Today’s report reviews the development of city region and growth deals and their progress so far in enabling economic development. Four city region deals have been signed to date, with a further eight in development. So far, £5.2 billion of funding has been committed from the United Kingdom Government, the Scottish Government, councils and other partner organisations.
City deals were first introduced by the UK Government in 2011 as part of its policy to devolve powers to local regions. In 2014, the UK and Scottish Governments announced the first deal in Scotland, which involved councils and partners in the Glasgow city region.
The Scottish Government’s decision to introduce deals in Scotland was in line with its existing policy on cities and economic growth. However, at the time, it was not clear how the programme would contribute to existing economic development policy, and clear and measurable objectives for the programme were not established.
The deals represent a long-term funding commitment and bring additional money for regional economic development. They have enabled economic development projects to go ahead that might otherwise not have happened. The deals have also been a catalyst for increased collaboration and joint working. Councils are not only working together more closely with neighbouring councils but establishing valuable partnerships with local businesses, universities, the third sector and other external organisations.
Securing a deal can be a lengthy and complex process. It is not clear why some projects are selected for deal funding and others are not, and communities have had little involvement in the deals. Those factors limit transparency and the ability to hold public bodies to account for their deal-related spending.
All individual deals include output measures, such as the number of new jobs that have been created. However, five years after signing the first deal, the Scottish Government has not yet set out how it will measure the long-term success of the programme, how it will assess whether deals are achieving value for money or how the programme will contribute to the outcomes in the national performance framework, which means that opportunities for deals to contribute to the national performance framework might have been missed.
There are also risks in relation to the capacity of councils and their partners to deliver deals against a challenging backdrop for the public sector. Governance arrangements continue to evolve, and it is important that such arrangements are kept under review to ensure that they remain clear and effective.
As always, the team and I are happy to answer the committee’s questions.