Wednesday, January 27, 2016

Time to let go ...

Spoke at the 3rd annual City of Edinburgh Council Conference this morning - some details via here ...

... I'll re-produce my speech-note below for those interested ;-)


City of Edinburgh Council Conference

Many thanks for that introduction Euan …
… and good morning colleagues, & can I add my own very warm welcome to this “City of Edinburgh Council Conference” event,
here in the City Chambers.
It’s great to see so much interest in today's 3rd annual Council Conference.

Euan, in the next 15-minutes or so, I want to start today’s proceedings by focusing on 3 main points:
1.   The City of Edinburgh itself
2.   The wider City Region & our Partners
3.   The view from Scotland’s 7 main Cities
& finally; I’ll say a few words about the Future City?
And talking through these 3 areas, I want to make the argument that Edinburgh is approaching a pivotal point in its development; and that a series of key – quite imminent – decisions, will have a crucial impact on our future direction.
For me, these are decisions that cannot be taken in isolation by the Council, the wider public sector, the private sector, or the voluntary sector … the whole City, and wider region, needs to be involved.

So – firstly; starting with the City of Edinburgh itself …
For all of the obvious challenges, there is absolutely no doubt in my mind that 2015 has been another successful year for the Capital City of Scotland.
Edinburgh continues to be a hugely attractive place to live, with an average of an additional 5,000 people choosing to move here every single year – that’s a 1% annual growth, which will soon see Edinburgh reach the half-million population mark.
Very few other UK-cities are drawing anything like this level of population-attraction to them on a yearly basis – and, for me, it still remains the case that Edinburgh’s overall ‘Quality of Life’ is what makes us stand out from the crowd.
And there’s simply no doubt that our local economy is a significant draw as well …
… Edinburgh is still outperforming all of our major UK-competitors; with Edinburgh continuing to rank as the city with the second highest ‘Gross Value Added’ (GVA) per resident, after London.
We also have the lowest claimant rate for Jobseekers Allowance – currently at less than 1.5% - of any major city throughout the whole of the UK.
And Edinburgh today has one of the most talented workforces in the whole of Europe – with 2015 seeing the percentage of the population of the capital, educated to degree level or above, almost reaching 50% for the first time.
And dare I mention that even the tram has had a successful year; with tram patronage increased by some 12% when compared to last year,
and the projected total of 5.1million passengers for the whole of 2015 meaning that the service continues to outperform targets set in the business model.
Turning to 2016, there is no question that the overall economic prospects for the City are positive. But that does not mean we are short of significant challenges; as perversely the success of the City economy does not translate to any direct, additional funding for the Local Authority.
Indeed, we face the double-whammy of an increasing population – with consequential growing demand for our services at both ends of the age-spectrum: more +80 years olds than ever before, requiring more social care than ever before; and more 3-5 year olds that ever before, requiring more Nursery and Primary education than ever before – and the undeniable fact that our revenue-funding is now declining;
… and anyone who noticed the local Council Budget being set last week, will know that these pressures have made for some extremely difficult decisions.
And inside the Council, as is often the case periodically whether in the public, private or voluntary sectors, we are seeing the implementation of a new management-structure; with a new Senior Management Team.
But, being the eternal optimist, these are all constructive challenges to be facing ... challenges of success and growth, not decline and stagnation.
And with a Scottish Parliament election on the horizon in May this year, we may even see the beginnings of a return of some fiscal flexibility to Local Authorities; with a serious debate already raging about the future of the Council Tax and how Local Government generally is currently being funded.
So clearly, there is much to look forward to here in Edinburgh - but also much work to do in the year ahead.
So - moving on Euan – secondly --- what of the wider City Region & our Partners therein …
I’ve clearly mentioned the strengths within the Capital itself …
… but I also absolutely understand the importance of the relationships we have with our surrounding areas of – particularly:
·        East Lothian
·        Fife
·        Midlothian
·        the Scottish Borders
·        and West Lothian
As most – if not all - of you in this room will know only too well, our local economy does not operate on local authority boundaries. We all rely on each other to help ensure the prosperity of our region and its residents.
And over the last year or so; I’ve been delighted to have been working closely with regional colleagues to help develop our city region deal bid.
Whilst we are not all of the same political persuasion, we do understand the challenges - and opportunities - for our region; and the role that a City Region Deal could have in helping to tackle these.
… because, despite the overall positive picture I’ve just painted of Edinburgh – you simply cannot deny that we are a very successful butALSO very divided City Region.
Collectively together we are responsible for over 30% of the Scottish economy and are a key economic driver of the UK – as mentioned earlier, we are indeed, the second most prosperous city in the UK and also the most productive city in Scotland. Foreign direct investment has been high, particularly in the city and the demand for workers is rising. 
However, we are also a divided region; with significant numbers missing out on the prosperity enjoyed by many.

