City Region Deals

– in the Scottish Parliament on 9th January 2018.

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Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

1. I wish one and all the very best for 2018.

To ask the Scottish Government what its response is to the recent reported concerns regarding city region deals. (S5T-00849)

Photo of Keith Brown Keith Brown Scottish National Party

I thank Kenneth Gibson and his fellow members of the Local Government and Communities Committee for their report, which is to be welcomed.

The Scottish Government and I want to see all parts of Scotland thrive, and city region deals are contributing to that aim. It is important that they encourage the United Kingdom Government to commit investment to the Scottish economy that might not otherwise be forthcoming.

In each of the city region deals that we have agreed, we have been clear that the deal must demonstrate benefit to the whole region, not just to the city involved, and that continues to be our approach for the remaining city region deals. However, city region deals are only one part of a much broader toolkit that the Scottish Government deploys to foster growth in Scotland.

The Local Government and Communities Committee has made a series of important points, which I will carefully consider and respond to in due course. I hope that I can rely on the UK Government to do likewise. I think that the committee meeting on 22 November was the first time in the Parliament’s history that both a UK Government minister and a Scottish Government minister appeared before Parliament together. I hope that we will also see a response from the UK Government to the committee’s points. I agree, for example, that rigid demarcation of reserved and devolved deal components limits the scope of a deal. City region deals are the product of negotiations between the Scottish Government and the UK Government, and they reflect the fact that the two Governments have different economic strategies. In Scotland, we want to promote growth that simultaneously tackles inequality, because we believe that that will create more sustainable benefits in the longer term.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

Does the cabinet secretary agree that the focus should be on what a project in a given deal can deliver? He has just said that whether a project is reserved or devolved should be irrelevant if we are to attract optimum levels of investment and deliver the best possible outcomes. Is that happening at this time?

Photo of Keith Brown Keith Brown Scottish National Party

As I said in my evidence to the Local Government and Communities Committee, the UK Government introduced the stipulation that it will fund only reserved matters. It has not stuck rigidly to that in all cases, and that was not the basis of the Glasgow city region deal, which was the first deal in Scotland. However, the UK Government says that it is important for it to do that. We continue to discuss with the UK Government ways in which we can be more flexible. For example, we continue to discuss whether, in different parts of a given area—not all the deals are restricted to cities; they can apply to a wider area—we can have different balances of regional and devolved issues, if that makes sense. We have tried to be as flexible as possible.

I agree, of course, that we want to invest in projects with maximum impact. I have had discussions with the Secretary of State for Scotland, who has acknowledged that it would be helpful for local authorities and others who are involved in shaping deal propositions if the two Governments were very clear in their resolve to work together in effective partnership. I am committed to doing that and ensuring that any obstacles to delivering for Scotland are removed.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

In the committee meeting on 22 November, Lord Duncan of Springbank gave heavy hints that the chancellor would announce funding for the Ayrshire growth deal on that budget day. That did not happen. Does the cabinet secretary share my concern that foot dragging by the UK Government will lead to areas that are left behind being doubly disadvantaged by the displacement of investment? Glasgow’s deal, for example, has been up and running since 2014, but no date has yet been set for the commencement of Ayrshire’s deal. Does the cabinet secretary agree that it is important to provide a clear timetable by which growth deals for areas such as Ayrshire will begin?

Photo of Keith Brown Keith Brown Scottish National Party

As Kenneth Gibson is aware, I have asked the UK Government in writing and verbally on a number of occasions to commit to an Ayrshire growth deal. I have also publicly stated my and the Scottish Government’s intention to agree a growth deal for the Ayrshires. We will continue to encourage the UK Government to support that. Despite—Kenneth Gibson hinted at this—positive discussions at an earlier stage, no commitment has yet been made to an Ayrshire growth deal from the UK Government. However, we will continue to encourage it to contribute to the regional economy of Ayrshire, whether through the UK’s industrial strategy or other specific UK Government initiatives. My officials will continue to engage with the Ayrshire partners, and we will see through a growth deal for Ayrshire. It would be best if we could do that in tandem with the UK Government, but that, of course, is a decision for the UK Government to take.

