Deals Galore for Cities

Deals Galore for Cities

Last week’s first and last Autumn Statement by Philip Hammond, Chancellor of the Exchequer, had a silver lining in the grey clouds of austerity for the City of Stirling and Clackmannanshire (and a host of other places), when the keenly-awaited confirmation that a City Deal had been struck between the Treasury, Scottish Government, Stirling and Clackmannanshire Councils.

The City Deal is predominantly a capital infrastructure plan funded equally by the UK and Scottish Governments, with the two local authorities chipping a bit too. So, you can expect more buildings, better transport links and the opportunity to grow the local economy.

The original City Deal in Scotland was the politically-motivated Glasgow (and surrounding councils) plan sprung on the Scottish Government by George Osborne at the Treasury and Gordon Matheson in Glasgow City Chambers. They put up roughly £600m and challenged John Swinney to join them in putting Glasgow first. Naturally, the SNP government called their bluff and put up the cash to make it happen – not that the Scottish Government ever receives any credit from the Labour administration for this investment.

There are now City or Growth Deals agreed or in planning for: Greater Glasgow; Aberdeen City Region; Stirling & Clackmannanshire; Tay Cities; Edinburgh, Lothian, Borders and Fife; Inverness; and Ayrshire. The commonality being that capital investment will spur economic development, just as it helped Scotland weather the worst of the recessionary excesses between 2008 and now.

However, what strikes about these Keynesian projects is that they are being planned within an economic environment of the status quo. There are worries about skills gaps in hot spots like Edinburgh but little has been factored in for the Brexit impact.

Already, employers are raising fears that its EU workforce is nervous and if not contemplating a return home, may be forced out by UK immigration policy as more Tory ideology is put into practice.

Albeit this was from an England & Wales NHS Providers survey, views expressed included: “Brexit has caused drying up of recruitment from the rest of Europe.” Increasingly there is a widespread worry about the NHS’s workforce to the extent one local NHS chief admitted the potential skills departure “concerns me more than the money”.

Translate that into the 15% of higher education researchers and teaching staff who are not UK citizens, the significant pool of immigrant workers in the tourism and hospitality sector and the general ignorance of the role of immigrant labour in many other sectors, it doesn’t take a genius to work out that instead of economic growth we could be faced with skills shortages to the extent it has significant economic, social and financial impact on key public and private services.

Now many will say that this a magnificent opportunity to get the idle workshy into these job vacancies that are likely to occur. Again, the ignorance of how the labour market works would appear to know no boundaries. Many of our highly skilled jobs take years of training and experience to fill. The entry-level roles in food service, retail and hospitality have been available for decades and Scots – young and old – have turned up their noses at such positions.

I can hear the Tory right demand that unemployed people are forced to take them up. Well you might be able to take a horse to water but… Others claim that the employers in those sectors should up their game: increase wages, improve working conditions, etc. How will this be paid for? Well increased prices of course. So the cost of coming to Scotland increases relative to other destinations and the domestic market is priced out of weekend breaks, never mind longer staycations.
Now City and Growth Deals are starting to sound like opportunities for standing still rather than any inclusive growth going forward. But that is the Brexit payback for taking control, isn’t it?