Tension between Holyrood and Westminster hit City Deals impact

The impact of a raft of multi-billion pound city deal across Scotland in recent years could be damaged by 'tension' between the Scottish and UK Governments, a report by MSPs finds.

Ministers and councillors sign the Edinburgh and South East Scotland in July 2017. Picture: Greg Macvean

There are also concerns that extravagant jobs claims linked to the high-profile deals could exaggerated.

Four deals have so far have been approved in Scotland worth a combined total of around £3.3 billion in the Glasgow, Aberdeen, Edinburgh and Inverness-shire regions, with others also in development.

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Holyrood’s local government and communities committee said there was much to welcome about the deals but raised concerns over confusion and clashes in policy between “competing” bodies behind the schemes.

The Tory government at Westminster and SNP government at Holyrood are the principal bodies funding the initiatives. But today’s report pointed to differing economic policies between Edinburgh and London as a key concern.

Investments made by the UK government are focussed on “pure economic growth”, while the Scottish Government 2015 champions the concept of “inclusive growth” which seeks to reduce inequalities across society.

“There is a ‘tension’ between these two objectives,” Scotland Office minister Lord Duncan told the committee in evidence.

The Deal Or No Deal report said this is among the issues which must now be addressed “as a matter of urgency”.

The MSPs said: “There is a danger that the often confused and cluttered policy landscape at local government, Scottish and UK levels runs the risk of reducing the impact that can be achieved from the deals.

“At present, there are too many overlapping and competing initiatives and a mismatch between the objectives of local government and of the two governments.”

Further deals are planned for Stirling and Clackmannanshire and for the Tay Cities, as well as regional deals for Ayrshire and for the Borders.

The report said the committee was “not convinced” about the selection process for projects to be taken forward as part of the deals, calling for guidance “that provides for a clear, standardised, pan-Scotland system for evaluation”.

MSPs called for “more sustained evidence that engagement with local businesses, the private sector more generally, charities, community groups and local people is meaningful and not just a means of informing people after decisions have been made.”

It is also “not clear” how remote or rural areas would benefit from the partnership, according to the report.

It added: “Whilst we understand that there are great gains to be made in our major urban conurbations, this cannot be at the expense of other towns in Scotland, some of which are larger in population terms than some of our cities, or of our more remote and rural areas.”

City Deals were introduced in England in 2011 to encourage local economic growth and move power from central government to the regions.

Scottish Government Economy Secretary Keith Brown said the deals are just one of the levers it has to boost the economy.

He said: “We are focused on improving the economic prospects of every region in Scotland and will work to ensure that all areas benefit from Regional Economic Partnerships, which provide opportunities for local communities and businesses to engage in regional economic planning and development.”

He insisted the deals “represent an important opportunity for inclusive economic growth and to forge new collaborations between the Scottish Government, the UK Government and local authorities and their regional partners”.

A UK government spokesman said: the UK City Deals “have brought, and will continue to bring, significant investment into Scotland, supporting local priorities and strengthening the country’s economy by driving productivity, wages and growth.”

He said the government is committed to delivering the deals for Scotland’s cities, to which it has contributed more than £1 billion of investment, and is also committed to a Borderlands Growth Deal and in talks for two further city deals in Scotland.

He added that the government would continue to work with the Scottish Government and local partners as further proposals develop.