22 Aug 2014
A City Deal has been signed for Glasgow and we at the Chamber are very pleased about that. On Thursday I took the opportunity to welcome the £1.13billion of economic development investment that comes with the deal on the BBC's Good Morning Scotland because this is a genuinely impressive achievement.
Bringing the eight local authorities of Glasgow and the Clyde Valley, the Scottish Government and the UK Government together to make such a substantial investment is no small task, not least in the midst of a vigorous referendum debate. That achievement is very substantially Gordon Matheson's.
The Chamber's Council of Directors formally agreed its support for a City Deal for three reasons.
Firstly the Deal brings additional money to Glasgow purely for economic development. It provides a clear financial incentive for the local authorities across Glasgow and the Clyde Valley to invest in projects to grow the economy and provide jobs.
The estimates would be an additional £2.2bn of economic output, 29,000 jobs and around £3.3bn of associated private business investment. Local authorities currently don't have a short term financial incentive to make these investments.
Previously, none of the additional tax receipts from successful economic development - income tax, VAT, corporation tax - went to the local authorities. It all went to the Treasury. Now the local authorities will get a share of those tax receipts.
Secondly the Deal encourages the local authorities to work together to support economic growth and employment for the whole City Region. The true economy of Glasgow doesn't lie only within the city boundary - rather it's the travel to work area which largely equates to the eight local authorities from South Lanarkshire through to Inverclyde.
Now the local authorities have a real incentive to work together to achieve economic growth for the whole of Glasgow and the Clyde Valley.
Thirdly the Deal involves some stiff disciplines in choosing the projects in which to invest. We know that a lot of work has gone into developing the process for project selection, including advice and guidance from KPMG.
The projects will have to show that they will grow the economy and create jobs and there will be an independent Urban Growth Commission reporting on whether they are delivering. That means the quality of the projects will be properly tested.
Of course we are also happy that there are many projects now set to be funded that the Chamber has paid close attention to over the years. Achieving a rail connection to Glasgow Airport is not surprisingly at the top of our list as the Airport is still hugely over-dependent on the congested M8. Getting the tram/train option set out in the recent joint report from Transport Scotland, the Airport and Glasgow and Renfrewshire Councils would be a big step forward.
But we are also pleased to see in the list of potential projects a package of investment in Glasgow City Centre which will help to deliver the City Centre Strategy which the Chamber has actively supported.
Welcome too would be investment to continue the successful regeneration of the Clyde Waterfront which I blogged about last month.
And we will also be welcoming opportunities to invest in business facilities around Glasgow Airport, at the newly-named South Glasgow University Hospital and to expand facilities atGreenock Ocean Terminal where a growing cruise liner business is based.
The role of an expanded Glasgow Economic Leadership Board in providing strategic economic advice is a feature of the Deal win which we will continue to have a close interest.
We have always believed that business should have a strong role in helping to shape the economic strategy for the city. The Deal proposes to strengthen the connection between business and all levels of Government in supporting the growth of the city's economy.
The City Deal now opens up a new phase in Glasgow's development. Well done to all involved.