:33.of Scotland's biggest companies in petroleum. And an investor from Abu
:13:33. > :13:36.Dhabi is now one of the biggest in Aberdeen. There are some questions
:13:37. > :13:44.about this. First, if they are big now, how much bigger campaign
:13:44. > :13:51.group? In dollar terms, you are looking at about 67 trillion
:13:51. > :13:58.dollars of asset value. In terms of the potential, Justin some of the
:13:58. > :14:04.calculations I have done, with very little effort, the figure can be as
:14:04. > :14:09.high as 10 times that much. Much of that could come from rising oil
:14:09. > :14:13.prices, while China has huge trade surpluses. Armed with those, how
:14:13. > :14:17.was it using its firepower? There has been a shift from the West to
:14:17. > :14:23.the east of that financial power and China is the economy on the
:14:23. > :14:28.front foot. It has built up its economic and financial might.
:14:28. > :14:32.of the biggest players is closer to home. What about Norway? For the
:14:32. > :14:42.past 20 years, it has been putting aside his oil wealth and the fund
:14:42. > :14:43.
:14:43. > :14:47.is now worth around �370 billion. - - its oil wealth. Norway owns
:14:47. > :14:55.between one and 2% of the world's stocks on the world's stock market
:14:55. > :15:01.and they are big investors in UK all food extraction. -- UK oil. For
:15:01. > :15:03.Scotland, these giant funds raised two issues. One is how do you
:15:03. > :15:08.attract investment here to buy the bonds the Scottish government has
:15:08. > :15:13.been told it is not allowed to issue? Making that pish, one a bit
:15:13. > :15:21.tied for cash himself, the Scottish Finance Minister. -- are making
:15:21. > :15:24.that pitch. When you look at the scale of opportunity, particularly
:15:24. > :15:32.where the Scottish government has given clear direction for the
:15:32. > :15:37.future of energy production in Scotland, we have significant
:15:37. > :15:43.resources to invest. We will give them every encouragement to see us
:15:43. > :15:49.as a place to invest and give them every opportunity to do so.
:15:49. > :15:54.question is whether Scotland could use its remaining offshore oil and
:15:54. > :15:59.gas funds to be spent on public services. We still have 40% left
:15:59. > :16:03.where we can say, let's have a careful look at how we spend that
:16:03. > :16:07.40%. Perhaps we should take a modicum of a lesson from the
:16:07. > :16:11.Norwegians and start to spend some of those funds in creating a
:16:11. > :16:16.stabilisation fund either one that represents capital for the future,
:16:16. > :16:22.rather than just spending it on oil extraction. There has to be a
:16:22. > :16:25.balance between the utilisation of gas and oil reserves in terms of
:16:25. > :16:29.public expenditure and investing in the long term. What the UK
:16:29. > :16:32.Government has done in the last 30 years is spend everything in the
:16:32. > :16:36.short-term and spend nothing in the long term. What the Scottish
:16:36. > :16:39.government is determined to do is to make sure that does not happen
:16:39. > :16:43.and that is why it is important that we have powers and controls
:16:43. > :16:48.over state revenues that of realised from a renewable sector to
:16:48. > :16:53.enable us to invest for the long term. With a new government, new
:16:53. > :16:56.momentum for that idea, and of course, one other rather
:16:56. > :17:02.significant question. Where does this gigantic shift of wealth and
:17:02. > :17:10.power to leave us in the world economic order?
:17:10. > :17:16.The chair looking at those Sovereign Wealth Fund Star Wars the
:17:16. > :17:21.head of The Scotsman. Is there hope that these organisations will buy
:17:21. > :17:26.as some of it, all of it? You have got to remember that these are
:17:26. > :17:30.colossal sales in terms of what the government has had to deal with
:17:30. > :17:36.before. It dwarfs the British Gas privatisation in the 1980s so I
:17:36. > :17:44.think what we will see his small slices of shares coming onto the
:17:44. > :17:48.market next year if, perhaps about four, 5 billion out of the total
:17:48. > :17:54.and I am pretty confident that some of the Sovereign Wealth Funds will
:17:54. > :17:58.be buyers and we have already had discussions with Abu Dhabi and
:17:58. > :18:04.their wealth fund to see if they might be interested in taking the
:18:04. > :18:09.stake. Do you think there could be political opposition? Perhaps if it
:18:09. > :18:15.goes over or above a certain level. The important thing is to be paid
:18:15. > :18:21.dispersal of ownership. It would be a bit worrying if it all went to
:18:21. > :18:27.one or two wealth funds. But you think these buyers could buy
:18:27. > :18:31.packets of shares rather than, for example, one or two big banks
:18:31. > :18:37.buying it and carving it up between them? That would certainly be a
:18:37. > :18:45.preference. Just to come back to that word I used, it is dispersal
:18:45. > :18:51.of ownership that is so important. We would love to have a tacit
:18:51. > :18:58.campaign but the magnitude of this is going to have some element of
:18:58. > :19:03.international buyers for the shares. This idea of North Sea oil, some of
:19:03. > :19:08.it, the revenues being put into some sort of Sovereign Wealth Fund
:19:08. > :19:11.or Scotland having its own one, where role we with that? I can only
:19:11. > :19:17.say that John Swinney must have been drilling when he heard some of
:19:17. > :19:25.the figures from the Norwegian investment fund. As Douglas Fraser
:19:25. > :19:30.was saying, that is grazing $600 billion in value. A colossal bank
:19:30. > :19:34.that it has built up. How Scotland could emulate that, I think it is
:19:34. > :19:39.quite impossible. There would be enormous conflict between how much
:19:39. > :19:44.you put into a long-term strategic fund such as this and how much you
:19:44. > :19:51.have to devote to current spending, and also, of course, debt interest
:19:51. > :19:56.and pay down. On the other hand, it Norway managed it and they have
:19:56. > :20:03.been doing it since the 1970s. As John Swinney said, we have just
:20:03. > :20:06.spent all of our money? We did in the 1980s. There was a very
:20:06. > :20:11.interesting discussion we had as to whether that was the best thing to
:20:11. > :20:15.do. I think there would be an enormous political pressure on any
:20:15. > :20:20.government in the UK which built up a Sovereign Wealth Fund of anything
:20:20. > :20:24.like that size. It would be a political target immediately for
:20:24. > :20:29.the spending lobbies and everybody would be fighting, not necessarily
:20:29. > :20:33.in an orderly queue, to say, we need the money for this sector or
:20:33. > :20:40.this lobby or this part of the economy long before you were able
:20:40. > :20:42.to build up a wealth fund of this size. So you are saying even if we
:20:42. > :20:48.were to have for John Swinney ones, that would not necessarily mean we
:20:48. > :20:52.would then behave in a sensible way like the Norwegians did? There is
:20:52. > :20:56.no guarantee we would start to behave sensibly simply because we
:20:56. > :21:01.were building up a Sovereign Wealth Fund. Thank you so much indeed. A
:21:01. > :21:08.quick look at the front pages, starting with The Scotsman. It says
:21:08. > :21:15.a radical overhaul plan for charity to generate cash from assets. And
:21:15. > :21:21.then Alex Salmond launches scathing attack and comments that Alex
:21:21. > :21:29.Salmond has made about a judge and Lord Hope. Schools are told to