IMPROVING both physical and social infrastucture is key to success, writes Michael Watson
The proposed £1 billion City Deal for Edinburgh and south-east Scotland received a welcome boost when Chancellor George Osborne appeared to give it his backing in the recent Budget. It is estimated a further £3.2bn investment will be generated from the private sector, with a large chunk from UK and international investors taking an interest in infrastructure projects which promote skills, technology and innovation.
In these days of global competitiveness, the City Deal concept helps places like Edinburgh, Glasgow, Aberdeen and Inverness address the imbalance which can see the lion’s share of infrastructure investment head to “super-cities” such as London, Paris and Frankfurt, and creates a framework for a visible, deliverable investment programme.
The impending referendum on British membership of the European Union could, paradoxically, help in promoting City Deals.
With momentous events like this, international investors tend to defer decisions on where to place their billion-pound funds, asking “Is this a politically stable environment in which we should invest?” Cities or regions which are more devolved and less influenced by national politics are increasingly viewed as more stable and lower risk for long-term infrastructure investment.
So much the better if an investor can gain exposure to a number of different asset classes in a capital city like Edinburgh. Scottish cities wishing to secure global investment must get their acts together if they are to avoid losing ground to England’s “Northern Powerhouse” cities.
To maximise economic growth, Edinburgh and the south-east must attract highly productive and skilled people and transport them to and from work in the most efficient way. A top priority is to upgrade the transport network. Edinburgh’s natural beauty, history, manageable size, low crime rate and stable local government makes it well-placed to attract highly skilled workers to fire up economic growth.
However, the city and surrounding regions’ social infrastructure (schools, higher education, hospitals, art, cultural and leisure facilities) has to match the aspirations of these workers, and it can be argued this has been overlooked in the past. This is a key element of the City Deal: helping the population of the region become more productive, do more interesting, rewarding work, with a consequent improvement in living standards and opportunities for all.
The challenge is for the city fathers and their counterparts in Fife and the Lothians to quickly bring to the table concrete proposals which are deliverable in a short time period. This will give confidence to investors that there is a visible project pipeline and encourage the UK and Scottish governments to back up encouraging words with cash.
Pinsent Masons is playing a central role in fleshing out the infrastructure requirements of all UK regions over the next 35 years and helping identify options to deliver strategic projects.
We are hosting a series of consultation events, including one tomorrow in Edinburgh, which will test evidence submitted by a wide range of infrastructure stakeholders, and add value to this vitally important debate.
• Michael Watson is group head of finance and projects at Pinsent Masons