Empowering Scotland's Cities

As Chair of the Scottish Cities Alliance, I was delighted to play a part in the "Cities Convention" meeting earlier today, up in Perth - some background detail can be found here ...

... and the actual "Empowering Scotland's Cities" discussion document can be accessed in full, via this link.

And below, for those interested, is the full speech note of my contribution at today's opening session:


Empowering Scotland's Cities

Good morning again colleagues – can I start by saying it’s great to see so many delegates present this morning; and looking at the delegate-list it’s particularly impressive that we’ve got such a wide geographical spread ... from right across Scotland ... in the room today.
 

And I would like to start my contribution by saying thanks to all the Scottish Government staff who have helped make today a reality.

As Eddy mentioned when he introduced me earlier – I’m currently the Leader of the City of Edinburgh Council ... but I’m primarily here today as the Chairperson of the Scottish Cities Alliance.

The Cities Alliance has a focus on  empowering Scotland’s cities - and their respective regions - in order to delivery prosperity and tackle inequalities throughout our country. It’s an Agenda, I’m pleased to say, the Scottish Government wholeheartedly shares; and we work in very close collaboration with the Government – and it’s great to see so many Government Ministers here this morning.

... and in essence, I’m acting today as the spokesperson for Scotland’s Seven Cities --- and the Scottish Cities Alliance is the collective voice of Aberdeen, Dundee, Edinburgh, Glasgow, Inverness, Perth and Stirling.

And I’m delighted that all of the 7 City Leaders are here today – myself from Edinburgh; Frank McAveety from Glasgow; Jenny Laing from Aberdeen; Ken Guild from Dundee; Margaret Davidson from Inverness; Johanna Boyd from Stirling; and last but by no means least – the Leader of the City we’re meeting in today – Ian Miller from Perth.

And colleagues - those seven cities account for 2.8million people in Scotland – well over half of the country’s population

They generate over 60% of Scotland’s overall economic activity ...

... and account for nearly 55% of all employment in Scotland.

And the cities – all seven of them – are growing in size ... and by 2030, a full two-thirds of Scotland’s economic activity will be in our 7 cities. 

Now – I would say this wouldn’t I ... but I was relieved to hear John Swinney agree earlier ... Scotland’s Cities really do matter to our Nation.

It really is in everybody’s interest that we get policies, relating to our cities, right. 

Thankfully, I know the current Scottish Government ‘get this’ ... and indeed I believe all of the main political parties in Scotland are increasingly recognising the crucial role that Cities, and their regions, play in Scotland’s economic fortunes.

And the Scottish Cities Alliance believes that for the best possible economic outcomes – we do now require a real step change in the way we do things.

Historical ways of working need to be challenged; and we do need to look at innovative approaches to allow cities and their regions greater control of local issues; greater fiscal autonomy and freedoms to help create jobs and sustainable economic growth; and the flexibility to deliver services that are city and region specific. 

We feel – very strongly – that we need greater local control over issues such as Council Tax, Business Rates, Land and Property Transaction Tax ... while also being in a position to generate local taxes where appropriate and where we can demonstrate the benefits this would deliver. 

And I’m going to take a bit of a risk here Eddy and dangerously stray into constitutional issues --- no matter what your view is on the issue of Independence (or not) ... hands up if you feel it’s right that some additional powers are transferred from the Westminster Government at a UK-level; to the Holyrood Government at a Scottish-level.

I’d say Eddy that that’s an overwhelming majority of people in the room today who feel that it’s right to see powers moved to a more local and appropriate level ...

... and, in a nutshell, that is all the seven cities are arguing for; for themselves – some freedoms and powers to be moved to a more local level from the Holyrood Government to the City Hall.

Now we don’t have to agree on the absolute detail of which specific powers --- most of Scotland doesn’t agree on what’s being transferred from Westminster to Holyrood! ... and I suspect not everyone in the room will agree with a complete list to be transferred from Holyrood to Scotland’s City Halls ...

... but that agreement on every detail – for me – isn’t absolutely crucial; as long as we can accept the principle of transferring some powers to give Cities more freedoms.

And there is a simple reason why we – Scotland’s seven Cities – believe this would be a good thing to do.

Currently, cities and their regions face a potential financial disadvantage by creating growth in their own local and regional economies. This is because local budgets don’t relate directly to local economic success. A successful local economy attracts more people to live in the area but this leads to greater demand on services without the necessary finanical support. Retention of a greater share of taxes to the growing locality would help alleviate this problem; allow investment in necessary infrastructure and skills to encourage further growth; and benefit Scotland as a whole.

Of course there will be those that argue we already have these powers and there is no real need to devolve further decision-making

And there is no doubt that we are currently a successful country; and we have made great strides over the past 20-years --- but we need to push on, and quickly.

