Two of Scotland’s chambers of commerce have urged Andy Burnham to introduce English-style devolution in what could spark a backlash from the Scottish government.
Glasgow and Edinburgh chambers have written to the Prime Minister warning that the UK Government’s devolution ambitions cannot stop at the border, and have backed calls from Scotland’s two largest city regions for a second stage devolution settlement.
While claiming the move would complement the SNP government’s own plans, there is likely to be some concern in the party hierarchy at any attempt to over-ride Holyrood’s authority.
Stuart Patrick, chief executive of Glasgow Chamber, and his Edinbugh counterpart Liz McAreavey say that the two city regions face a widening gap in funding certainty and decision-making flexibility compared with city regions in England.
Glasgow and Edinburgh together generate around £100 billion in economic output and are home to 3.5 million people. The Chambers are calling for direct engagement between the UK Government, the Scottish Government and Scotland’s city regions to agree what a meaningful devolution settlement could look like in practice.
The letter sets out three asks of the UK Government:
- Commit to direct engagement with Scotland’s city regions on funding and devolution, alongside the Scottish Government’s own devolution plans and not instead of them.
- Extend to Glasgow and Edinburgh the funding mechanisms now offered to English combined authorities, starting with pre-selection for multi-annual funding in the next round of the Local Innovation Partnership Fund, on the terms English combined authorities now receive.
- Meet Chamber and city region leaders, ideally at No 10 North, to discuss what a meaningful settlement could look like in practice.
Mr Patrick said: “Centre for Cities puts Glasgow City Region’s underperformance at around £7 billion a year. That is more than £19 million of output lost every day, about £3,700 for every resident. It is the largest economic gap in Scotland, and closing it would make Scotland’s economy around 4.6 per cent larger.
“This is not a failure of ambition or of delivery. Glasgow City Region manages a growth portfolio worth more than £2 billion, larger than most English city regions.
“The Scottish Government has committed to legislation giving regional partnerships legal status and powers over skills, economic development and planning, and we want that legislation to succeed. What only the UK Government can provide is the long-term funding certainty that sits alongside it.”
Ms McAreavey added: “Edinburgh and South East Scotland has the ambition, partnerships and proven capability to take on greater responsibility. Its strong record of delivery through the City Region Deal provides a firm foundation, but growing pressures on housing, transport and skills demand a more coordinated, long-term response.
“Because income tax is partly devolved, growth in the Central Belt raises revenue for both the Scottish and the UK budgets. This is one of the few areas where both governments gain from the same decision, which is why it should be taken together.
“Business is not asking government to carry this alone. Both Chambers are bringing business and investor interests together around investable projects, so that what our regions put to government is a value proposition and not a list of demands.”
The chambers call is backed by the independent report on regional economic development in Scotland, led by Professor Sir Anton Muscatelli.
The report found strong and consistent business support for greater devolved powers and long-term funding certainty for Scotland’s city regions, warning that fragmented, short-term funding settlements were holding back investment and growth compared to our competitor regions in England.
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