SCOTTISH Government must offer support to the major drivers of the country’s economy, argues Andrew Burns
Scotland’s cities and their regions are crucial to our future success, contributing 60 per cent of Scottish economic activity and representing 54 per cent of all employment. And in the future, they are going to be even more important – population growth in Aberdeen, Dundee, Edinburgh, Glasgow, Inverness, Perth and Stirling and their regions will greatly outstrip that of the country as a whole and by 2030, continuing at the same rate, the cities will be responsible for two-thirds of Scotland’s economic activity. As such, it is in everybodies interest that we get policies relating to our cities right.
This requires a real step change in the way we do things. Historical ways of working need to be challenged and we need to look at innovative approaches to allow cities and their regions greater control of local issues, greater fiscal autonomy to help create jobs and sustainable economic growth, and the flexibility to deliver services that are city and region specific. We need greater control over council tax, business rates, land and property transaction tax while also being in a position to generate local taxes where appropriate and where we can demonstrate the benefits this would deliver.
While the Scottish Government pushes for greater control over its affairs from Westminster, it is only right and logical that we in turn look to do the same. Retention of a greater share of taxes to our growing localities would allow investment in necessary infrastructure and skills to encourage further growth, and benefit Scotland as a whole.
Reduced budgets coupled with some of the statutory services local authorities are legally obliged to deliver makes it difficult to create real local solutions to local problems.
That is why Scotland’s seven cities made five key “asks” of the Scottish Government in our recent discussion document. These are:
• Control over decisions relating to key infrastructure projects. This would include transport, water, skills, health and local economic development
• Passing on to local areas all of non-domestic rates and a proportion of the fiscal retention to be granted to the Scottish Parliament by the Scotland Bill
• The freedom for cities to raise local taxes
• Commitment to the continuation of support to progress city deals and city regions deals.
• The allocation of dedicated national resources at a city region level for inward investment.
In return, Scotland’s seven cities would:
• Ensure Scotland’s cities became increasingly recognised and desired places for capital and foreign direct investment.
• Work closly with the private sector on joint investment and long-term growth and productivity
• Ensure that “place making “is at the heart of development
• Promote greater community involvement and responsibility for shaping localities, including allocation of budgets.
• Help ensure greater partcipation in local democracy
• Reduce inequality. I mentioned some figures earlier from my own region that is worth reiterating – 21 per cent of children living in poverty. 24 per cent of the region living in fuel poverty. It is essential that we tackle these sorts of issues and greater local control will allow us to get to grips with some of these problems.
Through our region’s work on the Edinburgh and South-East Scotland City Region Deal with the Scottish and UK governments, I believe we are pushing at an open door.
Glasgow was the first Scottish city region to agree a deal in 2014 which outlined an ambition to unlock investment of up to £1.2 billion. Aberdeen, Inverness and Edinburgh have this year submitted city region deal proposals which have the potential to unlock up to £4.2bn of investment.
This isn’t a case of seeking greater control just for the sake of it. What we want to see is decisions made locally – for communities to decide on issues affecting them which can deliver greater efficiencies, reduce dupliations and generate better outcomes.
This is not to say that we are not aware of the need for national grant support to equalise variable local tax bases, variable costs of providing services, and variable patterns of need and demand. However, there is growing evidence that decentralising systems of government can deliver better outcomes both economically and socially. In Germany for example, local government areas raise on average approximately half their budgets from local taxes on incomes and business profits.
Our cities have the potential to deliver much more but the highly centralised nature of our government means we are currently unable to realise our full potential. In order to deliver thriving local economies that can also improve peoples’ lives, cities and their regions need more control of their own destiny.
I do believe – and Scotland’s seven cities believe – we have a real chance here to fundamentally change the relationship between councils and citizens… and to deliver a more prosperous and fairer Scotland for us all.
• Andrew Burns is leader of the City of Edinburgh Council and chairman of the Scottish Cities Alliance