MSPs highlight issues with City Region Deals

Significant issues need to be addressed with Scotland’s City Region Deals, according to a Holyrood committee’s report.

Published today, the Local Government & Communities Committee report Deal or No Deal recognises that these deals are in their infancy but outlines a number of concerns on the economic growth projects.

City Region Deals, which have seen a £3.3bn investment in Scotland so far, were first introduced in 2011 by the UK Government in England, and extended to Scotland in 2014 as a partnership with the Scottish Government, local authorities and others to boost jobs and grow regional economies.

Four such deals in Scotland are now in either the delivery stage or have reached outline approval, focused on Glasgow (with £1.13bn of public investment), Edinburgh (£1.1bn), Aberdeen (£826m) and Inverness (£315m), and their surrounding regions. Two further deals for Stirling and Dundee, plus the wider areas in the central region and Tayside, are being discussed.

However the report finds that there are “confused and cluttered” priorities between the UK Government, Scottish Government and local authorities. For example, investments made by the UK Government focus on purely economic and bottom-line benefits whereas the focus for the Scottish Government is inclusive growth. This and the “mismatch between the objectives” of local government and the two Governments risks reducing the impact that can be achieved from the deals.

The process for selecting projects is “too opaque”, and also too top-down at local authority level despite efforts to engage with local people and businesses. These should be involved in deals in a meaningful way so they can help shape projects, and not just be “informed after decisions have been made”. The committee also calls for clear guidance from the joint delivery group set up by the two Governments on evaluating projects and the reasons for selecting some ahead of others.

It has additional concerns that areas of Scotland not currently covered by a City Region Deal may be doubly disadvantaged by “displacement effects” – investment being diverted to areas covered by deals. Other initiatives, such as the Ayrshire Growth Deal and the Borderlands Initiative, should not be seen as the poor cousin of City Region Deals.

With the Glasgow City Region Deal, the most established Deal in Scotland, currently being under review, the report recommends that other deals learn from its experience.

Committee convener Bob Doris MSP commented: “We welcome the significant investment of £3.3 billion to create new jobs and build exciting and thriving areas around our major cities – some of which are in the most impoverished and deprived areas of Scotland.

“But it’s clear from the evidence we have heard and our committee visits that there are significant issues with City Region Deals that must be addressed.

“That’s why we strongly recommend that all governments – national and local – work together and agree to a single focus, as a key priority should be maximising the benefits for local communities.”

He added: “In order for City Region Deals to be a success right across Scotland, we need clarity on when this initiative will be extended to all. As these deals are in the early years of a 10-20 year programme of investment, our committee will be keeping a close eye to check whether these improvements have been made and whether further action is required.”

Click here to access the report.