Exclusive:Scottish councils bid for new City Region Deals to secure billions needed for 'generational challenges'

Economic chiefs say their areas ‘should not and cannot be left behind’

Edinburgh and Glasgow have begun talks with the Scottish and UK governments on potential successors to the multi-billion-pound City Region Deal programme, it has emerged.

Paul Lawrence, chief executive of the City of Edinburgh Council, revealed the discussions as he warned it was “very difficult” to see where local authorities were going to find the money from within their own budgets to address “generational challenges”.

The Edinburgh skyline from Calton Hill | Getty Images/iStockphoto

City Deals were initially introduced by the Conservative-Liberal Democrat coalition government at Westminster in 26 areas of England between 2012 and 2014.

They were bespoke funding packages for specific projects and goals, sometimes accompanied by more local decision-making powers.

The packages soon evolved into City Region Deals. Glasgow secured the first one north of the Border in 2014, with a £1.2bn agreement backed by both the UK and Scottish governments, in the weeks before the historic independence referendum.

The deal focused on transport schemes, growing life sciences, supporting business innovation and tackling unemployment.

Aberdeen and Aberdeenshire gained their own deal in 2016, followed by Inverness and the Highlands in 2017 and Edinburgh and South East Scotland in 2018.

Cyclist, pedestrian and wheeler Sighthill Bridge over the M8. The project was part of the Glasgow City Region City Deal. Picture: John Devlin | National World

A City Region Deal or a Growth Deal has now been announced for every part of Scotland.

However, cities like Glasgow have been highlighting recent “trailblazer devolution deals” progressing for the likes of Greater Manchester and the West Midlands in England, involving further investment and local decision-making powers.

Kevin Rush, director of regional economic growth at Glasgow City Region, wrote a blog post in December that said: “As the biggest region in Scotland, and a key component in the success of the Scottish and UK economies, we simply should not and cannot be left behind.

“In 2025, it is vital that the UK and Scottish governments escalate and agree a comparable devolution deal and further powers for Glasgow City Region.”

Meanwhile, speaking at a meeting of Edinburgh City Council finance and resources committee last week, Mr Lawrence was asked about funding for medium-term capital projects, such as those required to meet net-zero targets.

He said: "The resources needed to address these generational challenges are very difficult to see coming purely from within.

"At Edinburgh we have begun, in very early days, to have some conversations with both governments about what a successor to the City Region Deal might look like. Glasgow are trying to do the same thing.

"And I do think a sort of three-way dialogue between the city-region, many of these are regional issues - particularly transport and so on - the UK government and the Scottish Government, is a good place to start on that wider agenda.

"But we are also very keen to look at fiscal mechanisms, which share risk between the public and private sector.”

Mr Lawrence added: “I think there are ways in which different funding schemes can be used in an innovative way, and we're trying to continue to discuss that with both UK and Scottish governments because we need them on board with us."

A Scottish Government spokesperson said: “The £1.3bn Edinburgh City Region Deal, which concludes in 2033, is supporting programmes to drive economic opportunities and provide more than 21,000 jobs in Edinburgh, the Lothians, Fife and the Scottish Borders.

“The Scottish Government is in regular conversation with Regional Economic Partnerships on economic growth and empowerment, including Edinburgh and South East Scotland.”

A UK government spokesperson said: “The Scottish Secretary and his officials have held productive discussions with representatives in every region of Scotland about the opportunities for creating growth in their area, and these will continue as our plans develop."