Will City Deals Deliver Growth for Scotland?

The long-awaited announcement of a new city deal for Edinburgh and South East Scotland has been welcomed across the region, but are the city deals likely to be game-changers for the nation as a whole?

Scotland is now home to four city deals, with agreements in place for Glasgow, Aberdeen, Inverness and Highland and now Edinburgh and South East Scotland. A number of additional city deals also remain in the pipeline, including potential deals for Stirling, Tay Cities and Ayrshire. The deals are characterised as game-changers and there is keen expectation about the economic results they are likely to deliver, not just for the cities, but well beyond their hinterlands.

Scottish city deals are following a distinct pattern, with funding being allocated specifically to support innovation, housing, infrastructure and skills. Edinburgh and South East Scotland could receive over £600m in funding from Westminster and the Scottish Government. It marks a similar pattern of investment in Glasgow, Aberdeen and Inverness. Glasgow received half a billion from both the Scottish Government and Westminster, as well as a specific fund for innovation. Similarly, Aberdeen received some £250m as part of the wider package deal amounting to over £800m over the next ten years. In each case, there is an expectation that they will deliver significant GVA growth and boost the regional and national economy.

Innovation – Funding is being channelled into infrastructure upgrades, along with the creation of new innovation centres. These new innovation centres, taken across the nation, will now mean that Scotland could host major new centres on topics like robotics (Edinburgh), health and life sciences (Inverness), oil and gas technology (Aberdeen) and imaging (Glasgow). These are being combined with a wide range of hubs and spin-out centres to help foster both further innovation and commercialisation.

Transport – The city deals provide significant capital funding that will be used to unlock some of Scotland’s major congestion hot-spots. Under the current plans, funding should now come into place to invest in the East Link and Longman Interchange in Inverness, and the Edinburgh City Bypass will see a significant investment to create a new flyover at Sheriffhall roundabout. However, while these interventions will help alleviate congestion, real growth is much more likely to be delivered by national funding on schemes like the A9 upgrade, EGIP and the Aberdeen Western Peripheral Route. The city deal funding is not only limited to road upgrades. One of the largest single investments is in new harbour facilities at Aberdeen, and Inverness is looking at an air access scheme.

Me too? – With the announcement of the latest city deal, those on the waiting list will be keen to ensure they don’t miss out. Stirling is eager to develop its riverside quarter, while the Tay Cities deal looks to develop Dundee’s expertise in oil and gas decommissioning, among other projects. But not everywhere is focused exclusively on city deals. The Northern and Western Isles have opportunities through the devolution of further powers, while the South of Scotland is in line to gain its own enterprise agency. All of these initiatives look worthy and could make a real difference. However, siloed regional projects will only benefit the economy so far, if Scotland as a nation is to reap the full rewards of these deals there must be coordination between regions too.

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