As well as the strengths already outlined, the Region continues to be held back by issues of deep rooted inequality and needs to overcome significant infrastructure constraints and meet connectivity challenges if it is to fulfil its growth potential.
In the light of these strengths and constraints, it is crucial that the Region makes a step change in economic growth by seeking a City Region Deal with Scottish and UK Governments and establishing an associated Infrastructure Fund, with a complementary skills package.
And City Deals --- are already an important feature of the economic landscape down South, and as many of you will know Glasgow signed a deal around 18-months ago. Whilst each deal has been different they have all been targeted at empowering local areas to drive economic growth by providing them with additional resources and freedoms.
This city region has a unique set of assets. We have world class offerings in relation to our knowledge base, technology activity and cultural offering and we are keen to build on these.
We may have an impressive story to tell at a UK level but the competition is increasing, along with the pace of change.
Together our City Region partnership has a clear vision for the future:
In a fast-changing world we will create a region where investment, intellect and culture will fuse to create new ways of doing things. In the next 20 years the Edinburgh and South East Scotland City Region will become the most connected, most creative, most inclusive and most entrepreneurial place in Europe. We will build a network of businesses, universities, technical and creative skills attracted by a great lifestyle and cultural offer.
Our focus goes beyond infrastructure investment and includes a fresh approach to skills and innovation activity across the region. We are looking at the journey from school to the workplace and we want to ensure a better fit between the skills businesses require and those of our workforce.
At the heart of this proposition is the desire to secure additional substantial funding for Edinburgh, the Scottish Borders, Fife, Midlothian and East and West Lothian councils, in priority areas for investment such as transport, housing, economic regeneration, energy and digital connectivity.
It is crucially important that while doing this we also tackle the pockets of inequality, and other constraints, that threaten to hold the region back.
According to the Scottish Index of Multiple Deprivation 2012, over 12 per cent of the region’s population; is among the 20 per cent most deprived in Scotland.
So whilst the unemployment rate for the area, as a whole, remains around the Scottish average, there are localities with persistent high unemployment that must be tackled.
Skills are another area which needs creative thinking.
In areas such as construction, healthcare and tourism, we need more skilled workers to ensure that, in the decades to come, the wider City Region has a competitive edge to help us meet the challenges of a growing and ageing population.
Any investment would be supported by a complementary package of skills and innovation measures, such as business-led training academies in key growth sectors.
Our next steps will be to seek further dialogue with both the UK and Scottish Government on the development of a detailed proposition, which will ensure that we continue to grow, and at the same time reduce inequalities across one of Europe's most successful City Region economies.
Assuming a positive response from Ministers, detailed work - in partnership with representatives from both Governments - on prioritising potential investments would continue throughout the early months of 2016 … and by the middle of this year, there is every prospect of a multi-billion pound City Region Deal being in place.
So – thirdly Euan --- I thought I’d broaden the discussion out and mention a bit about the view from Scotland’s 7 main Cities …
… some of you will be aware of the Scottish Cities Alliance --- of Scotland’s 7 main cities: Glasgow, Edinburgh, Aberdeen, Dundee, Stirling, Perth and Inverness.
I currently Chair this Alliance – which is a partnership between the 7 cities and the Scottish Government --- whose support and encouragement has been crucial to the formation and development of the early years of the Alliance.
And I’ve already mentioned the challenges that our own City and surrounding Region is facing …
… just to re-emphasise the challenges --- in Edinburgh, the Lothians, Borders 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 nearly 50% 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.
That picture of social inequality – sadly – can be evidenced from across any of the surrounding areas of Scotland’s 7 main cities.
That is why the seven cities are currently making 5 key asks of the Scottish Government in a ‘Discussion Document’ that we recently launched – entitled ”Empowering Scotland’s Cities”. (on SCA website)
That 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 the Holyrood Elections in May 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 is Greater participation in local democracy.
In essence - what we 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 duplications 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, as mentioned,  there is much evidence to demonstrate that more decentralised systems of government are associated with higher national growth. 

Finally Euan - what of the Future City?
Well – I hope I’ve provided some evidence … and at least some serious food for thought … that no matter how economically successful; a city the size of Edinburgh (or Glasgow, or any Scottish City for that matter) needs a wider ‘economy of scale’ to realise not just raw economic success; but also a broader success in equalising access and opportunity for all --- or for as many as feasible.
And neither the public, the private, nor the voluntary sectors can achieve this alone – it needs a partnership of all those interests if we’re truly going to ensure we can cope with the imminent demands of growth in the near, if not immediate, future.
I’ve personally come to the very firm conclusion that in order to deliver such thriving local economies; that can also improve peoples’ lives --- cities and their regions need a bit more control of their own destiny.
And I think that debate is actually beginning to take some hold – here in Edinburgh; at the City Region level; and amongst the wider Scottish Cities Alliance members …
… as the eternal optimist, I continue to hope that the main Scottish Parties – as they approach this crucial 2016 Holyrood Campaign – do think radically about the future of our Cities and Regions.
If we, as a Country, are serious about building strong and smart Cities and Regions, then there really does now need to be some further devolution within Scotland.
How hard can that really be!
Many thanks for listening. 



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