A Deal to ease growing pains

What are our growth prospects as a region? If respected thinktank the EY Scottish ITEM Club is to be believed, the answer to that question is anaemic at best.

Unsurprisingly, the group’s latest Scottish economic report painted a downbeat picture for the country as a whole.

The uncertainty of a prolonged Brexit, the shock of a Trump presidency, the weakness of the pound, the lower-for-longer oil price, a drawback on investment and falling consumer confidence have conspired to make tough times all the more challenging.

The ITEM club’s response was to significantly downgrade its own forecast for 2016 Scottish output growth from 1.2% in June to just 0.7%.

It is also predicting the economy will effectively stagnate next year, with measly GDP growth of just 0.4%, significantly below the (also rather miserly) 0.8% for the UK as a whole.

That’s the macro picture – but what about the micro?

Well, helpfully, the ITEM Club also looks a little deeper under the skin of the Scottish economy.

Its analysis of our seven cities – centres that account for almost half of total employment – is eye-opening stuff.

Both the capital and Scotland’s largest city are effectively set to tread water and there’s little reason for cheer in the regions either.

The ITEM Club data shows Perth and Kinross may have delivered a relatively strong jobs performance this year – a projected rise of 1.2% is above both the Scottish and UK average – but the medium-term outlook is significantly less rosy with public sector cuts and predicted manufacturing and financial sector cuts set to bite.

The Dundee data is even more gloomy – jobs down marginally this year and the prospect of up to 1,500 net job losses over the coming three years.

Grim stuff – and one of many reasons why the name David Littlejohn will become increasingly important to this region’s fortunes in the months ahead.

Mr Littlejohn is the former head of planning and regeneration with Perth and Kinross Council who has been handed the rather daunting task of delivering a City Deal for the Tay Cities alliance.

A successful bid will see hundreds of millions of taxpayers’ and private sector cash pour into this region to improve infrastructure, upskill the workforce, drive innovation and put this corner of Scotland on the international tourism and cultural map.

I have heard one senior official describe the City Deal and the inward investment it will leverage as being worth “10 times” that of the V&A Dundee design museum.

The figure he was quoting was in the thousands of millions of pounds – the kind of cash that could transform the economic landscape and provide a platform for growth that generations to come will feel the benefit of.

That’s why I hope Mr Littlejohn and others in positions of power and influence in this area have read and digested the ITEM Club report.

The City Deal, coupled with the V&A and the investment it is bringing to Dundee, is our chance to break the plodding economic cycle the ITEM Club describes and put Tayside and Fife on to a new and significantly more prosperous track.

The Deal bid will be submitted to the Government early next year.

I hope it delivers.

The City Deal is our chance to break the plodding economic cycle the ITEM Club describes and put Tayside and Fife on a new significantly more prosperous track.

The emerging V&A is the focus of regeneration in Dundee, but securing a Tay Cities deal would deliver a significantly greater economic boost for the region as a whole.