Photo of Oliver Mundell Oliver Mundell Conservative

My constituents were disappointed that, unlike the UK chancellor, Derek Mackay failed to even mention the borderlands growth deal in his budget speech. Will the cabinet secretary reassure my constituents that the Scottish Government is fully on board with that game-changing cross-border proposal, and will he set out what specific resource has been committed to it?

Photo of Keith Brown Keith Brown Scottish National Party

We have, of course, made substantial commitments in relation to the establishment of a new agency for the south of Scotland, and the Borders has been part of a city deal already, so I do not accept the idea that we have not been proactive in ensuring that there is a deal for the Borders. However, it is important to take into account what Kenneth Gibson said. A deal for Ayrshire was meant to be on the cards. What has happened to the Ayrshire growth deal, and why are the borderlands now being spoken of ahead of the Ayrshire growth deal?

I have said to the Secretary of State for Scotland that I am willing to work with him on a borderlands deal. Despite the fact that, before Christmas, we agreed once again that we would work jointly and collaboratively on this, this week my office was told that we should undertake joint visits later this month; there was no discussion—my office was simply told when the secretary of state is going. He certainly knows now that I cannot go on the day in question, as I have a prior commitment with the Council of Economic Advisers, but no alternative date was offered. That is not joint working; that is not collaboration. I do not know whether what is going on is game changing or game playing, but we remain committed to working on a borderlands deal.

What has happened to the Ayrshire growth deal? What has happened to Falkirk? What has happened to Moray? What has happened to the islands? Those other parts of Scotland also deserve recognition but, unlike the part of the country that Oliver Mundell represents, they have not yet had a city deal. We need to be honest and sincere when we talk to people about this issue.

Photo of Colin Smyth Colin Smyth Labour

One of the warnings that are given in the Local Government and Communities Committee report is that rural areas that are not covered by current city deals must not miss out or lose out to bigger cities. Dumfries and Galloway is not covered by any city deal, so why have no meaningful negotiations involving the Scottish and UK Governments and the five local authorities that cover the borderlands taken place? When will we see those negotiations begin? When will funding be made available for specific projects? Given the committee’s concern that local communities and businesses should be involved in shaping those projects, will the cabinet secretary ensure that there is an end to the secrecy surrounding the projects that have been submitted to the Government by the borderlands local authorities?.

Photo of Keith Brown Keith Brown Scottish National Party

I do not know about that—the member would have to ask the council whether the projects that they have submitted are being kept secret.

On the point about rural areas, first of all, it is worth saying that the agreed city deals and those in prospect also include areas, such as my own, that are semi-rural and not part of a city area. Indeed, many of the city deals cover large parts of Scotland that are rural.

The point that I making, which I tried to make in response to Oliver Mundell’s point, is that we must have an agreed process for how we go forward. Therefore, whether we are talking about the borderlands, the Ayrshire growth deal, Moray, which has also asked for a growth deal, Falkirk, which is not part of any growth deal, or some of Scotland’s islands, there must be an agreed basis on which to proceed.

We will make sure that all parts of Scotland, including Dumfries and Galloway, are covered by a growth deal, but we need to know whether the UK Government is on board. We need clarity about that and the basis on which it would be involved. To return to the previous point, is it the case that the UK Government will fund only through its industrial strategy? Does it want to continue to have joint deals with the Scottish Government? Will it be constrained and fund only reserved issues? Of course, the UK Government did not do that with the Democratic Unionist Party when it put £1.5 billion towards matters that are all devolved, not reserved.

I assure the member that there will be a deal for Dumfries and Galloway, but we need clarity and we would like to know whether the UK Government is on board for that and the other deals that we think should take place across Scotland.

Photo of Jenny Gilruth Jenny Gilruth Scottish National Party

The cabinet secretary will be aware of my frustration that Fife Council did not include the Levenmouth rail link proposal in its submission to the Edinburgh city region deal. Will Fife Council have a future opportunity to re-evaluate its priorities and to submit the Levenmouth rail link proposal for consideration?

