£2bn plea to prevent Aberdeen hitting hard times

The North Sea oil sector is crucial to the prosperity of Scotland's North East. Picture: Craig Stephen
The North Sea oil sector is crucial to the prosperity of Scotland's North East. Picture: Craig Stephen
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UK AND Scottish ministers will today be urged to back a £2 billion package to fund jobs programmes and transform infrastructure in Aberdeen along similar lines to the Glasgow City Deal signed last year.

At an oil industry summit in the city, the Westminster and Holyrood governments will be asked to sign up to the fund for North East Scotland as part of a 20-year plan to protect the region’s energy sector against economic shocks such as the crisis caused by plunging oil prices.

First Minister Nicola Sturgeon and Scottish Secretary Alistair Carmichael will be told that the “time is right to invest in people, houses, transport and innovation” to secure the long-term future of the oil and gas industry.

Glasgow last year formally signed a City Deal with the UK and Scottish Governments to bring in £1.3bn of extra investment. The scheme will see Westminster and Holyrood give £500 million each in additional grant funding to the city and its surrounding areas, with Glasgow and neighbouring councils supplementing this by borrowing £130m.

Aberdeen City Council leader Jenny Laing will today call on both governments to agree a similar deal for the Granite City at the summit, which will also be attended by unions and industry figures in the wake of job losses, pay cuts and freezes announced by companies including BP, Taqa, Petrofac and the Wood Group in recent weeks.

The leader of the Labour-led authority said that ongoing austerity had led to Aberdeen being starved of investment in its infrastructure, despite its status as Europe’s oil capital.

In a speech to the summit today, Ms Laing will say: “Similar deals have been put in place for city regions in England and for Glasgow.

“There is evidence that – despite Aberdeen’s booming economy over the last ten years – the lack of enabling public sector investment is holding back investment from the private sector.

“In particular a lack of transport capacity is constraining housing and employment. Development of the airport is limited by congested roads and a much needed £400m expansion of the harbour is seeking a public contribution for roads.”

Scottish Secretary Mr Carmichael, welcomed Aberdeen council’s plan to bid for financial support through the City Deal initiative.

Mr Carmichael, who will attend today’s summit, said: “I am a strong advocate of the UK Government’s programme of city and growth deals. They are a great initiative for unleashing growth and opportunity. I know that Aberdeen City Council and others have been putting in a lot of effort to prepare for further discussions with us on this.”

A Scottish Government spokeswoman said: “We are always happy to consider new proposals and to discuss Aberdeen’s ideas for a City Deal.”

Scottish Labour leader Jim Murphy has called for the launch of a £10m resilience fund to help areas suffering economic shocks, such as job losses in the energy sector.

Mr Murphy said: “The fund would only be used in the event of an area facing a substantial economic shock.”

Unions and industry bosses last night welcomed the prospect of government action.

Tommy Campbell, Unite regional industrial organiser, said: “Given the threat of huge job losses, this initiative would be very welcome and would give hope to workers and their families whose jobs may be at risk.”

Malcolm Webb, chief executive, Oil & Gas UK said ahead of today’s conference, said: “If we are to avoid lasting damage to this industry and its £35bn supply chain, now is the time for meaningful action.”