The Importance of the City Region Deal to Aberdeen

Yesterday morning I had the pleasure of attending the Aberdeen Chamber of commerce business breakfast having been invited by John Sim of Aberdeen Journals to attend. I’ve been following the progress of the city deal closely, particularly as the economic downturn has taken grip, and see it as an opportunity for the North East to embrace its future enabling development and progress regardless of how the oil & gas industry plays out over the next 20-30 years. The city region deal should be viewed in parallel to oil & gas development as it seeks to revolutionise the industry through technological advancements ensuring economic viability for a prolonged period of time. This is only part of what the deal offers though which proposes upgrades to transport connectivity, affordable housing, city centre regeneration, digital connectivity, the dockside, strengthening international ties, developing and retaining skills as well as creating a centre for innovation. The deal obviously asks for a lot but we as a city have a great deal to offer Scotland and UK as a whole. If you consider for a moment that 45% of Scotland’s top 20 companies are located in Aberdeen then you immediately understand how much of an economic powerhouse Aberdeen is nationally.

Anyone who lives, or has lived, in Aberdeen is intimately aware of the chronic lack of investment suffered by the city for the last 35 years. Infrastructure being the main candidate for neglect, experienced every morning as we travel to work using the clogged arteries often referred to as roads. If our roads are clogged arteries then that Haudigan roundabout is coronary heart disease waiting to pack in. The neglect of transport links, non-development of our airport and lagging technology infrastructure are yet further examples of the areas crying out for modernisation and investment. The city region deal then offers an opportunity to redress the balance while preparing the city for growth through the provision of services leading to increased revenue and thereafter taxes. Digital infrastructure is essential. For all of our business success Aberdeen is ranked 61st of 63 across the UK For broadband speed which is a shameful indictment of the lack of development. At best this is serious impediment on the growth and development of tech companies in the region at worst it has forced our technology talent to other cities. Development and investment is the only way the needed cathartic release can be obtained.

Aberdeen has ultimately been a victim of its own success. The affluence of the area and ease of access to high paying work in the oil and gas industry has acted as a vacuum to the cities other industries and areas of leadership. Whether the previous leadership of local governance has suffered due to this vacuum removing viable candidates and talent who may have excelled in political roles is pure speculation but has often been suspected. What isn’t speculation is that Aberdeen has often suffered a crisis of identity in the council. Infighting and political one upmanship has resulted in numerous terms where nothing was ever achieved and the deterioration of the city and services were presided over. Whatever your views of the union terrace gardens proposed development were you’d be hard pushed to argue the point that what transpired was anything other than a laughable episode more akin to an only fools and horses sketch. 

The question perhaps left unanswered from the breakfast relates to whether the financial struggles we are facing hinder or improve our chances of success. I would confess naivety towards the criteria on which awards are made but it seems Aberdeen requires a leg up more now than at any period of economic prosperity in the past. My only worry would be if the deal if judged on a ‘what have you done for me lately?’ approach where tax reductions etc. have already been implemented to try and stimulate the local economy then the government may believe they have done enough. This would be a grossly disproportionate reaction which ignorantly misses the point: The Oil & Gas industry has thrived in spite of the negligence to the development of the city and region.

So what are the proposals of the city region deal? In short they are broad, far ranging and cover almost every area of the city and shire area including the provision of  up to ￡2.8billion across the 20 year period. They are:

Housing – a request for support to unlock constrained sites to supply housing land, affordable housing funding and measures to help solve housing cost issues.

Connectivity – rail service improvements, including acceleration of planned upgrades to infrastructure and more local services; plans to deal with congestion issues; and improved harbour and airport connections.

Innovation – development of both an Oil and Gas Technology Institute and a Scottish Centre for bio pharmaceuticals; promotion of the region as a global centre of excellence in the field of renewable and hydrogen technologies research; and the creation of a Digital Offshore Data and Systems Centre.

Internationalisation – projects supporting international trade, the renewables industry, tourism, trade and investment, inward investment and export support.

Even if the region deal is approved it is no way a 20 year golden handshake as some people have surmised. At its very core it's an ongoing process which is rigorously and continuously assessed and if targets aren't being met it will be curtailed. Local governance then holds an incredibly important role in this process in that if it does go off course corrective action is a pre-requisite of continuation. Are they strong enough to do so and do they have the leaders in place to make unpopular decision for the collective prosperity of the city? Will the public, private and government sectors be capable of collaboration? Only time will tell but these elements are the essential necessities for the success of the deal. The private sector in particular must work hand in hand with the government to develop a strategy which takes advantage of the opportunities afforded. It is essential the areas of the city region deal are  the correct areas which stimulate business grow and not those wants which have been put on a shelf waiting for funds for completion. The success of the deal will be measured by the increase in GVA (gross value added) and if there is no noticeable increase due to the wrong areas having been chosen, again, the deal will be curtailed.

I would urge businesses and individuals a like to get behind the city deal in any way they can, collaborate more and to help one another. If we strive for this then we stand the greatest chance of success but importantly if we miss we will have a city better connected and working together towards the collective and continued success of the region.

The city region deal must be revolutionary simultaneously repositioning Aberdeen as an international technology and operations base in the face of depleting markets for the oil and gas industry, provide a platform for the continued growth of our world leading Subsea engineering while meeting the needs of the city in all the areas noted above out with oil. The long term success of the city could depend on it. No pressure then…

#BigIdeas2016