Share

Government Proposals

- August 2011

Cabinet secretary on what’s ahead for the North-east

The new Scottish Government recognises the North-east as a powerhouse of the economy and will do everything possible to ensure it reaches its expansion potential, according to Alex Neil, Cabinet Secretary for Infrastructure and Capital Investment.

In an interview with Business Bulletin he also expressed the belief that the area can benefit enormously because the SNP Government is no longer held back by the lack of a parliamentary majority and the role of the Scottish Futures Trust – which has a £2.5 billion investment programme through the NPD (non profit distributing) model – can be expanded.

In this newly created portfolio the experienced politician, who has been an MSP since 1999, has overall responsibility for housing, transport, the digital strategy, European Social Funds, the Scottish Futures Trust and procurement and related matters, including regeneration and fuel poverty.

It’s a major portfolio which will allow him little spare time but he explained the rationale for giving him such a comprehensive range of responsibilities.

“It was felt there was a need to put together a portfolio which took a very strategic approach to the development of infrastructure and capital investment against a background  of public sector financial constraints so that we look at new ways of trying to sweat our assets, to try to get more money squeezed out of the system so we can do a lot more despite the budget cuts imposed from London.”

He said he was committed to ensuring the North-east receives its fair share of funding.

“The investment going into our portfolio across the North-east is already very substantial,” he said.

“Obviously in terms of scale the Western Peripheral Route investment is a huge project. Unfortunately at the moment it is delayed in court but once that process is complete I am hopeful we will be able to move ahead.

“On the housing front we have made a substantial investment through Grampian Housing Association and indeed through the wider housing association movement in the North-east. Grampian Housing Association, for example, has been very innovative in its approach in bringing together different types of tenure within single projects.

“We have also been heavily involved in looking at a TIF –project (Tax Incremental Funding) for the Aberdeen area and the North-east has been benefitting from the investment through the Scottish Futures Trust schools programme.

“The area has been tendering for the new Innovation and Investment Fund as well (£50 million for affordable housing developments). I can go on and give many examples of where the North-east is benefitting enormously from investment funded by or contributed to by the Scottish Government.”

He hinted that early improvements to the A96 could be on the cards.

“We are looking at the long term transport improvement programme and investment programme and obviously one of the things we will be looking at in the three year spending review coming up is what other projects require prioritisation in transport.

“I can’t be more specific than that but one of the things we are very keen to do as the money becomes available is improve the A96 between Aberdeen and Inverness. We think the linkages between those two cities are very important in helping to stimulate the economy of the North-east and right across that coastline.”

He highlighted the major role which the North-east potentially has in the developing renewables sector and said that with a considerable focus on offshore wind in the next investment phase the area was in a prime position to benefit, as it will also be in wave power and tidal power

“In terms of investment opportunities in various alternative green energy sources I would have thought the North-east is well placed to take advantage.”

Mr Neil said there could well be emerging opportunities for the area through European Structural Funding which has, until now, been directed towards areas of high unemployment.

“More and more European funds are going to come to the better off parts of the European Union based not on geographical levels of unemployment or poverty,” he said. “They are going to be more thematic - for example expanding research and development. I would have thought, particularly through the University of Aberdeen and Robert Gordon University, the future of European funding available for research and development is an area where the North-east is well placed to benefit.

“There are a number of ways in which the North-east will benefit as a result of the new Scottish Government across a number of portfolios.

“First of all there will be benefits in terms of what we are trying to do with the £2.5 billion of investment in health, education and transport which is being organised and funded through the Scottish Futures Trust. My understanding is that the Scottish Futures Trust is looking at some projects in the North-east

“Also the HUB programme which Scottish Futures Trust is involved in is another area that probably has potential in areas of the North-east.”

The HUB initiative brings community planning partners, including health boards, local authorities, police, and fire and rescue services together with a private sector development partner to increase joint working and deliver best value to save money for reinvestment in the local area.

“We recognise the importance of the North-east economy as one of the powerhouses of the Scottish economy and while oil has another 50 years to go we recognise the importance of diversifying the area’s economy. Obviously as the oil industry changes in character we need to ensure that other sectors develop with growth potential in the North-east.

“We are particularly exercised at the moment with trying to change the Treasury’s mind on the madness of the recent impost in oil tax which is going to cost up to 15,000 jobs which would have been created in the North-east of Scotland.

“The First Minister has submitted detailed proposals to the Chancellor of the Exchequer to find a better way of taxing the oil industry than the very negative and destructive way which was proposed in his Budget.

“We are fighting for the North-east of Scotland in relation to oil and oil taxation, we are investing in the North-east of Scotland in housing, in transport, in other ways and I have no doubt that once we roll out our digital strategy and spending programme the North-east will be a major beneficiary of that as well.

“The role of the public sector in the digital strategy will be to invest in those areas where the private sector isn’t making enough provision and I can think of many areas in the North-east that might qualify under that definition.

“We are very supportive of the North-east economy, we think there is a very bright future for the North-east with the private and public sectors working together and we will do everything we possibly can to ensure that the North-east reaches its expansion potential.”