In our city region, Edinburgh, the Lothians, Birders and Fife ... a region that many assume is relatively wealthy ... we have 21% of children living in poverty. We also have 24% of the population living in fuel poverty.

In 2015 - this is frankly unacceptable for a region that boasts 47% of the population educated to degree or equivalent level; a city that is the second most prosperous in the whole of the UK; with some fantastic recent success stories, including being home to two tech companies now valued at over $1bn each, Skyscanner and FanDuel.

And all our respective 7 City Regions could provide similar evidence of quite wide disparities of wealth, education and general well-being.

That is why the seven cities are making 5 key asks of the Scottish Government in the Discussion Document we’re launching today – which is in your delegate packs – and is entitled ”Empowering Scotland’s Cities”.

This discussion document is essentially our pitch – our bid – into the welcome refresh of the ‘Agenda for Cities’ that the Scottish Government is currently consulting on – Scotland’s cities were key partners in developing the first ‘Agenda for Cities’ (basically – cities policy) back in 2011; and we’re very keen to play a constructive role in the refresh of that agenda as we approach 2016.

And the 5 key asks, in our document, are: 

1.  Control over decisions relating to key infrastructure projects. This could include- for example - transport, water, skills, health and local economic development

2.  Passing on to local areas all of Non-Domestic Rates and a proportion of the fiscal retention to be granted to the Scottish Parliament by the current Scotland Bill

3.  Freedom to raise local taxes

4.  A commitment to the continuation of support to progress City Deals and City Regions Deals in Scotland.

5.  The allocation of dedicated national resources at a city region level for inward investment.

Of course – and I think it’s really, really important to stress this point - this would not be one-way traffic.

In return, Scotland’s seven cities would: 

1.  Ensure Scotland’s cities became increasingly recognised and desirable places for capital and foreign direct investment.

2.  Work more closely with the private sector on joint investment and long term growth and productivity

3.  Ensure that Place-making is at the heart of development

4.  Promote Greater community involvement and responsibility for shaping localities, including allocation of budgets.

5.  Help ensure that there ia Greater partcipation in local democracy

6.  And fundamentally, the reduction in inequality. I mentioned some figures earlier from my own region that is worth reiterating – 21% of children living in poverty. 24% of the region living in fuel poverty. It is essential that we tackle these sorts of issues and greater local control will allow us to really get to grips with these problems. 

Through our region’s work on our City Region Deal with the Scottish and UK Governments I’m pleased to say I believe we are pushing at an open door.

Glasgow was the first Scottish city region to agree a deal in 2014 which outlined an ambition to unlock investment of up to £1.2bn. Aberdeen, Inverness and Edinburgh have this year submitted City Region Deal proposals which have the potential to unlock up to £4.2bn of investment. 

All of this isn’t a case of seeking greater control just for the sake of it. And I think it’s crucial to stress that we are not promoting necessarily more or less taxation and spending.

What we do want to see happen is for decisions to be made locally – for communities to decide on issues affecting them, which can deliver greater efficiencies, reduce dupliations and generate better outcomes. 

This is not to say that we are not aware of the need for national grant support to equalise variable local tax bases; variable costs of providing services; and variable patterns of need and demand.

However, there is growing evidence that decentralising systems of government, can deliver better outcomes both economically and socially. 

In March 2014, the Council of Europe reported that the main area of economic concern for the UK was ‘the financial resources of local authorities, their limited taxation powers and their dependence on government grants’.

Certainly, when you compare us to other countries we are very much the poor neighbour.

According to Audit Scotland, revenue directly raised locally, amounts to only 17% of local public expenditure in Scotland’s cities; while in other developed countries it is three times that of our own. In Germany, for example, local government areas raise on average approximately half their budgets (50% not 17%) from local taxes on incomes and business profits.

Our cities have the potential to deliver so much more but ...

... and this really isn’t a Party-political point – it’s a democratic-point - the nature of our systems of government mean we are currently unable to realise our full potential. 

And worryingly we are currently seeing our competitor city regions in England move to a more decentralised model --- and there is much evidence to demonstrate that more decentralised systems of government are associated with higher national growth.

So Eddy – in conclusion - in order to deliver thriving local economies that can also improve peoples’ lives --- cities and their regions need a bit more control of their own destiny. We’re not asking for the moon here.

And finally – whilst everyone in the room may not agree on every detail of the document we’re launching today - I really welcome the opportunity I have had this morning to speak to you on behalf of Scotland’s Seven Cities, and their respective regions; and to outline the opportunities that we believe are potentially available to us.

And I also really welcome the Scottish Government’s willingness to listen to this debate ...

... and I’m looking forward to hearing what comes back from the break-out sessions later.

I do believe – and Scotland’s seven Cities believe – we have a real chance here to fundamentally change the relationship between councils and citizens ... and to deliver a more prosperous and fairer Scotland for us all.

Many thanks for listening.