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January 28, 2020

Splashing the cash in a dash

When news of the City Deals first appeared in the press, it was notable for two reasons. One was the sheer scale of the proposed spending and the other was the absence of any great brouhaha about the announcements – as if funds on this scale – £5.2 billion – were an everyday occurance. But the truth is this sort of additional funding is pretty rare and so one might expect that serious consideration would be given as to how to spend it. And that is precisely what appears not to have happened, at least according to a recent report from the Accounts Commission.

Tom Gordon. The Herald

Billions of pounds are being poured into Scotland’s cities and regions without clear goals or checks to ensure value for money, public finance watchdogs have warned.

The Accounts Commission and Auditor General for Scotland said high-profile City Deals and regional growth deals worth £5.2 billion lacked transparency and bypassed local communities.

Chances to align the projects with the Scottish Government’s policy goals had probably been missed.

The long-term projects were also threatened by budget cuts across Scotland’s councils, which supply many of the key staff involved.

In a new report, the watchdogs urged the Scottish Government and councils to set clear aims, clarify lines of responsibility and explain their financial planning. However, the report also found benefits from the deals, which are still in their early years.

The Scottish Greens said it showed the current system was “opaque and directionless”. The Scottish Government accepted the findings of the report, and pledged to reflect on them in conjunction with the UK Government and local authorities.

The UK Government introduced City Deals in 2011 as a way of spurring long-term economic growth in councils and regions.

In Scotland, four deals – Glasgow City Region, Aberdeen, Inverness & Highland, and Edinburgh and South East Scotland – have been signed off, with eight more in development.

In total, the deals involve £5.2bn committed over 20 years from the UK and Scottish Governments, councils and partner organisations such as business and universities.

Most of the money will go towards transport infrastructure, as well as centres of excellence for business, skills training and academia.

Auditors found the deals had enabled projects that might otherwise not have gone ahead, and been a catalyst for collaboration between councils and their partners.

However, despite the huge sums involved, there were also basic flaws in the system.

The report said that, five years after signing the first deal, SNP ministers had still not set “clear objectives or outcomes for the deals programme”, or explained “how it will know if deals are value for money”, or if they will help deliver the Government’s own goals.

It said: “Opportunities to maximise the impact of deals on Government priorities may have been missed,” it said, although it noted that later deals were better aligned with policy.

But a lack of transparency and public data meant it was “not clear why some projects are selected and approved for funding and others are not”, and made scrutiny harder.

Local communities had “very little involvement” in the process, and accountability was “untested”, with uncertainty about what would happen if a partner failed to deliver.

There was also a fear that “shortages of staff, money and skills across councils are risks to the successful delivery of deals”.

The report concluded: “There is a need to clarify what the overall programme of City Deals is expected to achieve, how individual deals will take account of national and local economic development priorities, and to provide more information on the funding of deals.”

Auditor General for Scotland Caroline Gardner said: “The Scottish Government needs to show how it will measure deals’ long-term success and work with councils to improve transparency around the approval process for individual projects.”

Accounts Commission chair Graham said: “City Deals have had a positive effect across Scotland, strengthening relationships between councils, government, business, our universities and other partners.

“It’s early days, but it’s important lines of accountability for deals are now made clearer and that the right staff are in place.”

Labour MSP Colin Smyth said: “While investment from growth deals is welcome and badly needed, the process for developing deals is ad-hoc, negotiated in secret, with little input from local communities.

“Why certain projects are chosen over others can be a mystery. It’s also clear investment in growth deals does not compensate for Scottish Government cuts in council budgets.”

Scottish Greens co-leader Patrick Harvie said: “While it would be hard to spend £5.2bn without some kind of positive impact, this troubling report reveals just how opaque and directionless George Osborne’s City Deals have turned out in Scotland.

“No doubt some worthwhile projects have been funded, but in many places old proposals that just never made sense have been dusted down and given the green light.

“This report should be a wake-up call to the Scottish Government. Scotland’s city and region deals need to stop financing failed old models of city planning like bypasses and flyovers and be re-profiled to prioritise efforts to lower emissions and build the sustainable, inclusive cities of the future.”

The Scottish Government said it welcomed the report’s comments on “the positive effect” deals were having, including “strengthening relationships between councils, government, business, universities and other partners.

A spokesperson said: “The Scottish Government’s commitment to deals now exceeds £1.8bn and we are already taking steps to improve how we measure the long term success of our deals programme.”