Aberdeen City Region Deal - weekly progress update 25 January 2016

Aberdeen City and Aberdeenshire councils submitted a detailed proposal to the UK and Scottish governments in December 2015 in an effort to secure an Aberdeen City Region Deal, to create a better economic and social environment, not only for the north east but also for the nation as a whole. Following positive developments last week in the pursuit of this deal, we are hopeful of an announcement outlining full details of this welcomed investment shortly.

Both the UK and Scottish governments made supportive comments in the media.

The First Minister of Scotland, Nicola Sturgeon confirmed that the Scottish Government would fund the deal on a 50:50 basis, paving the way for massive investment in innovation, digital connectivity and infrastructure across the region:

The First Minister said: “As you know, our respective officials have been discussing City Region Deals for Aberdeen and Inverness. I welcome this engagement and the opportunity to support each of our city regions to make an optimum contribution to both the Scottish and the UK economies.

“Given the current situation in Aberdeen, with significant private sector job losses announced in recent weeks by the oil and gas industry, it is vital that Government sends a strong and unequivocal signal that it is fully supportive of the region’s position as a global oil and gas hub. The city deal provides a good opportunity to signal our respective governments’ support for the region. Against that backdrop, I am supportive of moving as soon as possible to agree the Aberdeen city deal.

“Proposals include plans to consolidate the region’s global reputation in the oil and gas industry. A new innovation hub will support Aberdeen make the transition from an operations base to a global centre for technology and R&D investment and anchor the oil and gas industry as a major success story for the Scottish and UK economies now and in the years to come. This deal will also pave the way for diversifying the economy, building on existing strengths in biopharmaceuticals, agri-food and drink.

“Digital connectivity, supporting the Nigg Harbour expansion, investment in housing and transport will also all play an important role in supporting and growing the economy of Aberdeen city region for the future. Key industry players, led by Opportunity North East, have endorsed these proposals as the surest way to secure the region’s economic future.

“As was the case with Glasgow and the Clyde Valley, I am prepared for the Scottish Government to fund the deal on a 50:50 basis and to work with you, as a matter of urgency, to bring this to fruition. As a sign that both ourselves, your government and the local councils are doing all we can to address the issue, proceeding to a tri-partite agreement as soon as possible would be welcome.”

Following the First Minister’s statement, Secretary of State for Scotland, David Mundell said: "UK City Deals are a UK government initiative to target significant investment to boost local economic growth. We have seen already how effective they are in cities and communities right across the UK.

"The UK government has been leading discussions with the Scottish government and other partners on a UK City Deal for Aberdeen. We are committed to doing all we can to support the oil and gas sector and the wider north east economy.

"I am delighted that the Scottish government has committed to join us in contributing funding, adding to that already pledged by the UK government. We expect to be able to announce the full details of the Aberdeen City Deal shortly.

"This is an excellent example of the UK and Scottish governments working together for the benefit of Scotland."

In response to the UK and Scottish governments indicating that Aberdeen City and Aberdeenshire councils can expect official confirmation of a City Region Deal in the near future, Aberdeen City Council Leader, Councillor Jenny Laing, said: “We have always felt that we had a very compelling case for a City Region Deal for Aberdeen and it is encouraging to hear the positive supportive comments from the Secretary of State for Scotland and the First Minister.

“Our officers have been working closely with our colleagues in Aberdeenshire, the private sector and the UK and Scottish governments and have held joint negotiations on detailed proposals for investment in innovation, internationalisation, digital connectivity and infrastructure.

“Aberdeen has long been recognised as a key driver of the Scottish and UK economy, but the downturn that we are currently experiencing in the oil and gas industry has brought the need for intervention from all three levels of government into sharp focus.

“We believe the City Region Deal will help to secure the long-term future of this area and ensure Aberdeen continues to contribute substantially to UK Plc for decades to come. We have been aware that a decision was imminent, and given the statements made today, we look forward to financial details of the contributions from both governments being announced at the earliest opportunity.”

Aberdeenshire Council’s Co-Leader Cllr Martin Kitts-Hayes added: “The First Minister’s comments are a very welcome development. The Aberdeen City Region Deal will play a vital role in supporting the economy of the North East of Scotland and recognises the wider benefits that the oil and gas industry brings to the rest of the UK. We have made a compelling case and a collective vision for the region which has the widespread support of the private and public sectors and academia.”