Photo of Keith Brown Keith Brown Scottish National Party

The member will know the position better than I do, but my understanding is that the transport minister has given a commitment to investigate further the question of the Levenmouth rail link.

More generally on the question of city deals that have been struck subsequently changing, Lord Duncan and I have said that we are willing to look at potential changes. The Glasgow deal is now three or four years old, and there is the prospect of a lot of change, not least because of Brexit. However, we will not be looking for changes to the relative distribution among the different parts of that area—that is, among the different councils—or a change to the quantum of money that is being made available by the UK and Scottish Governments.

The deals last for a long time—they may be 15 or sometimes even 20 or 30-year deals—but we cannot constrain councils and other partners by saying that they will stay the same throughout that period. On the basis of what we have agreed, including the amount of funding, we are willing to consider further changes.

Photo of Clare Haughey Clare Haughey Scottish National Party

The Cathkin relief road in my constituency was built using city deal funding of more than £20 million. Despite many of my constituents protesting that the road was not needed and that its construction through a wild park would destroy the habitat of many animals and plants, the previous South Lanarkshire Council Labour administration granted planning permission. What assurance can the Scottish Government give my constituents that their views will be taken into account—and listened to—in any future city deal projects?

Photo of Keith Brown Keith Brown Scottish National Party

In relation to the city deal that Clare Haughey raised, it is true that the Scottish Government was not involved in the early parts of the process. We were simply met with a demand from the UK Government and the constituent authorities for funding of £500 million, which we agreed to provide. The initiatives are led by local authorities and local partners, so it is for them to undertake consultation to ensure that they have local populations on board.

I clarify for Clare Haughey that the city region deals do not override existing processes. Local authorities will remain responsible for ensuring that proper consultation with communities and other interested stakeholders is undertaken, especially when there is a statutory process as plans are developed. There were statutory processes involved in the circumstances of that particular project, and it is incumbent on the local authority to make sure that consultation processes take place.

Photo of Jamie Greene Jamie Greene Conservative

I am sure that everybody in the chamber will join me in welcoming the £1 billion investment in Scotland that the UK Government has made through the city region deals. Members will be pleased to know that I will meet the Secretary of State for Scotland on Friday to discuss how we can move forward with the Ayrshire growth deal. Does the cabinet secretary agree that, to alleviate any perceived tensions between London and Edinburgh, a potential compromise on objectives is not just possible but in the best interests of Scotland?

Photo of Keith Brown Keith Brown Scottish National Party

I agree with Jamie Greene’s final point. I have asked in writing and verbally any number of times for a commitment to an Ayrshire growth deal—not to discuss the projects, what the compromise on the projects might be, or the amount of money to be put towards the deal, but just to discuss the principles—and that surely has to be the starting point. If I, or Jamie Greene when he meets the secretary of state later this week, can get a commitment to an Ayrshire growth deal, that will be the starting point. Then, as we have for each of the other city region deals, we can reach a compromise that will be to the benefit of all the constituent authorities. I wish the member luck in succeeding

—where, so far, I have not— in convincing the secretary of state to make a commitment on behalf of the UK Government to an Ayrshire growth deal.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

As the cabinet secretary mentioned, Moray is developing a growth deal in order to compete with Inverness and Aberdeen, which have city deals. Is he willing to discuss with his UK counterparts how we can get more clarity from them as to what the UK contribution might be to a growth deal, and how we can expedite the plans?

Photo of Keith Brown Keith Brown Scottish National Party

That is Richard Lochhead’s key point. If we have an agreed understanding now or shortly on how to go forward from the current position of having agreed the existing city deals, we can make rapid progress with the two prospective city deals for Stirling and Clackmannanshire and the Tay cities, and with the other areas of Moray, Falkirk, Argyll and Bute and the borderlands. However, if we do not have an agreement, the Scottish Government will have to take forward those matters itself. We can get more out of it if we work together, so I am more than willing to continue talking to the UK Government about that and, as Richard Lochhead has urged me to do in the past, to continue talking to Moray Council on its specific proposals.