Aberdeen opens the London stock market and its thinking
Comment Martin Flanagan
Aberdeen City Council’s senior echelon had the honour of opening the London stock market at the London Stock Exchange yesterday – recognition of the authority’s groundbreaking use of the bond markets, at least north of the Border, to fund a major infrastructure programme.
Who is to say other councils won’t follow the example? Council leader Jenny Laing said there has been great interest from other local authorities in Scotland since Aberdeen City Council completed the £370 million bond issue in November to support a £1 billion infrastructure programme in the coming years.
In truth, Aberdeen does not actually hide its feeling that it had to run with the ball as it does not get the financial support from the Scottish Government that it believes the likes of Edinburgh and Glasgow take as a given.
Out of sight, out of mind might sum up that view – with the council also feeling that it sometimes loses out because for decades it was seen as not needing as much help as other parts of the country when it was riding the North Sea oil and gas boom.
Well, the energy industry has seen much more troubled times in the past couple of years, and Aberdeen clearly is also pitching for inward investment attached to the bond issue, which was also smoothed last autumn by an enviable AA2 credit rating from Moody’s credit rating agency.
Talking to leading municipal players like Laing and the council’s convenor of finance, Willie Young, it is clear they see this only as the start.
Energy isn’t a busted flush – the oil price is beginning to recover – but the council wants to diversify to make the city economically stronger, with projected innovation hubs in food and drink, agriculture, bio-technology and digital connectivity (the latter increasingly vital for a more remote Scottish northern city). Exporting energy expertise is also high on the agenda.
Aberdeen has had its well-chronicled financial problems in the past, particularly around the time of the financial crash when there were huge cuts to public services.
It is even more to the credit of the current administration that they have been brave enough to try new funding based on lateral thinking given that challenging history.